LED lighting products ushered in price cuts, industry competition turned to "after sales"

With the gradual implementation of government support measures and the increasing support, the LED lighting industry is entering the game stage of price and quality from the “savage growth” stage. Experts pointed out that the price of LED products is declining at a rate of about 20% per year, and the focus of future industry competition will shift to product quality and service.

Policy leverage spurs industrial expansion
The “Financial Subsidy Promotion Project for Semiconductor Lighting Products” implemented by the United Nations Development and Reform Commission and the Ministry of Science and Technology of the Ministry of Finance completed the open tender last week. This is the second round of subsidy project tenders issued in China after last year.

In addition to the central government, local governments have spared no effort in supporting the LED industry. Taking Binhai New Area as an example, the “Measures for Promoting the Development of New Energy Industry in Binhai New Area” issued in 2011 proposed to support the key equipment and materials and common technology research and development projects of semiconductor lighting (LED); support the implementation of LED campus and LED in the district. Green lighting demonstration projects such as community, LED industrial park, LED traffic, etc., in principle, each project will be given a discount or fund subsidy of up to 500,000 yuan.

Huang Jinde, senior vice president of Tianjin Jinya Electronics Co., Ltd. told reporters that with the support of the government subsidy policy, our main customers are mainly corporate procurement. “Our current partners include dozens of companies such as Motorola, Novo Nordisk and some commercial buildings, and energy-saving products are found in many places in the new district.”

"LED manufacturing and purchasing companies, the policy has given subsidies, which will play an important role in reducing product prices. A 24-hour uninterrupted lighting industrial workshop, as long as 3 years, the energy cost savings can cover the purchase of LED lighting Cost.” Yu Ning, director and senior engineer of Tianjin Electric Energy Technology Center, said.

According to Gaogong LED forecast, thanks to the government's support, the LED lighting products market will continue to grow rapidly this year. Taking LED street lamp products as an example, the output value of LED street lamps in China will increase by more than 60% year-on-year, and the output value will reach 4.7 billion yuan.

Quality and service to enhance competitiveness
"The ever-expanding market size of LED products is causing the price of LED products to drop by 20% per year." Yu Ning told reporters that a LED tube of more than 400 yuan three years ago, the price has now hit more than 50%.

According to relevant statistics, due to the improvement of upstream chip technology and rapid price decline, the cost performance of downstream LED lighting products is rapidly increasing, and the LED industry is moving forward in a reasonable and stable direction. Last year, the output of LED indoor lighting products in China increased by 75% year-on-year, and the product price dropped by 22% year-on-year; the output value reached 18.6 billion yuan, a year-on-year increase of 38%.

The forecast from Gaogong LED shows that thanks to government support and price decline, the output value of LED indoor lighting in China will reach 30.6 billion yuan this year, up 64% year-on-year; in 2015, it will reach 99.3 billion yuan, and the scale of indoor lighting output will be compounded in the next 4 years. The growth rate is over 50%, reaching 52%.

As prices continue to fall, the competition in the LED industry is becoming increasingly fierce. In the face of products of the same price, companies began to look for more energy-efficient and durable lighting products. “There have been fewer and fewer low-priced LED product brands in the lighting market.” An industry insider told reporters that a few years ago, small and medium-sized enterprises selling LED lighting products were more and more unable to stand up. “Small and medium-sized enterprises do not have the packaging capability, their products are '攒', the quality can not be guaranteed, not to mention the after-sales service.”

“After several years of training, the domestic market for energy-saving products is becoming more rational. As the price of products declines, the focus of customers will shift to quality and service. Now more and more customers are aware that they are buying Products and services." Industry insiders told reporters.

Nowadays, LED lighting companies in the new district are also catering to the industry trend, and they are making greater efforts in product quality improvement and service areas. "In addition to the traditional after-sales service, we can also provide customers with more targeted overall solutions. For some expensive LED products, we can also provide product rental services." Huang Yude told reporters.

Zhang Yulin, research director of China Investment Consulting, pointed out that LED companies should improve their service quality and further subdivide technology and services in a quality and price-balanced environment to be more suitable for industrial development and more competitive.

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