Decoding the Development Status of the LED Lighting Market in 2011

　　Compared to the noise of 2010, the LED lighting market in 2011 finally became much more stable. At least some companies no longer tell blatant lies, some related media no longer exaggerate their reports, and some exhibitions no longer peddle inferior goods under false pretenses. This is a good thing, and it is also the result of nearly 400 LED companies in Shenzhen "going over."

　　Everything in life only becomes deeply introspected when one has been hurt. Another year has come to an end, and it is time to settle accounts. LED lighting companies have begun to feel their pockets and "reflect." We all know that LED lighting companies have not had an easy time this year: foreign customers' demands are getting higher and higher, the domestic market has not yet awakened, distribution channels are in full swing and laid out, but sales are flat, and the price of LEDs is declining, with profits getting smaller and smaller. As a result, some irresponsible bosses have simply walked away.

　　Admittedly, there are still some small mischief-making companies in the market. They employ various methods without considering the consequences, trying to use price advantages to knock down batch after batch of companies in the market, especially some small packaging companies. But how long can such companies survive? The current LED lighting field is by no means an era where "small players" rule! At least for quite a long time in the future, LED packaging will still be dominated by large companies, and it will become more and more concentrated. As for LED lighting applications, there are simply no domestic companies with very large production volumes, let alone any well-known brands. Some down-to-earth small companies, as long as they survive these "hard-to-look-back-on" days, will eventually see their fortunes turn.

　　The 2011 light source market: Light source prices went through several fluctuations; as of now, light source prices have still seen a drop of around 30%. Market capacity is expanding, but more than 60% of packaging companies are not making money. There are two main reasons: first, small packaging companies fight on price, product quality cannot be guaranteed, the customer base is unstable, orders are sporadic, production costs cannot be effectively controlled, and most companies in the LED packaging field are small enterprises. Second, as more companies engage in the packaging industry, production capacity exceeds demand, directly leading to a drop in prices. When customers see such a situation, they adopt a wait-and-see attitude, leading some companies to stockpile goods, or even experience cash flow problems, which in turn leads to selling at low prices or bankruptcy.

　　However, the sales of almost all large packaging companies are on the rise, with some companies seeing sales growth of more than 60%. Although the price of light sources has declined, sales have increased, leading to a substantial rise in production. Coupled with stable customers, this has effectively controlled production costs and achieved a good balance in terms of profit.

　　Summary: In the 2011 packaging field, large companies can be all smiles, while small companies are still feeling their way forward cautiously.

　　The 2011 finished lamp market: foreign markets remain the mainstay. Commercial lighting developed faster than residential lighting. Market sales were roughly as follows: the market was sluggish from January to March, with a slight recovery in April, a slight contraction in May, market share rose in July, and has remained relatively stable from August to now.

　　In 2011, some companies began to focus on deploying nationwide markets, but almost none escaped the same ending: sales of finished luminaires in the domestic market were unsatisfactory. In the finished-product application segment, a three-way pattern is unfolding: packaging-powerful companies linking to LED lighting, traditional lighting extending into LED lighting, and some small and medium-sized LED lighting application companies. The three parties each have their own advantages. Packaging-powerful companies have strong financial strength, accompanying LED finished products as they mature in the market; traditional lighting companies have inherent channel advantages, and once their products mature, their sales networks immediately cover the entire country; while SMEs that focus only on applications have also secured their survival with good export shares.

Summary: A close call, but still walking on thin ice. The eliminated companies were too careless.

What LED lighting enterprises need to pay attention to in the future is capital and market.

From the current boom in the financial industry in China and even around the world, we can see how financing is a required course for many enterprises, indicating how important the capital chain is to a company. LED lighting is a new and immature product that requires strong financial support until it is widely applied.

In 2011, the most outstanding performance of LED applications was that many companies began to lay out the market. Although there are risks, preparing in advance is the most important task for the LED lighting industry at present. Targeting the right market and doing it thoroughly is much better than a cursory glance. There are many local brands in China, but very few that are well-known nationwide. But how many Chinese LED companies have that confidence and strength?

The LED reshuffle campaign will continue for some time to come, and the market will be further purified.

The market capacity for finished luminaires and light source products will continue to expand, but prices will keep declining—though the rate of decline will be smaller compared to this year. As the technology of finished luminaires gradually matures, public awareness of LED lighting will steadily increase, and with prices slowly dropping, the market outlook for LED lighting remains quite promising. Currently, many shopping malls and supermarkets have switched to LED T8 tubes, while some clothing specialty stores have also begun using LED ceiling lights to replace traditional halogen lamps. It can be seen that commercial lighting should be the breakthrough point for LED lighting enterprises in indoor lighting. Especially LED T8 tubes and LED ceiling lights—as long as the technology is further innovated and prices recede slightly, the market will be ignited.