Tongpu Technology: Power LED lighting market

[Source: Gaogong LED's "LED Research Review" magazine April issue Reporter / Wang Cairong]

Why the display industry is so chaotic nowadays, because many companies in the past two years have sprinted their performances in order to go public, and they have sold a large amount of goods to wholesalers.

After the turbulent market turmoil in 2012, the Chinese mainland LED display industry has entered a period of deep integration.

In order to seek new profit growth points, some display companies are trying to explore new marketing models, while others are beginning to “recruit and buy” to actively expand the LED lighting business and lay out domestic and foreign markets.

Shenzhen Tongpu Technology Co., Ltd. (hereinafter referred to as “Tongpu Technology”) is one of the typical representatives of the latter.

Tongpu Technology is a professional service provider that develops and produces LED lighting, LED outdoor full color display and indoor display. At present, the company's products are exported to Europe, America, Mexico, Russia, Japan, South Korea and the Middle East and other countries and regions, and achieved a good market reputation.

"Some small and medium-sized display companies will be phased out this year, and companies with capital strength and technological advantages will achieve rapid development in the integration tide." Pang Guiwei, chairman of Tongpu Technology, said in an exclusive interview with "High-tech LED". In the next two to three years, the concentration of LED display industry in mainland China will be rapidly improved.

Break through the dilemma

“In 2012, Tongpu Technology's LED display business revenue was approximately RMB 120 million, a year-on-year increase of 30%, accounting for 60% of the company's total revenue. It is expected that this proportion will fall to around 40% in 2013.” Pang Guiwei The reporter introduced that the average price of the LED display market last year dropped by 15%-20% compared with 2011, and the LED display enterprise upgrade and transformation is imminent.

A display industry insider told reporters that the current gross profit margin of LED full-color display manufacturers based on channel sales has dropped to 10%-15%, while the gross profit margin of engineering projects is relatively high, basically maintained at 20%. the above. At the same time, some large enterprises with capital strength hope to eliminate some small and medium-sized display enterprises through price wars, which indirectly leads to further compression of product profit margins.

"In the past two years, with the domestic LED display market basically close to saturation, the price has fallen sharply, making the price and profit already very transparent." Pang Guiwei said frankly that the LED display channel has not been so good.

“In the case of indoor rental screens, the previous market was not so transparent, and the orders of middle customers were very sufficient, but now the middlemen and distributors know that the profits are low, they also want to make money, and the company has to give half of their profits to them. This part of the expenditure is very large." Pang Guiwei revealed to reporters that if the company itself to expand the end customer, the monthly order is unstable, plus customer service, installation, commissioning and other after-sales service costs, sales costs too high.

In fact, in the face of the current dilemma of the LED display market, display companies represented by Lianjian Optoelectronics and Qingsong Technology have begun to try to change their marketing strategies and adopt the "advertising screen change" approach, hoping to stimulate performance growth.

"Advertising screen change is a good sales model. If the method is feasible, it can achieve a monopoly position. The display industry has developed to today, companies must start to change their sales strategy, build a car behind closed doors, do not understand the market, and will only go bankrupt. Pang Guiwei gave his own judgment on the market trend of LED display.

For Tongpu's display business, Pang Guiwei believes that the most important thing at the moment is to minimize the cost of the product and to do the amount of display. But at the same time, you must know how to give up, especially those who have the risk of bad debts, you can choose not to do it.

"The chaos in the display industry today is because many companies in the past two years have rushed to the wholesalers for IPO listings, and even sold them to wholesalers, even for long-term credit sales. As a result, the profits of the entire industry have shrunk dramatically, and companies cannot recover their purchases normally. As a result, the entire supply chain is in trouble.” Pang Guiwei said that in the future, LED display companies must learn lessons, and orders that cannot be made must not be done. Otherwise, enterprises may be dragged down.

Layout lighting

In addition to changing sales strategies, Tongpu Technology has also begun to expand LED lighting business to change the existing single business model.

"Last year, our LED lighting business revenue was about 80 million yuan. The overall sales target of the company this year is 260 million yuan. It is expected that the sales of LED lighting business will reach 160 million yuan, accounting for about 60% of the total revenue." Guo Jiajun, director of marketing technology, told reporters.

Since 2012, Tongpu Technology has successively launched LED T5, T8, T10, T12 lamps and patented products - ring lamps and other series of lighting tube lamps.

"The largest shipments are LED fluorescent tubes with a monthly capacity of about 150,000. The largest number of fluorescent tubes in April last year reached 450,000." Pang Guiwei said that the current LED lighting products are not yet available. Counting more, the main reason is to consider the products to be specialized and to expand other LED lighting categories.

In Pang Guiwei's view, each product has its own exclusive market. The problem is that the market positioning, quality and price of the products must match each other. It is not the product category that is made as complete as possible.

“In January of this year, we signed a strategic cooperation agreement with Shenzhen University to establish a joint research and production base for LED and optoelectronics. The two sides jointly developed a COB integrated package to modularize the package to enhance its technical competitiveness.” Pang Guiwei According to the reporter, it is expected that the laboratory will be completed in June this year, when the production of lamps using COB packaged devices will be mass-produced.

In fact, for LED display companies, another difficulty in transforming LED lighting business lies in the construction of terminal channels.

Pang Guiwei said that Tongpu Technology has established LED lighting demonstration projects in Shenzhen Civic Center and other places. The preliminary plan is to use the "engineering case" as an entry point to expand market visibility and promote the promotion with the EMC model.

In addition, in the overseas market, Pang Guiwei said that Tongpu Technology has used the advantages of the original display channel to develop agents in Belgium, Italy and Spain, and established image demonstration stores and brand franchise stores in the local area. Promote to shape the brand.

“LED display channel mode is mostly engineering mode, generally facing the end customer directly, there is a single order, but the LED lighting is different, no need to repeat the development of customers. Once the product sales volume is getting bigger, the brand reputation will be more and more Well, the scale of the company will be getting bigger and bigger.” Pang Guiwei said that if there is a suitable opportunity in the future, it may cooperate with traditional lighting companies.

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