Light World: Seeking horizontal integration of SME segment market
[Source: "High-tech LED-lighting market" October issue Xiong Yuheng]
At present, the domestic LED industry is experiencing a vigorous reshuffle of the industry. Every day, there are companies who have no choice but to withdraw from this industry stage that carries the dreams of countless entrepreneurs. After all, the premise of realizing the Nuggets dream is: how to ensure that you are not washed out in this industry reshuffle, and thus become the last "leftover", worthy of every company to ponder.
“Small and medium-sized enterprises are likely to lose their business in the reshuffle of the industry due to their limited scale and innovative capabilities. Taking the industry segmentation path, or becoming the best choice for SMEs,†said a business unit manager.
However, taking the road of segmentation development, enterprises will inevitably abandon many technologies or products that have matured, which is particularly difficult for LED application companies. In addition to the road to segmentation, is there a better development model?
Chen Fuquan, chairman of Shenzhen Light World Technology Co., Ltd. (hereinafter referred to as Light World), is trying to find a bottleneck breakthrough by means of subcontracting its internal market segments (Chen Fuquan has taken a special term for this: subdividing responsibility). “This approach can meet the needs of the company's segmentation strategy and can be used as a full LED lighting application product line.â€
In the field of LEDs, the light world is a newcomer. Founded in 2009, the business covers packaging and applications. In 2011, the sales of Light World exceeded 100 million yuan, and the sales of main product spotlights reached 40 million yuan, 80% of which were sold to London. In Chen Fuquan's view, this is mainly due to the lighting of the city's lighting in the 2012 London Olympics.
"As of now, the business model of Light World's subdivision responsibility is very significant. In 2012, the sales of Light World is expected to exceed 200 million yuan, achieving the goal of doubling." Chen Fuquan mentioned.
"High-tech LED" reporter: The slogan of the light world is "to be a professional spotlight provider". What is the consideration based on the choice of spotlights as the main product?
Chen Fuquan: The civil lighting market is the most promising field in the entire LED application. However, due to high prices, imperfect channels, and low consumer acceptance, the market has not been opened.
Commercial lighting and government public lighting projects have become the focus of current LED applications. The demand for spotlights is very large. Light World chose to use spotlights as the company's flagship product, which is also based on this consideration. At the same time, Light World is constantly enriching and enriching its product line, including hard and soft strips, panel lights, bulbs, street lamps, mining lamps, floodlights, etc. .
"High-tech LED" reporter: The survival situation of domestic LED enterprises this year is not optimistic. On the one hand, the overseas market is affected by the economic crisis and the performance is weak; on the other hand, the domestic LED lighting retail market has not been launched in a large area, and the business pressure has increased. What is the performance of Light World this year?
Chen Fuquan: 90% of the lighting products of the optical world are exported to overseas markets. In addition to exporting to the UK, there are more than 60 countries and regions such as France, the United States, Canada and South Korea. At present, this year's export market in the light world is not bad.
As the saying goes, "The gods are saddened by July and August." For the LED lighting companies, July and August are the traditional off-season. However, this year, Light World received a lot of orders in July and August. In addition, after October, the lighting industry will enter the peak season, which means that the sales of Light World will achieve a large increase on the basis of last year, and the initial estimate will reach 200 million yuan.
The end of the London Olympics has had a certain impact on the light world's spotlight exports, but I believe the impact will not be too great. This year, the sales of spotlights in the light world are expected to increase by 10-20% to 50 million yuan on the basis of 40 million last year.
"High-tech LED" reporter: In the current industry of reshuffle, the survival environment of SMEs is worrying. Industry experts believe that if SMEs want to become the last remaining in the industry, they need to take the road of industry segmentation. What do you think about this?
Chen Fuquan: There are tens of thousands of domestic LED companies, but the enterprises that are truly scaled are rare. The lack of funds, small scale, and insufficient innovation capacity have become common problems in the industry. This is especially true in lighting applications where the threshold is relatively low.
Due to the limited scale and innovation capacity, SMEs cannot be all-inclusive, and it is even more impossible to do the entire industry chain. The longer the battle line is drawn, the bigger the funding gap is, and the faster the company dies, the more it is, the more it is, the more it is.
At present, the domestic LED industry lacks brands, and each company has the opportunity to become the industry leader. I believe that the road to market segmentation should be a better choice for SMEs. Even if they can't do the leader, they can also be a strong brand in the segment.
However, if you choose to take the market segment, enterprises will inevitably abandon many products or technologies that have matured. This is difficult for many SMEs to give up. I feel that the subdivision model of the light world's subdivision responsibility is worth learning from.
"High-tech LED" reporter: What kind of model is the development model of the product "subdivision responsibility package"? Can you talk about it specifically?
Chen Fuquan: “ Subdivided responsibility insourcing †is different from the traditional OEM model, mainly for the product segmentation of the company's internal management personnel. The aim is to meet the needs of the company's segmented market strategy and to be a full LED lighting application product line.
The specific implementation method is that we will select the employees with outstanding ability and excellent character from the company to serve as the person in charge of the subdivided products, such as responsible for the light bar, or responsible for bulbs, or responsible for the production and sales of street lamps.
Employees can choose to own shares, and the company provides them with plant, equipment, raw materials, and even mature market channels. They are both company employees and entrepreneurs, so that personal work is more motivated and can better do a good job in each segment of the product market.
At the same time, for the company, it has not only achieved product segmentation, but also made all the lighting products, which greatly reduced the labor and management costs.
At present, the company has carried out its subdivided responsibility for the soft and hard light strips, bulbs, street lamps, panel lights and floodlights, leaving only the main business spotlights. In the follow-up, we will also consider introducing external talents to optimize the allocation of resources.
