Analysis of Current Status of Domestic LED Lighting Channels

Analysis of Current Status of Domestic LED Lighting Channels With the gradual launch of semiconductor lighting roads, tunnels, commercial, industrial, office and other various markets, LED lighting companies "channel layout" has also entered a critical period, the exploration and choice of corporate channel model will greatly affect its future The success or failure in market competition.

I. Development Status of Domestic LED Lighting Enterprises in 2012
According to the National Semiconductor Lighting Research and Development and Industry Alliance survey data, the LED lighting company’s product outlets are mainly engineering channels and OEM exports in 2011. These two channel sales account for about 70% of the total sales of LED companies in China, and they are for distribution agencies. Channels and the layout of the terminal market, LED lighting business's exploration has just begun.

Since 2012, with the sharp drop in the prices of products in various links of the industry chain, various segments of LED lighting have started up significantly and the sales scale has expanded rapidly. The channel construction of LED lighting companies has also achieved relatively rapid development. Whether it is invisible channels or explicit channels, the speed of enterprise layout has been noticeably accelerated. In particular, the layout of product distribution and distribution channels has begun.

During the various exhibitions during 2012, many LED companies played slogans such as “Recruitment Agents at Home and Overseas” and other well-known LED companies such as Qinshang Optoelectronics, Shanxi Guangyu, Foshan Lighting and Lediy Lighting. The work attaches great importance to, and continuously innovates the ways in which channels attract investment, and it also creates highly tempting policies. For example, Laitiya Lighting has provided a complete franchise policy in terms of opening decoration subsidies, product subsidies, purchase rebate, advertising support, product training, and after-sales service. Foshan Lighting also proposed domestic sales to implement large-area management, set up sales centers in the region, and introduced dealership policies such as market protection, market development, promotion support, rebate incentive plan, sales and product training to dealers. Kyung Sang Optoelectronics also proposed the concept of “nanny service” and actively promoted the transformation of sales model from “factory direct sales model” to “channel model”. Through contracts, construction was based on “profit sharing”, with agents, straight The complex marketing network dominated by business and engineering companies changes the pattern of manufacturers' singles. In addition, some LED companies with strong capital strength in order to quickly obtain channel access, hesitate to invest heavily in shares and acquire the advantages of traditional lighting channel companies also occurred frequently, such as BDO Runda huge amounts of money to acquire NVC shares event.

However, the construction of LED lighting channel system is also not a day. Due to the unique characteristics of LED lighting products and their market environment, the layout of LED channels is facing many new challenges compared to the development of traditional lighting channels. Such as LED lighting price market acceptance is not yet high, the market demand and the stage of the start of the market, LED lighting product quality is not easy to identify, lack of channel business confidence caused by lack of manufacturers and distributors imbalance, etc., a complex market environment must be The degree has hindered the LED lighting company product distribution channel construction process. 1234

Second, analysis of sales channels of major products

At present, China's LED lighting companies in the domestic product sales channel model can be summarized into four categories: the first type is based on engineering and decoration companies, advertising companies, designers represented by the invisible channel model; the second type is accompanied by rapid global e-commerce The online and offline combined online channel model developed and developed; the third type is the traditional multi-level distribution agency model represented by dealers, agents, supermarkets, and building materials home lighting professional markets; the fourth type is self-built by enterprises. Stores and experience stores represented the direct supply channel model.

The first channel model is the engineering channel. The rapid development of this channel is mainly determined by the unique characteristics of China's LED market development. As the LED as an illumination source, its price is relatively higher than that of a traditional light source. Currently, it is difficult to enter the mass market only relying on the advantages of light efficiency and lifespan. However, under the vigorous promotion of the government, it is possible to promote the sales of products by undertaking projects of some government demonstration and promotion projects. The majority of customers are mainly government and related units, and companies often play "integrated service providers for production and pre-sale services." The role needs to coordinate many relationships between the government, project sponsors, and designers, and follow up the whole process. This model usually has a relatively large order amount and high profits. The disadvantage is that the project is decentralized, the public relations cost is high, and the fund recovery period is long. Facilitate the expansion of production.

The second channel model is the network channel model. With the rapid development of such businesses as e-commerce B2B and B2C, LED lighting companies can directly display and promote LED lighting products through portal networks and third-party e-commerce platforms, and then sell LED lighting products through offline transactions. Due to the low input cost in the early stage, this model has become an important sales model adopted by many domestic enterprises and is directly facing the end-users. It is favored by many small and medium-sized enterprises, but the coverage of this model is relatively narrow, and the products are shipped. The aspect is more decentralized and uncertain, and after-sales service is also difficult to follow up. It is difficult to meet the needs of the company's large-scale and integrated development and can only become one of the auxiliary channels for the company.

