LED companies hold deeper multi-level cooperation in procurement, production, channels and regulation

The LED shuffling industry has begun. A common saying is that the result of shuffling is to eat small. But even the larger LED companies listed on the market are also plagued by the worrying situation in the whole industry. As a result, some large companies have also begun to try to hold groups, through procurement, orders, channels, and standardized multi-level cooperation.

On the day before the high-tech LED exhibition held in Guangzhou from August 17th to 19th, 20 G20-LED summits were held by 20 LED companies including 9 listed and 6 LED companies. In the morning of the non-publicity of the morning, 20 companies discussed the cooperation between enterprises.

The current status of LEDs has been confessed by some insiders as “chaos”, including imperfect industry standards, uneven product quality, and significant price/performance ratios. End consumers are not intuitive and accurate about domestic LED product standards, specifications or certifications. understanding.

Faced with this, the main idea of ​​local governments is to establish standard alliances. For example, Guangdong Nanhai District just set up an LED standard alliance in the region just five days ago to fight for “discourse power” in the form of corporate groups in the region. Earlier, the Guangdong Provincial Science and Technology Department also had similar initiatives.

The 20 LED companies of the above G20-LED also released their own lighting product specification plan last month to develop high-quality LED lighting product grade indicators. “The G20-LED product specification is not a standard, but a product grade indicator that meets market needs and is easy for consumers to visually recognize.” Zhang Xiaofei, secretary general of the G20-LED Organizing Committee.

This time, the tighter group plan involves specific operational plans for upstream and downstream cooperation in procurement, production, and channels.

In the procurement cooperation, 20 companies tried to build a LED supply chain procurement trading platform. Since raw material costs account for 20% to 30% of production costs, and some are as high as half, it is extremely important to control procurement costs and keep them down. Twenty companies believe that due to the concentration of orders, companies can make advance reserves of raw materials based on historical procurement data forecasts and further reduce the uncertainty of demand.

“In the future, through centralized procurement transactions, it can also reduce the upstream procurement cost of suppliers, help suppliers to stabilize production, reduce production costs, and improve product quality. At the same time, through centralized demand feedback, it can also help suppliers to develop new products quickly. In the meantime, the stability of the supply chain will be strengthened and the overall procurement cost will be effectively reduced."

In terms of channels, Zhang Xiaofei said that after many years of efforts, NVC traditional lighting companies still control the channels of the lighting industry. In the emerging LED industry, individual companies are unable to build their own channels. Now with the changes in NVC lighting executives and the investigation of Foshan Lighting, LED lighting companies have found that "traditional lighting is not so terrible."

With the traditional lighting distribution channel is another way for LED lighting companies to establish channels, but because the traditional lighting companies themselves are increasing their efforts to shift to the LED direction, the conflict of interests between the two sides is difficult to work.

Zhang Xiaofei said that the construction of LED channels includes the differentiation of the original channels of traditional lighting, or the establishment of updated channels in parallel, including the network channels that are rarely involved in traditional channels. From the current point of view, LED companies cooperate to establish their own channels, and it is not unrealistic to differentiate some channels from NVC.

Zhang Xiaofei said, "We will not seduce them (NVC dealers), but we are attractive enough to attract some of NVC's dealers."

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