"Factory Incubation Program" Cracks the LED Lighting Industry Dilemma
This year's government work report listed energy conservation and emission reduction as one of the priorities, emphasizing the need to continue the tough and protracted battle against energy waste and pollution in 2012. Against this backdrop, how to address the many dilemmas facing the LED lighting industry—including inconsistent product quality, missing standards, and difficulties in popularization and promotion—has become a topic the industry must confront.
Recently, Dongguan Kingsun Optoelectronics Co., Ltd. has launched its blockbuster "Factory Incubation Program," sharing more than a decade of successful exploration in the LED lighting industry—including its technology R&D and design platform, large-scale production capabilities, business model, and IPO operating experience—with its partners. It provides "service packages" tailored to different needs and "one-stop" services covering the entire process from factory construction, production operations, patented technologies, marketing, capital operations, to brand building, recreating a batch of "Kingsun model" factories nationwide in the form of paid services.
Industry insiders analyze that this move by Kingsun Optoelectronics will effectively consolidate the domestic LED industry and accelerate the establishment of LED industry standards. When that day comes, the national LED lighting industry will rise with a brand-new look, actively seizing LED lighting markets both at home and abroad.
Regulate Market Investment, Establish a New Look for the LED Lighting Industry
As is well known, the domestic LED lighting industry has experienced explosive growth in the past two years. However, in this fervent wave of development, signs of overheated investment in the LED lighting industry have become evident, while vicious competition within the industry has also begun to emerge. Wu Wenbin, General Manager of Guangzhou Guangri Electrical Equipment Co., Ltd., stated that LED lighting products of the same power cost 3-4 times more than traditional lighting products, yet a large number of shoddily-made LED lighting products are grabbing market share at low prices, significantly eroding consumer trust in LED lighting products.
Industry experts believe that to promote LED lighting products, rectifying the industry's atmosphere, regulating the product market, and rebuilding consumer trust in the LED lighting industry have become urgent priorities.
"Providing partners with core modules, sharing the supply chain, and offering comprehensive support covering production management, technology R&D, project testing, project application, patent licensing, and marketing strategies" constitutes the core content of Dongguan Kengshang Optoelectronics' "Factory Incubation Plan." The person in charge at Kengshang Optoelectronics stated: "Kengshang Optoelectronics launched this plan in the hope that companies engaging in LED lighting can draw on Kengshang's successful exploration experience, achieve better development on this basis, and avoid detours. In this way, it will no longer be difficult for these enterprises to have a complete production chain; investments can be planned reasonably, and product quality can be guaranteed. Only when the industry works together, shares experience, and keeps improving can China's LED lighting industry develop faster and reach the international advanced level."
Industry insiders say that the promotion of this plan will reduce the phenomenon of blind investment and vicious competition that exist in the LED lighting industry. The LED lighting industry will establish a brand-new image, which will be more conducive to the popularization of LED lighting products in the domestic market.
Establishing High Standards, Promoting a Healthy Cycle in the LED Industry
Why does the domestic LED lighting industry frequently witness company closures and product quality problems? The root cause lies in the lack of authoritative and widely recognized industry standards in China's LED lighting industry. LED lighting has a 20-year development history in China, yet the country still lacks national standards broadly recognized by the industry. According to industry insiders, the absence of standards has caused a "Gresham's law" phenomenon in the current domestic LED lighting market, where companies producing high-end LED lighting products actually end up at a disadvantage. This is highly detrimental to the healthy and sustainable development of the LED lighting industry.
As a major province in China's LED industry, Guangdong has always been at the forefront of exploring the development of the LED lighting industry. In 2011, the Guangdong Provincial Bureau of Quality Supervision and the Guangdong Provincial Department of Science and Technology jointly released Asia's first "LED Lighting Industry Standard System Planning and Roadmap". The "LED Lighting Industry Standard System Planning and Roadmap" proposed that within 5 years, Guangdong Province should take the lead in establishing more than 130 LED local standards, with "high starting points" for the standards.
To establish standards, especially high-starting-point standards, the overall level of the industry must first be elevated. A relevant person in charge at Kingsun Optoelectronics stated that, as one of the earlier companies to enter the LED lighting industry in China, Kingsun Optoelectronics has always been very concerned about the formulation of domestic LED lighting standards. The launch of the "Factory Incubation Plan" this time also hopes to promote Guangdong Province's pioneering establishment of local LED lighting standards. According to reports, on the one hand, Kingsun Optoelectronics will help domestic LED lighting companies enhance their own strength and level through resource sharing; on the other hand, Kingsun Optoelectronics will engage in non-profit technical cooperation with partner companies in areas such as research, formulation, use, and service of LED lighting technical standards, reaching industry consensus, thereby playing a role in promoting the formulation of high standards for the entire industry and facilitating the healthy development of the LED lighting industry.
Overcoming Difficulties, Illuminating the National LED Lighting Industry
According to the national roadmap for phasing out incandescent light bulbs, starting from October 1, 2012, China will gradually prohibit the import and sale of ordinary incandescent lighting bulbs in five phases according to wattage, marking the accelerated entry of China's lighting industry into the "energy-saving era" driven by policy. Recently, the government's hundred-billion procurement orders and related subsidy policies have also been introduced. However, the penetration speed of LED lighting products in the domestic market has not kept up with the pace of favorable policies. How to break through the development dilemma, seize market opportunities, promote the circular development of the industrial chain, and illuminate the development prospects of the national LED lighting industry is a question worth pondering in the industry.
Industry insiders say that, on one hand, breakthroughs can be sought in core LED technology research, integrating advantageous resources to reduce LED lighting product prices and promote the popularization of related products; on the other hand, the LED lighting industry involves multiple disciplines and fields such as new materials, equipment manufacturing, and electronic information, and more markets can be obtained by exploring new fields. "The 'Factory Incubation Plan' is designed to better unite relevant enterprises in the industry and gather various advantages to seize the LED lighting market," said the relevant person in charge of Kingsun Optoelectronics.
It is understood that as early as 2010, Kingsun Optoelectronics took the lead in launching the banner of price revolution. By building a complete intensive procurement and production system and large-scale mass production capabilities, it has promoted the popularization of "noble" products.
The relevant person in charge of Kingsun Optoelectronics said: "Having technical strength and resource integration advantages can form one's own competitive advantage, maintain and expand market share, thereby promoting the enterprise's own progress. This is the law of enterprise development. The 'Factory Incubation Plan' of Kingsun Optoelectronics is designed to unite enterprises, gather more advantages, and while promoting enterprise development, strengthen the overall strength of the national LED lighting industry, realizing the rise of the national LED lighting industry."