After one or two decades of development, the LED display industry has evolved from an immature market of natural products to a mature industry that has formed a certain market scale, has a number of core enterprises, and ranks first in the world in terms of product manufacturing volume, and has gradually transitioned to a mature industry. The formation of the LED display unit board wholesale market is a necessary process and product of its development. The emergence of wholesale companies confirms the rapid development of the LED display industry and the broad market demand. In particular, the production and manufacturing of LED display products has been divided and refined, the barriers to entry have been rapidly lowered, simple assembly companies have begun to copy, and the number of wholesale companies has continued to increase. Especially in the past two years, a number of wholesale unit board manufacturing companies have emerged in the market.
1. Analysis of existing problems in the development status of LED unit board wholesale manufacturing industry
Generally speaking, LED display unit board wholesale manufacturers do not have fixed R&D personnel. Most of the products sold are conventional displays, mostly indoor and outdoor full-color screens. Product models range from P16 to indoor P4, P3, etc. P2.5 high-density small-pitch LED displays are also wholesaled, but the output is extremely small.
The current situation is that LED display screen wholesale companies mainly use product price as the main means of competition. Therefore, there is a phenomenon that incremental increases do not increase revenue, or even incremental increases lead to losses. The LED display market has been quite exaggerated in the past few years. When several large companies worth hundreds of millions of yuan went bankrupt, they were involved in the problem of staggering amounts of arrears in payments to suppliers. Subsequently, the loan problem of the entire display industry became increasingly serious. Nowadays, wholesale manufacturers generally require cash when purchasing lamp beads, and other spare parts are usually paid on a monthly basis. Because once a wholesale enterprise becomes large, labor costs and various expenses will be a very large amount. If working capital is insufficient, the first thing that will be affected is the supply. Without sufficient supply, normal production will not be possible, and the enterprise will suffer losses due to the inability to produce normally. For example, if you want to buy Mulinsen’s lamp beads, Mulinsen requires cash and can pay and ship the goods every Monday to Friday. If the company does not have sufficient funds and cannot pay in cash before Friday, there may be no lamp beads available on Saturday, Sunday and Monday.Yes, this happens from time to time.
Therefore, the current situation of LED display wholesale manufacturers is very severe, and the improvement of the capital chain is the key to their continued survival and development.
Judging from the distribution areas of LED display unit board wholesale manufacturing companies in China, they are mainly concentrated in South China, and 80% of South China is concentrated in Shenzhen. Secondly, Fujian Province in the southeast is also an important area for unit board wholesale manufacturing. Although there are not many companies, the output value accounts for More than 30%, especially Qiangli Jucai, has developed particularly prominently in the past two years and is a dark horse in the LED unit board wholesale industry. Its total sales in 2013 exceeded one billion yuan. Secondly, there are a number of strong unit board wholesale sales manufacturers in Fujian such as Cailiang and Aimin. In the Shenzhen area in southern China, it can be said that 80% of unit board wholesale manufacturing companies are concentrated. These are similar, and the products are also highly homogeneous. No one is the leader. There is no leading display screen wholesale manufacturer in Shenzhen. There are more medium-sized companies and countless small companies. Wholesale manufacturers such as Shenzhen Zhonghengcheng Electric, Mingchang Optoelectronics, Huaxia Guangcai, Trina Optoelectronics, and Helilai all have an annual gross production value of more than 100 million yuan, and a monthly production capacity of about 100,000 sheets or more. There are still a large number of manufacturers with annual sales of around 10 million yuan, mainly in the form of OEM production and simple processing and production.
The profits of the entire LED display industry have been declining in recent years. In 2011, the industry's net profit averaged about 25%, but the gross profit in 2012 was only about 15%, and profits have shown negative growth. According to industry rules, in the field of LED displays, companies must maintain a gross profit of more than 20% if they want to be profitable. Industry profits have fallen, and reducing LED usage costs has become an important way for companies to make profits. The profits of companies that wholesale unit boards are even more ugly. Analyzing the profitability of LED display unit boards, LED unit board wholesale is in a rather embarrassing position, relying on volume. In terms of net profit, it can be said to be the lowest link in the entire industry. The net profit of full-color unit board wholesale remained between 1-3% in 2014, and the net profit of single- and double-color unit board wholesale in 2014 fluctuated at 1%, or even sometimes below 1%. Therefore, LED unit board wholesale companies do not occupy a favorable and proactive position in the entire industry chain. On the contrary, in order to obtain meager profits, they do not hesitate to engage in price wars, not seeking the lowest, but only seeking lower prices.
