The LED lighting industry has entered the era of small profits. Since the end market values high cost performance, downstream application manufacturers have infiltrated this concept into every link of the supply chain and are more willing to choose power supply products with lower prices. Therefore, power supply products can not escape the whirlpool of price competition, industry profits showed a rapid decline trend.
For a while, the integration and merger of the power industry intensified, while its market was also impacted by the "de-power" products, and the industry competition continued to intensify. In the future, how will power enterprises transform to break through the Red Sea dilemma? How to highlight the price competition, seek more market share and profit?
1. Surging price pressures
The global demand for LED lighting continues to rise, but the oversupply of LED LED to the average unit price decline of 30%-40%, manufacturers are facing a loss dilemma, especially in the price war shows a diving decline. Low price fighting in the terminal market drives the price of power products down to a certain extent. For example, in the first three quarters of 2015, the price of the overall domestic driving power supply market decreased by 25% compared with the same period in 2014, and decreased by about 30% for the whole year. Some terminals have made it clear that they need suppliers who can price their products to the extreme, because the thinking model of lighting manufacturers has shifted to pricing according to market demand and are ready to shop in the market.
As one of the core components of LED products, the driving power supply has always occupied a large proportion in the cost structure of LED lamps. According to relevant data, the current power supply accessories in the cost of general lamps and lanterns has been increased to 10%-20%, non-general lamps and lanterns cost accounted for as high as 20%-30%. With the gradual decline of LED lamp bead and whole lamp price, the phenomenon of high cost of power supply has been further amplified, and many LED application enterprises have chosen lower power supply scheme under the price pressure. In the face of the change of market direction, some power manufacturers will ride the wind, relying on low-cost power solutions in exchange for price advantages, to attract customers to purchase.
Due to the continuous progress of technology and the gradual maturity of the market, the sales price of LED power supply is naturally declining, which basically falls at the level of 20% every year, and now reaches the level of 0.5 yuan /W. In such a market environment, if a power supply to achieve greater sales, in fact, there is a great pressure on the cost. In order to reduce costs, power supply enterprises can be described as racking their brains, or by reducing the number of components, or the introduction of a double panel to change the form of a single panel and so on. In most cases, the decline of product price and the control of product quality form a vicious circle.
2. The industry's difficulties continue to highlight.
At the same time, LED drive power market demand growth is also slowing down. For example, related research shows that the market size of LED indoor drive power supply in 2015 was 14.59 billion yuan, a year-on-year increase of 39% compared with 2014, but the growth rate decreased by 15 percentage points compared with 2014; The market size of outdoor LED driving power supply reached 1.45 billion yuan in 2015, up 22% year-on-year compared with 2014, and the growth rate decreased by 10 percentage points compared with 2014. To some extent, this makes the market competition of LED power supply industry more intense.
3. High cost performance and differentiation break the game
Today, LED lighting has become a trend of low price is difficult to reverse, lighting manufacturers will continue to look for lower cost solutions, in addition to the LED light source, driving power and other components, to reduce the overall system cost. With the further concentration of the lighting market to the leading enterprises, high cost performance will become the basis of LED drive power enterprises. High cost performance, LED power supply to ensure the quality of the first, only the quality of stability to achieve a stable market. Industry insiders say that only two kinds of companies will survive in the future: those with strong financial backing, and those with the technology to control quality.
To reduce the cost of power supply, enterprises must optimize the power supply structure and carry out the best power drive configuration. On the one hand, to reduce the cost, we can start from the technical process and optimize the structural design. On the other hand, we can also start with raw material procurement and choose cost-effective suppliers. Under the premise of ensuring quality, scale will become the only way to improve the cost performance of LED power supply. Production automation is a fast way to achieve product scale.
The premise of automation is standardization. This is why the LED drive power industry has been hoping to solve the problem of standardization in order to increase market share and enhance product competitiveness. However, in addition to bulb lamp, lamp tube and other circulation products, downstream lamp manufacturers have taken a differentiated route, the demand for power toward the direction of personality and customization, making it difficult to achieve standardization of power. At the same time, continuous innovation and improvement can also keep the product differentiation and long-term competitive advantage in the industry.