LED lighting electricity supplier can not escape the law of 28

LED lighting has entered millions of households with its many advantages such as safety, energy saving, and environmental protection, and has become a mainstream lighting fixture. With more and more products being recognized, the market is getting bigger and bigger, and the transparency of market conditions is getting higher and higher, and many poor companies will eventually be eliminated. Just as the Italian economist, Baredo, once put forward such a view, in any group of things, the most important one is only a small part of it. About 80% of society’s wealth is concentrated in 20% of people, and 80% of people only have 20% of social wealth. This is the 28 rule. LED lighting electricity supplier field, 28 law seems to be in effect forever.

LED lighting e-commerce is in an embarrassing position of “say good or bad”, 80% of the enterprises are in losses, 10% of enterprises keep costs low, and companies that make money do not exceed 10%. Yi Ning Liang Lighting Chairman Liu Yuangui pointed it out in his microblog.

E-commerce into the stable period LED companies earn less compensation?

According to the latest e-commerce data, the market size of online shopping lighting products in 2014 reached approximately 14.683 billion yuan, accounting for 14.4% of all sales channels.

For LED emerging SMEs, e-commerce channel input costs are relatively small, as a preliminary promotion seems to be a good choice, but not all companies are suitable for e-commerce platform. Some industry sources said that the emergence of e-commerce should be a supplement, but not as the only weight in the future development.

Tan Jian, chairman of Lai Wei Optoelectronics, which started operating e-commerce in 2013, frankly stated that companies have experienced losses and capital preservation to achieve their current profitability. "Now the e-commerce companies that make money are only about a few percent, because the companies that survive must be able to speak with their strengths, and opportunistic, reliance on single-bill sales will be eliminated sooner or later."

This coincides with Wei Zhi Electronic CEO Zhang Yang's point of view, "do LED lighting electricity supplier profit or loss depends on the input of the company, there is no short cut, you need to use product competitiveness to speak." According to Yang, micro Zhi Electronic started to sell Internet LED lighting products from the end of 2014, and sales have reached millions.

“The e-commerce business has gradually entered a relatively stable phase from a period of high-speed growth in the past two years. It is considered only as an enterprise's 'occupy position'. The period of swarming has passed and unprofessional companies will become less and less. According to Li Quan, general manager of Hanyuan Lighting, loss-making companies that make lighting electricity providers will increasingly occupy the majority, and 20% of strong brands will occupy 80% of the market share. This is the general trend.

Which companies can become such a rare 20%? According to Li Quan, one category is a company with relatively strong capabilities, including those with significant advantages in the brand area, and the other is a “small and beautiful” enterprise. The “middle” companies with unclear market positioning are more difficult to survive.

Tmall new measures announced that LED companies complained about?

Although some lighting companies are desperately fighting in the e-commerce space, the e-commerce giant Tmall, which has repeatedly broken the "double 11" sales record, still attracts LED lighting companies.

“The loss of a part of the company's previous period may be to expand its popularity and brush sales. Conversely, there are still some companies that have invested a lot of energy in advertising, earning larger traffic, resulting in reduced traffic for other companies. "Zhang Yang said.

In order to obtain traffic, most companies adopt the method of puerile, and according to investigations, there are no less than 1,000 LED bulbs priced as low as 1.8 yuan. Li Quan believes that, by contrast, more mature companies will consider whether this piece of input and output can meet the company's long-term expectations.

Regardless of the sales model or the consideration of perfect channels, e-commerce is undoubtedly an important entry point for LED lighting brands. On March 2nd, the publication of the “Adjustment Notice for Tmall Investment Promotion Standards” means that e-commerce resources are more concentrated in the hands of a few enterprises.

The "Announcement" shows that Tmall will actively recruit 55 LED lighting brands providing quality goods and services to upgrade the consumer experience. Starting from March 9, brands that are not on the public list will not be able to register for Tmall.

The new round of survival of the fittest has left more LED lighting companies at a disadvantage, and Tan Jian believes that “because Tmall’s entry into businesses is a scarce resource now, if a loss-making company is on Tmall, the store will be 'valuable'.” The publication of the "Notice" issued a "order-by-passenger order" for most lighting companies. "In fact, it is normal for companies to be kicked out. The survival of the fittest is the best."

In addition, e-commerce taxation measures have also led many LED lighting companies to scare out a cold sweat. If profits are less than 10%, more companies will lose money after taxation. Many businesses said, "Can you apply for bankruptcy, or you can simply run away." Although it is a joke, but also expressed the helplessness of living in LED lighting electricity providers. According to CEOs of a certain company, "If the electricity supplier taxes, then the LED electricity supplier is even more difficult to do."

Although the e-commerce platform has gradually matured and is capable of doing what it takes, not putting the eggs in a basket is the best way out for LED lighting companies.