At present, the domestic LED industry is experiencing a vigorous reshuffle of the industry. Every day, there are companies who have no choice but to withdraw from this industry stage that carries the dreams of countless entrepreneurs. After all, the premise of realizing the Nuggets dream is: how to ensure that you are not washed out in this industry reshuffle, and thus become the last "leftover", worthy of every company to ponder.
“Small and medium-sized enterprises are likely to lose their business in the reshuffle of the industry due to their limited scale and innovative capabilities. Taking the industry segmentation path, or becoming the best choice for SMEs,†said a business unit manager.
However, taking the road of segmentation development, enterprises will inevitably abandon many technologies or products that have matured, which is particularly difficult for LED application companies. In addition to the road to segmentation, is there a better development model?
Chen Fuquan, chairman of Shenzhen Light World Technology Co., Ltd. (hereinafter referred to as Light World), is trying to find a bottleneck breakthrough by means of subcontracting its internal market segments (Chen Fuquan has taken a special term for this: subdividing responsibility). “This approach can meet the needs of the company's segmentation strategy and can be used as a full LED lighting application product line.â€
In the field of LEDs, the light world is a newcomer. Founded in 2009, the business covers packaging and applications. In 2011, the sales of Light World exceeded 100 million yuan, and the sales of main product spotlights reached 40 million yuan, 80% of which were sold to London. In Chen Fuquan's view, this is mainly due to the lighting of the city's lighting in the 2012 London Olympics.
"As of now, the business model of Light World's subdivision responsibility is very significant. In 2012, the sales of Light World is expected to exceed 200 million yuan, achieving the goal of doubling." Chen Fuquan mentioned.
"High-tech LED" reporter: The slogan of the light world is "to be a professional spotlight provider". What is the consideration based on the choice of spotlights as the main product?
Chen Fuquan: The civil lighting market is the most promising field in the entire LED application. However, due to high prices, imperfect channels, and low consumer acceptance, the market has not been opened.
Commercial lighting and government public lighting projects have become the focus of current LED applications. The demand for spotlights is very large. Light World chose to use spotlights as the company's flagship product, which is also based on this consideration. At the same time, Light World is constantly enriching and enriching its product line, including hard and soft strips, panel lights, bulbs, street lamps, mining lamps, floodlights, etc. .
"High-tech LED" reporter: The survival situation of domestic LED enterprises this year is not optimistic. On the one hand, the overseas market is affected by the economic crisis and the performance is weak; on the other hand, the domestic LED lighting retail market has not been launched in a large area, and the business pressure has increased. What is the performance of Light World this year?
Chen Fuquan: 90% of the lighting products of the optical world are exported to overseas markets. In addition to exporting to the UK, there are more than 60 countries and regions such as France, the United States, Canada and South Korea. At present, this year's export market in the light world is not bad.
As the saying goes, "The gods are saddened by July and August." For the LED lighting companies, July and August are the traditional off-season. However, this year, Light World received a lot of orders in July and August. In addition, after October, the lighting industry will enter the peak season, which means that the sales of Light World will achieve a large increase on the basis of last year, and the initial estimate will reach 200 million yuan.
The end of the London Olympics has had a certain impact on the light world's spotlight exports, but I believe the impact will not be too great. This year, the sales of spotlights in the light world are expected to increase by 10-20% to 50 million yuan on the basis of 40 million last year.
"High-tech LED" reporter: In the current industry of reshuffle, the survival environment of SMEs is worrying. Industry experts believe that if SMEs want to become the last remaining in the industry, they need to take the road of industry segmentation. What do you think about this?
Chen Fuquan: There are tens of thousands of domestic LED companies, but the enterprises that are truly scaled are rare. The lack of funds, small scale, and insufficient innovation capacity have become common problems in the industry. This is especially true in lighting applications where the threshold is relatively low.
Due to the limited scale and innovation capacity, SMEs cannot be all-inclusive, and it is even more impossible to do the entire industry chain. The longer the battle line is drawn, the bigger the funding gap is, and the faster the company dies, the more it is, the more it is, the more it is.
At present, the domestic LED industry lacks brands, and each company has the opportunity to become the industry leader. I believe that the road to market segmentation should be a better choice for SMEs. Even if they can't do the leader, they can also be a strong brand in the segment.
However, if you choose to take the market segment, enterprises will inevitably abandon many products or technologies that have matured. This is difficult for many SMEs to give up. I feel that the subdivision model of the light world's subdivision responsibility is worth learning from.
"High-tech LED" reporter: What kind of model is the development model of the product "subdivision responsibility package"? Can you talk about it specifically?
Chen Fuquan: “ Subdivided responsibility insourcing †is different from the traditional OEM model, mainly for the product segmentation of the company's internal management personnel. The aim is to meet the needs of the company's segmented market strategy and to be a full LED lighting application product line.
The specific implementation method is that we will select the employees with outstanding ability and excellent character from the company to serve as the person in charge of the subdivided products, such as responsible for the light bar, or responsible for bulbs, or responsible for the production and sales of street lamps.
Employees can choose to own shares, and the company provides them with plant, equipment, raw materials, and even mature market channels. They are both company employees and entrepreneurs, so that personal work is more motivated and can better do a good job in each segment of the product market.
At the same time, for the company, it has not only achieved product segmentation, but also made all the lighting products, which greatly reduced the labor and management costs.
At present, the company has carried out its subdivided responsibility for the soft and hard light strips, bulbs, street lamps, panel lights and floodlights, leaving only the main business spotlights. In the follow-up, we will also consider introducing external talents to optimize the allocation of resources.
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