The third channel is to use the traditional sales model distribution, agency, joining and other partners to achieve the sales model for end customers. The advantage of this model is that it can quickly deploy, realize the rapid expansion of product marketing network, quickly occupy the consumer field, and at the same time can save the company's marketing costs, but the disadvantage is that the dealer's profitability and loyalty can not be controlled. This model is the most important channel model for the sale of lighting products determined by China's vast region and decentralized demand market, and it is also the focus of LED lighting companies' current active exploration and layout, but due to LED lighting product prices, types, quality, and market For reasons such as acceptance, the design and construction of this channel model still poses great challenges.

The fourth type of channel is the establishment of specialty stores and experience stores through self-investment in the terminal market area. The advantages and disadvantages of this model are very obvious. The advantage is that it is beneficial to the brand building of the company, it has high controllability and good planning, and it can reduce the channel circulation cost of products and participate in market competition through more competitive prices. The profit rate can be better protected; the disadvantage is that the initial investment is too large, and the market demand has not yet been launched on a large scale. It also puts forward higher requirements for the company's capital requirements and the overall management of a large range of direct-operated stores.

III. Analysis of market environment for enterprise channel construction

The design of enterprise channel system must not only conform to its own development and product positioning, but also match the industry and market development environment. The current channel construction of LED lighting companies is facing a more complex market environment, mainly in the following areas:

1. Higher prices led to the market acceptance of LED lighting products is still not high overall. As the country attaches great importance to energy conservation and environmental protection and publicity, although many consumers now have a relatively rapid increase in awareness of LED lighting products, but many consumers Even designers and distributors do not really understand LED lighting products and their added value, which directly leads to many dealers lacking confidence and can't devote all their efforts. At the same time, the price of LED lighting products is still too high and is a bottleneck problem in the construction of LED channels. Constrained by high prices, many consumers have “looked away” from LED lamps, which also has an important influence on the confidence of dealers in operating LED lighting products. LED lighting products have to be accepted by the market at a large scale, and the price of the products has to be further brought closer to the traditional products, and reflect more added value.

2. The supervision of product quality and the identification of quality are still lacking a simple and effective way. The quality of LED lighting products on the market is currently uneven. Due to the fierce market competition and the drop in prices, many irregular behaviors have also appeared in the market. Some irresponsible enterprises have attracted consumers through energy-saving and environmental protection concepts and low-priced low-quality products. The use of consumers does not possess professional knowledge. However, the lack of good quality identification methods has caused many LED lighting products that are stumbling and cutting materials to flood the market, affecting consumers' correct understanding of LED lighting products and creating negative public praise. There is an urgent need for standard specifications and quality certification mechanisms for LED lighting products.

3. LED lighting product categories are not yet abundant LED lighting is emerging as a lighting technology, the development of the time is still relatively short, and is still in the stage of replacement lamps, in many areas can not completely replace the optical characteristics of traditional light sources, and Innovative products are still lacking, and the lack of product types makes it difficult to support large-scale professional stores. Consumers do not have too many choices at the time of purchase, which reduces the actual profitability of shoppers, which also restricts the LED sales channel. Development can only play a supporting role in traditional LED lighting stores.

4. The channel model needs innovation, LED channel service system is not yet mature LED lighting is a new energy-saving and environmentally friendly lighting technology, can not simply face the competition of traditional lighting products with the price, the value of the need to reflect the innovative marketing tools and models . Because of its "newness", there is no model that can be imitated and learned. Exploration requires a process. In addition, the marketing service system for new LED lighting products has not yet matured. The LED industry has few professional talents. No matter whether it is a professional channel provider, sales personnel or maintenance personnel are very lacking, the immature operating environment also reduces the confidence of dealers in large-scale entry into the LED lighting product field.

Fourth, future development proposals

For LED lighting, the diversification of the consumer market and the staged nature of the market also make the diversification of channels a necessity. The design of the channel model requires accurate positioning. Different stages of operation, different product types, and different companies require different channel structure systems. Although there are still many difficulties in the construction of LED lighting channels and the market environment is not mature enough, channel construction is the only way for LED lighting companies to develop. The formation and smooth operation of a reasonable channel value chain system also requires a good operating model design, market demand driven and financial support. At present, most of the channel modes of LED lighting products for enterprises are based on traditional lighting channel models. This will give manufacturers and channel dealers who dare to innovate and explore opportunities to break the traditional pattern, stand out from the crowd or even exceed development.

From the development trend of LED lighting technology, the development of LED lighting products will experience two major stages:

The first stage is the primary stage of development of LED lighting, which is the alternative acceptance stage of current LED lighting development. LED lighting products mainly reflect its high luminous efficiency, energy saving and long life. Because of the high selling price, the market at this stage is mainly for markets such as long-term public lighting, commercial lighting and office lighting. Under the same conditions as traditional light sources, the LED lighting has the characteristics of energy saving, long life, good quality, low overall cost, etc. It is the basis for the market to accept its relatively high price, especially in commercial applications. It is quality and price advantage. Due to the competition with the platform, the channel development at this stage will be based on the imitation of the traditional lighting channel model, and manufacturers should pay more attention to the high quality and high stability characteristics of the product in the marketing process.