2. Analysis of market demand and industry supply in the LED unit board industry
Judging from the current development situation, LED display products have expanded from the initially narrow professional-grade and high-end applications (such as radio and television, electric power, telecommunications, etc.) to now covering dozens of subdivided application fields such as public administration, people's livelihood, energy, industry, commerce, entertainment, etc. As upstream LCD panel manufacturers continue to introduce new products, LED display product lines are constantly updated, and the trend of LCD panels makes products more accessible to the people. At this stage, among the current mainstream large-screen display technologies, the market share of LED displays accounts for 48% of the overall market, almost catching up with the market share of DLP.
The technical foundation and level of my country's LED display industry is quite advanced. The main products and key technologies are generally consistent with the advanced level of the international industry. However, the process level is still relatively backward. There is a clear gap with foreign countries in terms of product standardization, complete machine system design, reliability, manufacturing process, detection and testing methods, etc. LED device technology and performance continue to improve, and electronic technology develops with each passing day, which provides a good foundation for the technological deepening and improvement of LED display products. At the same time, LED displays have been widely used in various fields of social life, and semiconductorThe development of the volumetric lighting industry has brought good opportunities to the LED display industry. Therefore, the development prospects of the LED display market are optimistic. Deepening the technical connotation, enriching the product system, diversifying products, and highlighting the advantages of leading products will be important trends in the development of the LED display industry.
Display screen is also one of the main application areas of LED. LED display screens have the advantages of high brightness, large viewing angles, long viewing distance, flexible shapes, and rich colors. They can meet the needs of different application scenarios, especially in ultra-large-size display applications. my country's LED display industry has maintained rapid development since its inception in the 1990s, creating the initial prosperity of the LED industry. At present, the global LED display market is still on the rise. According to earlier predictions by the China Optics and Optoelectronics Industry Association, China's LED display market size will reach 24.094 billion yuan in 2013. The LED display market will continue to grow rapidly in the future, and is expected to maintain a growth rate of about 15% in the next 3-5 years. Among them, LED full-color display screens will grow faster, reaching an average annual growth rate of about 30%. Display application will become one of the most stable growth points in the domestic LED application field. This will undoubtedly drive the LED unit board wholesale marketThe rapid development of the market.
The development of LED display applications has also led to the rise and development of the entire wholesale market. From the perspective of the demand of the LED display unit board industry, in the past, single and double-color LED displays were the main business of wholesale manufacturers. With the explosive growth of full-color displays, the wholesale business of full-color screens has quickly occupied the market, and even single- and double-color door screens have gradually become full-color door screens.
Indoor LED display unit board application products are one of the LED application product categories with the largest market demand growth in recent years. Among them, the demand for full-color LED unit boards is the strongest. This is determined by several factors: First of all, the popularity of LED display application equipment in large-scale indoor activities has undoubtedly given a boost to the unit board demand market. It is obvious that today's large-scale concerts, parties, celebrations, and even indoor weddings are indispensable for the momentum and atmosphere created by LED large-screen equipment; secondly, the continued decline in the price of indoor LED displays has given considerable impetus to the LED unit board wholesale market; finally, mainly due to the continuous improvement of product technology, the comprehensive performance of the product itself has been greatly improved, which has become a solid foundation for the market expansion of LED unit board products.
The LED unit board wholesale market began to increase in volume in 2010. It can also be said that the LED display industry began to move towards a more mature development stage in 2010, which gave rise to large-scale demand for unit boards and the rise of the wholesale market. Many LED unit board wholesale companies were also established and developed at this time. According to the development situation in 2013, the national unit board wholesale market has exceeded 2.5 billion, an increase of 40%. From individual companies In terms of sales, there are more than 5 companies selling wholesale unit boards with a sales volume of over 100 million yuan in 2013. The sales target of Qianli Jucai in 2013 is 1 billion yuan, and the actual completed sales are estimated to be around 800 million yuan. Suizhou, Hubei Meiyadi is closely following Qianli and achieved sales of 350 million yuan in 2013. Trina Optoelectronics' 2013 revenue was 230 million yuan, China Guangcai 150 million yuan, Helilai 180 million yuan, Zhongheng Chengdian and Mingchang Optoelectronics also exceeded 100 million yuan.
