LED lighting self-built channel encounter

In 2011, Qinshang Photovoltaic launched the “Hundred City Thousand Stores” program, and plans to build thousands of “Light Experience Centers” in hundreds of cities across the country.

At the end of 2011, SCI plans to establish about 50 LED lighting stores nationwide. Currently, there are 10 well-established LED lighting stores in cities such as Chongqing, Shanghai, Beijing, and Wuxi.

In early 2012, Hongli Optoelectronics announced that it has invested nearly 10 million yuan and opened 8 image stores.

In May 2012, Hongyan Electric planned to build about 1,000 LED lighting image stores.

In the second half of 2012, Fireflies Group also plans to open LED stores.

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From last year, a number of LED listed companies, including Qinshang Optoelectronics, Chengyi Da, Hongli Optoelectronics and others, have launched LED lighting store construction plans. At the same time, Optronics, Foshan Lighting and other traditional lighting companies also launched L ED lighting products and channel expansion plans at this year's dealer conference.

However, one side is the LED lighting manufacturers eager to open the market, while the other side is a cruel reality.

“Downstream companies need to spend a lot of energy and financial resources if they build their own retail channels.” Zhou Xuejun, Asia-Pacific marketing director for PHILIPS LUMILEDS, said that companies can start from the engineering channel and establish a good reputation. With the brand, retail will be solved. He said that in the past two to three years, these companies may have to bear the risk of investment returns without a test.

The deputy general manager of Huacan Optoelectronics is even more amazing, and now many companies do store, in fact, more like a market trap.

"losing money" still needs time

To establish LED lighting stores, manufacturers must have a very rich product line, including product type, quantity and model. At this stage, most domestic LED lighting companies are still unable to meet this requirement.

In August 2011, Qinshang Photovoltaic started to launch the "Hundred City Thousand Stores" program. As of the end of last year, the company has established "Light Experience Centers" in Shanghai, Nanjing, Xiamen, Xi'an, Suzhou, Guangzhou and Zhongshan.

Why choose this time to start the distribution channel, Qinxu chairman Li Xuliang said that in the LED lighting market, the current main course has not yet come up (real market competition), so it is necessary to catch up before the main course has not yet come forward. Get ready and snatch.

At present, QinShang Optoelectronics is already operating in 100 specialty stores. It is understood that only one or two of these 100 stores make money. Li Xuliang said that at this stage, it is still very difficult for LED lighting stores to make money through retail channels. He said that the implementation of "hundreds of thousands of shops" is very difficult: first, the indoor product line requirements are very rich; Second, we must have a good brand; Third, we must have a sound after-sales service; Fourth, to Consider the needs of customers and differentiate products.

"The first two years, the first quantity, let more than 100 stores advertised out, make a brand." Li Xuliang said that now LED lighting has reached a critical point, this time to establish a brand is the best time.

However, Gong Weibin, chairman of Ruifeng Optoelectronics, expressed another concern that building a brand requires a lot of money and time to accumulate. He said that there are a lot of lamps abroad, there are many brands inside, this is a very successful model, but it takes a long time to accumulate, and the key is to rely on everyone to invest money, many brands are burned by burning from.

It is understood that the establishment of an LED lighting store in China currently requires nearly 2 million yuan a year. Zhang Xiaofei, director of the High-tech LED Industry Research Institute, said that even if the investment of 10 million in the country to establish five LED stores, the effect is not very clear.

In this regard, Zhou Xuejun said that at this stage, LED lighting companies can try to do some contact with some distributors, layout, focus should still be placed on the project.

"In the long run, if you want to brand, you must have the most basic bottom line." Zhou Xuejun pointed out that LED lighting companies do not rush to make breakthroughs in the retail market, it would be better to do export channels in the professional channels. If a solid foundation for word-of-mouth is established on some projects, a very stable project channel will be formed, which will certainly provide very direct help to sales in the next year or two.

At the third meeting of the first G20-LED Summit, participating companies also stated that the LED lighting industry needs to create a brand platform. Large-scale channel operators such as Suning and Gome can reduce the operation of various brands. Cost, on the other hand, the effect of market expansion will also be more reflected.

On the other hand, at this stage, channel operators still have some doubts about LED lighting.

Recently, "GaoYing LED" visited the Lighting City of Beijing and Xi'an. It was learned that most of the traditional lighting products agents do not understand the strength of LED lighting products and LED manufacturers, but the quality of the LED lighting on the market is uneven. The products also caused great trouble to the agents.

The reporter found that in some local lighting cities, there are only a few LED lighting stores, and most of them only set up LED lighting areas in the original traditional lighting stores.

"If LED lighting manufacturers establish their own stores in the lighting city, basically there is no possibility and hope for profit." Xuejun Zhou pointed out that previously including lighting brands such as Philips, in all lighting City stores are also open their own dealers , Enterprises only give certain equipment to repair posts. Right now, for most LED manufacturers, they prefer to cooperate with traditional channel manufacturers and use their existing channels to sell LED lighting products.

Engineering channels first

"Now do LED lighting stores, retail gross profit margins are 40% -50%, but the amount is not in retail, but in the project." Xuan Ping, general manager of Foshan Zhipai pointed out.

Because the current LED lighting fixtures do not exceed the advantages of traditional lighting in terms of price and brand, it is natural to encounter great resistance to take the retail channel.

"In traditional lighting consumer groups, 60%-70% are professional users, and 30%-40% are home users." Zhou Xuejun believes that professional users (engineers) occupy the largest market share among lighting consumers.

Now, the LED home lighting market has not yet fully started, but the market demand for large and small commercial shops and engineering LED lighting has gradually warmed up. Li Xuliang pointed out that currently 60%-70% of the projects come from newly-renovated commercial shops. Although the number is small, the demand is still large.

In fact, many industries are entering the market through professional users. From the perspective of the current product and cost characteristics of LED lighting, the channel is still concentrated on the project in the short term. Xu Ping pointed out that due to the pursuit of effect and individualization, engineering lighting requires a large variety of products and can be customized according to demand. This raises higher demands on both agents and manufacturers.

For agents, agent products need to pay a certain deposit. The more varieties, the more deposits. Many agents are also reluctant to take the risk of this capital, which also causes the problem that the store has few stocks and incomplete types.

Xu Ping believes that at this stage, LED lighting stores should take both retail and engineering roads to ensure sales and seize market opportunities in the future.