2014 LED market or a big explosion?

According to the “China's Roadmap for Phase-out of Incandescent Lamps”, from October 1, 2014, the import and sale of incandescent lamps for general lighting of 60 watts or more will be banned. This is very good for the LED market and will open up a larger market - home lighting. People began to carnival for the imaginary "LED market explosion."

However, the real outbreak of the LED market may also be plagued by some real problems. For example, the product standards in the LED market are still confusing. This can also be seen from the results of a special inspection conducted by the State Administration of Quality Supervision, Inspection and Quarantine in 2013 on the national supervision of LED lighting product quality. . This will not form an obstacle to the LED market outbreak? CFL will not exit the market quickly? This will affect the popularity of the LED home market. Although the lighting stock market looks very beautiful, but "real high" is still in place, and the chaos of the stock market also makes users skeptical.

Standard issues

Guo Tong, director of marketing at Guangdong Sanxiong Aurora Lighting Co., Ltd., believes that standards are very important to an industry, and it is also true for the LED industry.

Generally speaking, LED products must first meet the national standards, such as China's energy conservation certification, 3C certification, national fire certification, etc. If you want to export, but also to meet some of the foreign certification standards, such as CE, VDE, TUV certification.

In response to the global environmental pollution and ecological destruction and other major environmental issues, comply with the development of international environmental protection, in accordance with the needs of international economic and trade development, but also need to meet the ISO14001 environmental management standards.

“If there is a unified standard, it will promote the wide application of LED products. At present, our LED market product standards are more, in addition to national standards, there are some industry standards, alliance standards, etc. For the intersection of various standards We will follow as much as we can. If there are conflicts or differences between standards, it will be more difficult for companies to operate.”

Dr. Wu Mingming, director of research and development of the National Semiconductor Lighting Engineering and Industry Alliance (CSA), expressed concern about this. LED lighting companies have a large number of products with uneven quality, which is affecting the market's standardization and LED application. However, she also pointed out that CSA is actively promoting the standardization of the LED industry in light of the chaos of industry standards, such as the LED-ELI certification that has been jointly launched with Fangyuan Certification, aiming to promote reliable products and reaffirm the confidence of the people.

Jing Wen, the managing director of Jingtai Optoelectronics, bluntly stated that many standards are also very troublesome for the packaging plant. Ten products may require 10 different production lines and the cost is very high.

However, he also pointed out that the imperfect standards have also given many small and medium-sized enterprises a chance to survive. Many companies with self-owned IPs such as Jingtai still hope to have more uniform standards, but for smaller companies, once they are standardized, they will be cut off. "This is a test for SMEs' innovation capability, technical support and capital strength."

Energy-saving lamps still have market

Although incandescent lamps for general lighting have been limited, the traditional lighting forces are still large.

Relevant data show that although the lighting industry’s LED industry turnover has increased substantially, for example, according to the announcement, about 30% of the current operating revenue from solar lighting comes from the LED business; the proportion of LED products from many lighting companies in Europe has reached 50% - 60%. However, consumer acceptance of LED products is not as good as it seems.

Some surveys have shown that many residents of second and third-tier cities still know very little about what is LED, not to mention acceptance. In this case, there is still a large market for energy-saving lamps. There is no doubt that LED lights entering home lighting will need to be widely popularized.

However, the trend of LED lighting cannot be changed.

Wu Mingming pointed out that from the survey of home lighting applications in the second half of 2013, traditional lighting products are still the mainstream. CSA Research data shows that at present, more than 90% of the merchants in Beijing's professional lighting market have begun to sell LED lighting products, but the sales volume from LED products only accounts for about 10% of all lighting products.

Nevertheless, compared with the high prices of home-use LED lamps a few years ago, and it is difficult for ordinary consumers to buy LED lights in the market, it is obviously a big improvement. It reflects from the side that the home furnishing market has begun to gradually accept LED lighting.

LED lights are constantly eroding the market share of traditional lighting products such as energy-saving lamps.

At present, the price gap between LED lamps and energy-saving lamps is significantly reduced. CSA Research statistics on LED lighting products with good brand and sales conditions sold by e-commerce companies such as Tmall and JD.com show that the average price of LED bulbs at the end of 2013 has already dropped to 5 yuan/W, which is equivalent to that of brightness. Energy-saving lamp prices are not much different, even lower than energy-saving lamps.

Such as a Philips 3W bulb lamp is only sold to 19.9 yuan, some domestic online marketing better brands even down to 2 yuan / watt below, simply from the price, the barriers are not really big. In terms of comfort, aesthetics, etc., LEDs are even better. Wu Mingming pointed out that there will still be a considerable market for energy-saving lamps. In 2014, the household LED lamp market will not break out. However, for new markets, such as newly renovated home applications, it will be an opportunity for LED applications to grow.

Guo Yan believes that if it is from the previous two years, the brightness and cost of LED lamps are not much more competitive than energy-saving lamps. But for two years, the price of LED lamps has dropped rapidly, and even some of the poor quality LED lamps are even lower than the energy-saving lamps. For home applications, the current price of LED products can already be accepted by a large number of families. At the same time, LED lamps have advantages and potential for development in terms of their appearance, shape, and plasticity. From these perspectives, the LED market in 2014 will be better than in 2013.

Profits fall behind "real"

At the beginning of 2014, the LED sector as a whole changed, and the stock market index rose sharply, allowing the industry's collective excitement. However, there are also analysts who believe that the stock market is "virtual." .

Wu Mingming does not believe that such “high vanity” is unique to the LED industry. In fact, the entire stock market will have such problems. The key lies in the fact that the stock price is “false high”, which is the year-on-year decline in LED gross profit margin. "Last year, LED industry profit margin was about 20%, higher than the electronics industry."

Compared with the LED industry itself, this profit margin is shrinking, indicating that the industry's competition has become fiercer, and product prices have declined and become closer to the people, which is more conducive to the adoption of LED for ordinary consumers. She pointed out: "If you look at the company's perspective, maintaining a high profit margin is only possible through technological innovation and business model innovation."