3. Product Price Analysis of LED Unit Board Industry
Speaking of price, there has always been a pain point for LED unit board wholesale companies. Wholesale companies do not have core technical strength and do not occupy a favorable and active position in the entire industry chain. On the contrary, in order to obtain meager profits, they do not hesitate to engage in price wars.Seeking the lowest, just seeking lower. Due to the low entry threshold, LED display wholesale companies seem to be accessible to everyone. Those with some funds will rush in, and those without funds will dare to do nothing. As a result, display screen wholesale companies are blooming everywhere. With the price transparency of LED display products, the degree of competition has intensified. Some display screen wholesale manufacturers have no long-term awareness. As long as they can receive orders, they can do it as long as they do not lose money. In order to reduce costs as much as possible, they had no choice but to ask suppliers to reduce prices. While reducing prices, they also weakened product quality. LED displays with no price bottom line and no quality assurance obviously overdraw the potential and profit margins of future development. Especially for conventional display products such as P10, according to the current price trend, there is almost a danger of bottoming out in the future.
Table 1: LED unit panel indoor full-color wholesale price list for the second quarter of 2014 (average price based on market sampling survey statistics)
The above average wholesale price of some unit boards in the second quarter of 2014 is based on the sampling statistics of quotations from mainstream companies in the market. Compared with the average price in the first quarter, the wholesale price of each unit board dropped by about 20% for indoor products and about 25% for outdoor products. Generally speaking, the decline is relatively high. At present, there is no unified standard for the wholesale price of LED unit boards. As long as wholesale companies have an order, they will sell it at a price not lower than the cost. Even some products such as P10, although they are mainstream products in the market, many companies are unwilling to take such orders. There is basically no profit to be made, and they follow the volume rather than the price.
In addition to the above conventional products, LED small-pitch unit boards have also been wholesaled in the market, mainly including P1.25/P2.5/P1.5/P1.875 and other products with several pitches. The wholesale of small-pitch unit boards is mainly custom-made. Judging from the situation in the first and second quarters of 2014, product prices are basically stable. The wholesale price of P2.5 unit boards is around 28,000/square. At present, there are not many companies involved in the wholesale of small-pitch unit boards. Huaxia Guangcai is an enterprise that entered the small-pitch wholesale market relatively early. It has made market planning and preparations, but there are very few orders.
IV. Analysis of Marketing Channels in the LED Unit Board Industry
Sales channels are the sales carriers that use channels as the form of sales. It mainly refers to how to develop and select dealers, daily management of dealers, how to assist dealers in marketing, daily maintenance, etc., and can propose corresponding strategies according to market changes, and effectively encourage dealers to grow together. Of course, it also needs to deal with some market conflict issues.
The sales channels of the LED display industry are mainly divided into two categories, direct sales and distribution. From the above figure, we can see that wholesale companies are more inclined to choose the distribution channel model. Of course, some engineering display screen manufacturing companies will also purchase from these unit board wholesale companies in order to reduce costs. This channel model is relatively invisible in the industry. Companies keep each other confidential and benefit from each other. Regarding direct sales and distribution models, which one is more suitable for LED unit board wholesale companies must also be customized.
First of all, direct sales channels are direct and clear, accounting for a large proportion in the industry. Due to the obvious engineering nature of LED full-color display screens, projects usually include product design, engineering construction and after-sales maintenance. Since the projects have the characteristics of small quantity, large investment, long payment recovery time, and high risk, dealers play a relatively small role, so the industry channel structure is relatively simple.
Secondly, distribution can quickly occupy the market and reduce corporate capital risks. In order to occupy a larger market space, display screen companies continue to develop dealers and agents, and distribution channels have developed rapidly. At the same time, the financial risk in the LED display industry is a big problem that plagues every company. On the one hand, profits are meager, and at the same time, many companies have to accept layers of deposits. It is under this background that many companies are forced to choose the distribution model.