The second stage is the advanced stage of development of LED lighting products, and it is also LED personalized and innovative product stage. The market has a certain degree of recognition and acceptance of LED lighting products. The environmental characteristics, small size, and high reliability of LED lamps have been highlighted. A series of products developed entirely different from traditional light source applications will bring new markets. The light source is no longer merely used for lighting. Its change and humanity make it more suitable for people's working life needs. The LED lighting industry will also go from designing products to designing and providing overall solutions. Moreover, with the development of new technologies such as the Internet of Things, LED will also exert its humanized characteristics of high controllability and communication interaction. From outdoor to indoor, office buildings to home, from auxiliary lighting to main lighting, LED lighting fixture systems with intelligent control and interactive features will bring more humane services to humans. At this stage, all manufacturers fight to design and apply advantages. The channel development at this stage will be based on experiential marketing channels and system-level engineering service providers.

The government's engineering channels and export-oriented OEM channels play a major role in the current channel system. However, with the development of the market, the channel system will also undergo a process of transformation and integration. The development of the LED market will increase in the past two years. During the growth stage, the distribution agency channel has a significant role in the rapid acquisition of emerging markets and is expected to achieve rapid development. It is estimated that by 2015, the current channel structure will be greatly adjusted. With the start of the scale of the domestic market and the development of lighting products to the advanced stage, the network channels, direct supply channels and system service providers channels will play a more important role. Character.

For the construction of LED lighting channels, we need a forward-looking layout. From the perspective of the characteristics and phased development of LED lighting products, the following suggestions are given:

1. Grasp the periodic development of LED lighting, pay attention to the channel length adjustable design industry development and increased competition complement each other. At present, the differentiation of LED lighting market and the intensification of competition have led to the development of marketing channels in a diversified direction, which will certainly affect the future pattern of LED lighting industry. LED lighting companies must adhere to subdivision and specialization. According to the company’s own product characteristics and development orientation, it is necessary to find a balance point between the engineering channels, network channels, distribution agencies, and direct marketing channels to clarify the responsibilities of various channels. The purpose is to explore a reasonable channel structure and channel length. In the selection of distribution and agency channels, and the choice of cooperation methods, the adjustment of the length and width of future channels should be taken into consideration in a forward-looking manner, and in accordance with the changes in the market, their channel models and structures should be adjusted in a timely manner. As companies continue to grow and develop, capital strength continues to increase, and the flat management of channels is gradually realized. In a class of markets, full use of direct-operated regions, tied distributors, direct terminal chaining, etc., can be fully considered.

2. Profound understanding of lighting technology and building a marketing model suitable for LED lighting products Most of the companies engaged in the production of LED lighting products are electronic products and semiconductor production transformation companies. Many companies sell semiconductor lighting products as semiconductors and electronic products. Emphasis on its energy-saving and life-span characteristics, but ignored the most important feature of lighting products is to meet the user's needs for optics, aesthetics, and health. Whether it is the designer or the final consumer, in addition to the price, the most concerned is the lighting effect, so in the process of penetration of the traditional lighting channels, in addition to highlighting the characteristics of LED energy saving and life expectancy, it should further enhance the lighting effects and LED The importance of the lighting product's own characteristics, to seize the real advantage of the market.

3. Strengthen in-depth cooperation with channel partners and strengthen their technical support.

LED lighting products are a new type of product with many new technologies and features. The requirements for technical personnel are very high. This is not the same as many traditional products. Because of this, regional agencies are often unable to independently handle installation, commissioning, and maintenance issues. This is especially true when LED lighting is being intelligently controlled. Lighting companies should train technical personnel for distribution agents to ensure that technical support is implemented locally and solve problems on the spot. The company headquarters is the brain, and the channel is the company's right-hand man. The service ability of the channel is one of the important factors that determine the sustainable development of the marketing network. Manufacturers should regard training as a very important part of channel development work. In addition, the high price of LED products, the need to develop customer interest and recognition of LED lighting products, and many distribution agency associates mostly contact the industry soon, in the short term it is difficult to create a professional sales team, these issues can not be independent agent distribution To solve, the need for vendor assistance, provide training and support, and copy sales and service models to channels.

4. Actively innovate the channel model and strengthen cooperation with cross-domain channel distributors. Although LED lighting is also a lighting product, it is significantly different from traditional lighting products, including its intelligent, dynamic, systematic and other control features and low voltage. Driven by flexible design features, its product form is also expected to be further integrated with related product areas, rather than simply implementing lighting alternatives. Innovative and flexible design features also determine that it has more in common with creative home, creative decoration and other fields, and its controllability characteristics also determine that it is more closely integrated with intelligent control products, intelligent home appliances, smart appliances and other fields. The construction and expansion of LED enterprise channels should not be limited to traditional lighting channels, but can actively explore ways of cooperation with related product channel providers and explore new business models.

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