LED foundry enterprise domain independent brand parallel
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At the beginning of reform and opening up, China has become the best destination for the processing and manufacturing of low-end industrial chains in Europe, the United States, Japan and South Korea with low labor costs and favorable investment conditions. The LED industry is also the same. By vigorously developing the export-oriented OEM economy, a number of LED industrial zones in the coastal areas such as the Pearl River Delta, the Yangtze River Delta and the Chongqing Triangle have been formed. At present, foundry is still one of the main development models of China's LED industry. With the decline in the price of LED products, the intensification of market competition, the compression cost of brand enterprises, the continuous disappearance of domestic demographic dividends, and the rising cost of raw materials, the development of foundry companies has been severely constrained. In the face of a changing economic environment, LED foundry companies must actively transform their strategies, otherwise they will be eliminated by the market. The foundry risk and machine LED foundry mode mainly has three modes of processing, OEM and ODM. OEM is original equipment manufacturing, commonly known as OEM; ODM is based on OEM, engaged in or involved in product development and design. At present, the domestic LED industry OEM is mainly OEM. Relevant data shows that the proportion of LED products exported to China has reached 80 or more. OEM can help brands and manufacturers achieve win-win cooperation, combining brand and technological advantages with cost control and cheap labor advantages. Foundry has become one of the main ways for traditional lighting companies to transform LED lighting and participate in global competition for most domestic LED companies. Traditional lighting companies such as NVC Lighting, Foshan Lighting, and Midea have all adopted the OEM model to cut into the LED lighting field. For these traditional lighting companies that win by channels, the biggest advantage is obviously not the production link. In March 2010, Abbison established the lighting division, which defined its positioning of LED lighting professional OEM/ODM integration service providers around the world, and chose to manufacture as an important foundation for the lighting industry. Many domestic SMEs focus on OEM business, mainly due to the pressure of survival. OEM orders are relatively stable, with short operating cycles, cash on delivery, and there is not much financial pressure and inventory. OEMs only need to focus on R&D and production. Branding requires huge upfront investment, high profits and high risks. A senior industry insider said. Affected by energy conservation and emission reduction policies, the demand for global LED terminal products has risen sharply. International lighting giants, domestic brand LED manufacturers and cross-border enterprises have entered the field of LED lighting, and continue to expand production capacity to seize the market, which provides OEMs with more development opportunities. OEM has become an effective way for brand operators to quickly seize the market. For brand operators with strong financial strength, strong brand influence, advanced technology research and development and rich market operation experience, the integration of product advantages through OEM can maximize production capacity and diversify products in a short period of time. . Most of the products such as Philips, Osram and GE are produced by OEM. Shanghai Yaming, Sunshine Lighting, Feihua Lighting and Libit Lighting have successively processed the energy-saving lamps series for Philips. As the manufacturing value with the lowest added value on the smile curve, the labor cost difference is the main source of profit for the foundry company, because the customer will pay the OEM at a higher labor cost. However, as domestic labor costs and raw material costs continue to increase, the demographic dividends gradually disappear, and LED foundry companies can only rely on their volume to maintain profitability. Foxconn, the most influential foundry in the world, is best at large-scale production, labor costs and material cost control. Now it is also beginning to transform itself, taking its own brand and adopting machined production. It can be seen that the situation of small and medium-sized foundry enterprises is even more difficult. An industry insider said: In the past, for the processing of big brands, the profit is still OK, but with the increasingly fierce price war, the brand companies can keep the price low and the profit is getting thinner and less careless. It will lose money. In this regard, Professor Xu Chunming, deputy dean of the School of Intellectual Property of Shanghai University, said that China's foundry enterprises must transform, because the profit model of foundry lies in low labor costs, but in the past two years, China's labor costs have increased by 10-20 per year. , squeezed the profit margin of China's LED foundry industry. China's LED enterprises must realize the transformation from cost-driven to innovation-driven and take the road of independent brands. In the parallel LED industry of foundry and independent brands, the chip packaging field in the upper and middle reaches is driven by technology and innovation; in the downstream lighting application field, brands and channels are often the core competitiveness of enterprises. As an LED foundry enterprise with neither technology nor brand and channel, it can only survive by meager processing profit, which is not conducive to the long-term development of the company. In the future, the LED lighting industry will be the world of brands. It is difficult for a simple foundry to have a large development space. Establishing a self-owned brand is the direction of LED foundry transformation. Yuan Yanping, president of Shenzhen Lemei Optoelectronics, bluntly said that enterprises must take the road of independent brands in order to develop in the long run, because foundry means that the vitality of enterprises is in the hands of others. Brand operation and channel construction require strong economic strength, which makes many foundry companies look forward to, but independent brands and foundries have become the first choice for transformation and upgrading of foundry enterprises. The process of transformation and upgrading of foundry enterprises, that is, the process of expanding the scope of their value chain activities on the basis of continuous upgrading of core capabilities of foundry enterprises. Lin Jiliang, general manager of the Mulinsen Lighting Marketing Center, said that in the past two years, the production capacity of Mulinsen's foundry products has increased rapidly, and OEM/ODM has become one of the company's main businesses. The company will adhere to the principle of large-scale production and further strengthen its own research and development and production capacity. In 2014, our goal was to occupy half of our own branded products and OEM products. The LED business of Sunlight Lighting, a domestic lighting manufacturer, is also parallel to the realization of OEM and independent brands. Its 2013 annual results show that the company's LED revenue structure is 52 for Philips OEM, 30 for other OEMs, and its own brand is about 15-20; The gross profit margin of OEM is relatively low, and the gross profit margin of independent brands is relatively high, with an average difference of 8. The development strategy of Sunshine Lighting is transformed from OEM to OEM and independent brand, and the expansion of independent brand business is strengthened. In the early stage of enterprise development, OEMs often become the only way for LED companies to establish their own brands, accumulating a certain amount of capital, technology and market foundation for enterprises. Li Xiaoping, general manager of Zhongshan Auman Technology Lighting, said that the OEM for well-known lighting brands not only enhances the company's technology research and development, global competition awareness, but also enhances itself in terms of expanding production capacity, controlling costs, improving quality, and controlling operational efficiency. Management level. Fang Haiming, deputy general manager of Shenzhen Duofuo New Energy Technology Co., Ltd. also said that the OEM business can go hand in hand with the independent brands. After relying on the OEM business to become bigger and stronger, the company will establish its own brand. The manufacturing capacity and quality of the company are better. It can quickly occupy some markets.