From a profit perspective, the gross profit of direct sales is obviously higher than that of distribution, but the payment cycle is uncertain. Therefore, domestic display screen wholesale manufacturers are facing a choice, control the market or control the gross profit margin of products? If you want to expand the company's market share and open up channels, then distribution is obviously more suitable. If you want to maintain a stable and high profit rate, the direct sales model is in line with the goal.
Judging from the current marketIn the short term, the total sales of LED full-color screens will still be dominated by the direct sales model. At the same time, the distribution model is increasingly favored by small and medium-sized enterprises and large-scale enterprises, and it has become more obvious to seize distribution channels across the country. In 2013, distribution has surpassed direct sales, accounting for 75% of the entire unit board wholesale market. The premise of channel planning is to investigate the composition and demand of the market. The LED display industry includes many subdivisions, such as advertising media, information display, stage performances, sports venues and various special applications. Among them, each major field includes low, medium and high-end applications. For high-end engineering application projects, the direct sales model obviously has a more competitive advantage. Through tendering, tendering and competitive bidding, ranging from a few to dozens of companies compete for a project. If it is a small project, there are usually some relationship networks in various places, and the degree of competition is relatively relaxed. In ordinary leasing and commercial markets, the distribution model is more flexible.
The size and positioning of an enterprise are crucial factors in determining the channel it chooses. For display screen wholesale companies at this stage, it is not that there is no market demand, but that the market competition is too fierce. Those who sell directly cannot receive orders. After receiving orders, they are worried that they will not receive payment. Even after receiving payment, the profits are meager and unsustainable;We can sell the products without worrying about orders, but the management of agents and dealers in various places is difficult. We also have to worry about being snatched away by other companies. How to ensure large-scale shipments is a headache. Therefore, enterprises must determine what kind of positioning they have and how to accurately select channel models based on their own capital, software and hardware strength. Companies such as Xiamen Qianli Jucai and Shenzhen Huaxia Guangcai mainly focus on product wholesale, and the distribution model accounts for a large proportion of corporate profits. In 2013, Qianli Jucai built more than 30 brand image stores to serve customers with a unified brand image. On the one hand, these image stores help build the brand of Qiangli Jucai, and on the other hand, they also provide customers with ways to buy genuine products with guaranteed quality. In addition, Qiangli Jucai provides customers with a relatively complete solution by acting as an agent for LED display peripherals such as driver ICs and control systems, allowing customers to save worry and effort, and increasing the added value of products and services. Jingcai Optoelectronics has also become an agent for Juju’s control system, taking advantage of its channel advantages and complementing Juju’s new business for a win-win situation.
From the perspective of the development trend of the times, the e-commerce model is undoubtedly a new star and will surely become the ultimate trend in commodity sales. However, although this trend exists, it does not seem to become mainstream in the foreseeable period. For a long period of time, physical store sales will still remain the same.It is the main body of the LED industry, which must be very clear. And precisely because physical sales are based on having products first and then trust, the customer base is more stable than the emerging e-commerce retail industry, and it has better operability and predictability whether developing new customers or maintaining old customers. For most LED display operators, choosing to be familiar with it is a sure win.
Recently, the mobile e-commerce model has also emerged in the unit board module wholesale market. At the 2014 Optical Expo, Shenzhen Liangcai launched a "module discount store" and "mobile phone online shopping platform". Shenzhen Liangcai is a wholesaler of LED displays, specializing in unit boards and selling them to advertisers. Mobile phone discount stores have as many modules as you want, and they mainly sell genuine products. Customers can buy a small number of tablets first. The smaller the number of tablets, the cheaper it is. For a grade of 27 pieces, for example, if a project requires 360 pieces of P4 modules, go to the category and click P4, click again, and search between 300 and 400. There happens to be a 364 piece, which is very close, so you can purchase it and place an order. It is more convenient to place orders in small quantities. You can check the discount store's inventory at any time, how many pieces are in it, and what the price is. This is an internal beta version of the mobile client owned by the independent Liangcai TechnologyThe trading platform has changed the traditional trading method, but the after-sales service is still the same as offline. If there is a problem, you can repair and return it on it. These are all things that can be done on it. If something goes wrong, call us as soon as possible. Repairs can be done without a contract. This channel model of Shenzhen Liangcai is also a type of e-commerce, but it can realize buying and selling transactions on the mobile terminal, which is also a new channel model.
