China's drive power market has developed rapidly in recent years, and competition in the industry has intensified. Among them, the small-power driving power supply for LED lighting used in indoor functional lighting has relatively low technical threshold and more entrants, and the market competition is particularly fierce.
Due to the complex and ever-changing economic environment at home and abroad, LED power companies have issued notices in the past two years. Due to overcapacity and industry triangle debts, it is difficult to turn over funds. It is decided to clean up and convene suppliers to declare and liquidate claims.
According to analysts from the Institute of Advanced Industrial Research LED Research (GGII), “in the face of fierce price competition, power supply manufacturers are constantly adjusting prices, product prices have bottomed out, and even more difficult is that some raw materials and labor costs are still rising. Therefore, there will be a large number of small-scale power supply manufacturers going out of business in the next year or two."
The market tends to be centralized, and the SMEs are living "uncomfortable"
Since the second half of 2016, the LED indoor functional lighting industry has developed rapidly, and the output value of LED drive power has also grown rapidly. According to the High-tech Research Institute LED Research Institute (GGII), the output value of China's indoor functional lighting power supply in 2016 was 13.1 billion yuan, a year-on-year increase of 13.2%, and the growth rate was 6.9 percentage points higher than that in 2015.
From the data point of view, China's LED indoor lighting drive power market is showing rapid growth. GGII expects that in 2017, the output value of China's LED indoor functional lighting drive power will exceed 16.1 billion yuan, a year-on-year growth rate of 23.4%. In 2020, the output value of China's LED indoor functional lighting drive power will reach 24.6 billion yuan. From 2017 to 2020, China's LED indoor functional lighting drive power production scale annual compound growth rate of 15.2%.
Although 2017 will still be a hard year, the huge market space is a year of enthusiasm for companies with a certain scale and good customer quality. With the decrease of competitors, the increase in market concentration makes These companies are full of confidence in the future market.
Lefford project manager Li Shaoke said, "In the first half of this year, the industry as a whole is better than in previous years. The performance of large LED power supply manufacturers has continued to grow, but for small and medium-sized power companies, it will still be alive and uncomfortable."
Gaogong LED consulted the financial report and found that in the first half of this year, many new three-board LED drive power companies achieved double profit. For example, Kegu Power (836751) net profit increased by 58.14% in the first half of the year, Guanming Intelligent (871128) net profit increased by 45.41% in the first half of the year, and Chuanglian Power (838918) net profit in the first half of the year increased by 141.37%.
“Kogu Power achieved double profit growth in the first half of the year, mainly because the company increased production automation equipment, reduced personnel costs, and concentrated procurement in the supply chain, effectively reducing procurement costs. In addition, the company’s overall order volume growth this year digested some operating costs. Li Cheng, director of Kegu Power Marketing, told Gaogong LED.
In addition, power companies such as Igor, Leifford, Ochs, and Zhang Fei Power have also achieved different growth rates. It is reported that Leifford has adjusted its revenue in the first half of the year by about 60% in terms of R&D, business, management and production.
According to the survey, GGII analysts concluded that “the future LED power industry must be concentrated in the direction of development, that is, the bigger the big factory, the smaller the small factory, even being annexed or closed down.â€
Li Shaoke also believes that “as the industry shuffles, the market is becoming more and more centralized. Next, small and medium-sized power companies want to break through only two ways, either to invest in research and develop differentiated routes, or to face transformation or elimination. ."
Return to quality and increase gross profit margin
Earlier, the overall low price of small and medium power power supply made the gross profit margin of the product exceed the reasonable range. In addition, more and more enterprises are coming in, but in fact, everyone does not make money. As the material cost increase is greater than the refined profit margin of the finished product, the gross profit margin of the small and medium power supply is further declining.
In 2017, although the LED industry as a whole has gradually warmed up, small and medium power drive power companies have had the opportunity to breathe, but the problem of price competition and low gross profit margin in the small and medium power supply industry has not been effectively improved. In this context, where is the way out for small and medium power LED power companies to increase gross margin?
“The current power supply market price continues to decline, and labor costs are rising. In the future, we will vigorously explore overseas markets and high-end control product lines. At the same time, we will increase production capacity by 50% in the second half of this year, improve automation and reduce manufacturing and management costs. To increase the gross profit margin." Li Chengyu said.
Due to fierce market competition, the technology renewal cycle has also become one of the main factors affecting gross profit margin. Li Shaoke said frankly, “In this context, companies need to optimize their gross margins to optimize their costs based on quality assurance. This requires us to continue to innovate products and improve product functions in line with market demand.â€
Indeed, technological innovation, the application of new technologies and the development of new products are key factors in a company's core competitiveness. If companies fail to maintain continuous innovation capabilities, or fail to accurately grasp the development trends of products, technologies and industries, they will weaken enterprises. Existing competitive advantages, which affect the competitiveness and sustainable development of enterprises.
Raw material price increase, low power supply price reduction is basically 0
As we all know, the high-end LED power supply has the characteristics of high power, harsh operating environment and high price, especially the problem that the high-end power supply is expensive. For example, in the street lamp market, the overall street lamp market is becoming more and more fierce at this stage, and the price drop of products is increasing. However, the proportion of power supply cost in the whole lamp cost has been high, which leads to the gradual compression of profit margin.
Many industry insiders predict that the price of high-power outdoor power supply will continue to decrease in the next few years until it is adjusted to the next stable point. And the small and medium-sized power supply with relatively small profit margin still has room for price reduction in terms of price?
According to Li Chengwei, "Indoor power supply prices have dropped by about 8% in the first half of the year, but from the current trend of raw material prices, there is basically no room for downward adjustment of indoor power prices in the second half of the year. Mainly because conventional power supply schemes are basically mature, upstream supplier prices. Still raising factors such as plastics, PCBs, transformers, packaging materials, etc."
After several years of tempering, the current LED lighting industry has gradually bid farewell to the market competition of a price war in the past, and enterprises have returned to focus on the construction of fundamentals such as product quality and service, and better cultivate the market to increase gross profit margin. The same is true for LED low power supplies.
In the view of Yang Dong, general manager of Zhangfei Power, “the market competition is now the competition of quality and brand. For the enterprise, if there is no profit, then the materials will definitely be considered again and again, and dare not use high-quality materials. Products must not improve, let alone increase added value and improve cost performance."
It is believed that with the increasing pursuit of product safety and convenience by power users, a product can be accepted as long as it is safe, has a long life, and has a low defect rate.
MiFi stands for Mobile WiFi and it works in the same way as a WiFi router, with the difference that you can set up a wireless personal area network and get online where ever you are on the globe. 4G-LTE routers belong to the fourth generation routers that use the "long-Term Evolution Technology" (LTE). This LTE technology is the successor of 3G technologies such as UMTS, HSDPA and HSUPA. The latest generation 4 g LTE MiFi routers are very fashional and stylish.
4G WIFI Router, TDD Router, LTE Router, 4G HOTSPOT, WIFI Device, powerbank router
Shenhzhen Tongheng Weichuang Technology Co., Ltd , https://www.thwclte.com