The last thing is to recognize the advantages and disadvantages of various channel models. The traditional physical store sales channel has a long history, face-to-face communication, and buying good products can often easily gain people's trust. In addition, "a monk who can run away cannot run away from the temple", which is also greatly beneficial to administrative supervision. From the perspective of people's consumption safety, it is natural that more and more major consumer groups will rely on the physical purchase channel for a long time. At the same time, shopping is not just about buying things, but also about finding a leisurely way of consumption in a busy life.
In many cases, channels do not have complete boundaries, and display screen companies are not limited to the construction of which channel, and are even trying more new channels. In short, any channel that can sell products and make money can be respected.
5. Development characteristics and trends of the LED unit board wholesale industry
1. Geometric corporate fission
The "fission" in corporate fission - the company continues to split into individuals similar to itself. In the process, the company's advantageous genes can be completely copied and passed on. "Change" - On the basis of "split", the genes of enterprises produce optimized mutations, and enterprises can reshape their competitive advantages to suit the new business environment. Compared with LED unit board manufacturing companies, although the word "fission" can be used, it cannot be interpreted in terms of the "fission" development model. The reason why unit board wholesale companies have developed to the point where no one can dominate is because of endless copying and imitation. The core personnel of the original company led some people and some customer resources to set up separate companies. Because there is no core technology in this industry, this kind of "fission" is the norm in the industry.
2. Tight triangular debt exacerbates corporate risks
It can be said that none of the companies that engage in unit board wholesale has enough cash flow to support corporate development. They generally cycle in the vicious circle of triangular debt, so this highly aggravates the risk of corporate development. The collapse of companies in the display industry is basically caused by this reason. Based on the above reasons, unit board wholesale companies are also more cautious in choosing suppliers. Considering the cost issue, most companies use Mulinsen-packaged lamp beads (except for some customers who specify which lamp beads to use). However, Mulinsen has very high requirements for customers and requires the most stringent requirements before ordering. An advance payment ranging from 500,000 yuan to less is equivalent to a deposit. If the product quantity and price exceed the deposit, Mulinsen will immediately stop supply and continue supply after receiving payment. Therefore, this makes it difficult for some companies. If there is a problem with cash management, production will be suspended.
3. Internal management of enterprises needs to be improved
The LED industry is a grassroots industry, and unit board wholesale companies are particularly prominent. More than 80% of the managers in unit board wholesale manufacturing companies have technical or market backgrounds. They know a lot about technology and markets, but when it comes to management, they just feel their way across the river and get there. In our survey, even companies with more than 200 employees adopted a one-word system within the company. Every detail of the company had to go through the general manager. Internal department divisions and employee responsibilities were not very clear, and employee training was not up to date, resulting in a huge waste of human resources in the company. The ultimate reason why Qiangli Jucai has developed so fast is not the strong market development, but also the internal restructuring and construction. Forging iron requires one's own hard work. If unit board wholesale enterprises want to develop well, internal restructuring needs to be improved.
4. After-sales service and channel loyalty
After-sales and pre-sales services include pre-order tracking, answering questions during the order, and after-sales maintenance after the order is completed. Usually, LED display wholesale companies have large manufacturing volumes and large orders. The customer groups they face include not only peers, but also dealers, agents, contractors, and even private owners and individuals. The difficulties and problems they encounter are more complex and diverse. At present, according to general market regulations, display screen wholesale manufacturers provide products with a one-year warranty. If there are product problems, they will be returned to the factory for repairs and will not provide door-to-door repair services.
Unit board wholesale manufacturing companies do not pay as much attention to after-sales service as LED display companies in the engineering channel. Some companies even do not have this service. Although some companies say that during the warranty period, they are responsible for the maintenance and maintenance of all equipment stipulated in the contract. Any equipment or parts damaged due to product design, installation technology, materials, product quality and components will be replaced and repaired free of charge. However, repairs and maintenance are often beyond our reach due to various reasons. This results in a great reduction in customer loyalty, and it is common for customers to abandon and choose another partner. There are also some distributors or channel dealers who are not necessarily loyal to one company and often choose other companies. If we talk about product qualityThere is not much difference in quantity, so display screen wholesale manufacturers will have to compete to see whose service is better and which is more cost-effective. In the future, if LED display wholesale manufacturers want to become bigger and stronger, they must improve their products and services and avoid one-time business.
5. Endless price war
In recent years, the price of LED display products has dropped at an unexpected rate, and companies have suffered from price wars. Even listed companies have no greater advantage to protect themselves. Among them, enterprises mainly focusing on wholesale have the heaviest burden, which consumes profits and space for future market development in advance. In the long run, it will inevitably affect the development of the wholesale market of the LED display industry. By increasing the added value of products and increasing the comprehensive soft power of enterprises, product prices are increased and the industry image is enhanced. The LED display wholesale market is already a mixed bag, and product quality is uneven. Low-quality and low-price companies may be able to gain a certain small market share through temporary chaos, but they will eventually be eliminated. It is difficult for display screen wholesale companies to change their business thinking. They need to make up their minds. This change must not only start from the quality within the company, but also change the agreement with suppliers and raise the quality of products again. With product quality as a bargaining chip, you will at least have the confidence to participate in market competition, which is also healthy.
6. Integration to increase revenue and reduce expenditure
LED display small and medium-sized enterprises actively integrate in response to external environmental changes. In fact, it is also the integration of the supply chain and capital chain. Only smooth integration can truly achieve open source.The purpose of throttling. External top-to-bottom integration of the supply chain is a strategic form for companies to combine production with raw material supply and product sales. It can strengthen the company's control over material supply, product manufacturing or sales processes, and at the same time increase the company's profits at each business stage. For example, Xiamen Qianli Jucai has maximized the benefits of the supply chain through strategic alliance cooperation with driver IC companies, power supply companies, and control system companies. Light Energy Technology has also ensured the smooth flow of the supply chain through a series of linkages and cooperation with suppliers. Sharing resources and value with suppliers is a form of strategic alliance formed in the current fierce market competition environment. The cooperative enterprises use various resources inside and outside the industry to promote the growth of interests of both parties based on the concept of value sharing. Sharing some common experiences and channel resources has greatly improved their adaptability in the market, enhanced their immunity to financial problems, and ensured the steady development of funds. Regardless of the size and strength of the company, the eight immortals of LED display companies cross the sea and show their magical powers. Listed companies have their own methods, and small and medium-sized enterprises also have their own methods. As long as we actively regulate the internal and external aspects of the enterprise according to our own situation, we can not only achieve the rational allocation and effective withdrawal of funds, but alsoAble to achieve sustainable development of capital flow.
Summary:
With the development of technology and market, my country's LED display industry will gradually improve during adjustment and have a reasonable division of labor, forming a new industrial pattern. In the overall industry chain, the formation of leading enterprises in LED device production and backbone enterprises in display product production will redefine the division of labor in the upstream and downstream industries and highlight the professional division of labor and collaboration. Perhaps in the early stages of the development of the semiconductor lighting industry, the definition of specialized division of labor and collaboration between LED device manufacturers and display product manufacturers was relatively vague, but as the market expands and technology products mature, this definition will become increasingly clear. At the same time, LED displays have been widely used in various fields of social life. The development of the semiconductor lighting industry has brought good opportunities to the LED display industry. Therefore, the development prospects of the LED display market are optimistic. Deepening the technical connotation, enriching the product system, diversifying products, and highlighting the advantages of leading products are important trends in the development of the LED display industry, and are also issues that LED unit board wholesale companies need to think deeply about.
The current LED unit board wholesale market does not lack competitive products, but it lacks innovative marketing models, including cooperation models between enterprises and professional managers, channel cooperation models, profit models, and promotionmodel, channel operation model, etc. Most companies fall into homogeneous competition at the marketing level. The marriage of capital and technology has laid a good material foundation for the back-end of marketing, making it faster, stronger and more stable at the marketing level. Because marketing competition that is divorced from the product and technical levels tends to move faster and has higher risks.
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