Hongyan initially invests 20 million for LED market distribution

On June 10 at 4:00 PM, the conference hall on the 5th floor of the Guangzhou Kairongdu International Hotel was packed. Yang Ying (female) from Shandong Hongpeng Building Materials Co., Ltd. stood up and signaled to a staff member nearby. "Order of 1 million!" At a Hongyan Lighting Industry Promotion Conference named "Smart Messenger of Light," the bustling discussions at the venue could not mask the excitement in Yang Ying's tone.

At that time, the China Import and Export Commodities Fair Exhibition Hall, not far away, was hosting the Guangzhou International Lighting Exhibition (hereinafter referred to as "Guzhan"). In the "Smart Lighting" themed exhibition area of Hangzhou Hongyan Electric, multimedia terminal devices such as audio, light and electrical were vividly demonstrating the performance of various LED lamps and the intelligent services provided in different scenarios.

A planned bright world of technological innovation and sharing, green civilization, and energy conservation and environmental protection is quietly taking shape on the map of China.

　　First phase: 20 million in free goods placement

　　Bold moves to establish LED market channels

　　This is Yang Ying's first time attending the Guangya Exhibition. Her connection with Hongyan dates back to 2010. Through a chance encounter, she came across Hongyan's plastic products and gained an initial understanding of the Hongyan brand. Later, in March 2011, after successfully cooperating with Linshang Bank, she began acting as an agent for Hongyan's lighting products. This successful collaboration turned her into a genuine businesswoman, and from then on there was no turning back. Today, she has become one of Hongyan Lighting's key distributors.

　　Yang Ying clearly came prepared for this year's exhibition. Her goal is very clear, aimed directly at the "20 Million Green Storm Plan".

　　According to information released earlier, Hongyan Electric will announce major product launch policies during the Guangya Exhibition. "This is Hongyan's second time participating in the 'Guangya Exhibition', and compared to last year, the performance should be more mature and more confident," said company president Wang Micheng. "In addition to the concentrated unveiling of 2012 new products, the ordering preferential policies will be officially announced at the LED industry promotion conference. Hongyan will mainly provide LED products totaling 20 million yuan, and distributors across the country will enjoy an unconditional 3-month free goods placement."

　　"Do we really not need to pay a single cent upfront?" "Are there specific requirements for distributors' credit qualifications?" "What is the later payment-collection policy?" ... The buzz around "Hongyan's 20-Million Free Distribution" continues to build during the Guangzhou International Lighting Exhibition.

　　According to Fang Ke, manager of the lighting marketing department, this distribution will select 300 quality distributors nationwide. Within three months, Hongyan will give each of them unconditional support, providing goods worth 50,000–100,000 yuan per distributor for sale. Once the contract period expires, any unsold goods may be returned unconditionally. "Distributors in major regions across the country hold a positive view on how this policy helps with market development, and enthusiasm for placing orders is generally very high," said Fang Ke.

　　Riding the Tailwind of Policy to Integrate Central State-Owned Enterprises and Local Resources

　　Hundred-Million Investment to Build a Large-Scale Strategic Emerging Industry

　　"The initial 20 million is just the first step in Hongyan's nationwide LED market rollout." What Wang Micheng has on his mind, however, is what comes next in the operation.

　　During the several days of the Guangzhou International Lighting Exhibition, he kept moving through the crowd, demonstrating the application of Hongyan smart lighting solutions to visitors and discussing regional market development strategies with channel customers. Since entering the LED industry in 2009, the Hongyan team has steadily advanced on this smoke-free "battlefield" of the market after more than three years of planning and development.

　　What is encouraging is the continuous tailwind of favorable policies. On May 30, the Executive Meeting of the State Council reviewed and approved in principle the "Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries," which clearly identified seven key strategic emerging industries including "energy conservation and environmental protection," with the LED lighting industry being targeted. Subsequently, the Hangzhou Municipal Government introduced the "Forty Articles" new policy to support the real economy, announcing funding support for fields including semiconductor lighting, with a maximum single grant of up to 10 million yuan.

　　The blueprint for moving forward seems increasingly clear. "One billion in three years is the goal I have set for Hongyan LED lighting." Regarding building Hongyan Lighting into a large-scale aircraft carrier within the industry, Wang Micheng already has a clear picture in mind.

　　In fact, what Hongyan has is more than just favorable conditions benefiting the industry. Let us go back to March 13. Beijing, the China Potevio Building. The moment when Hangzhou Mayor Shao Zhanwei and Xing Wei, Chairman of China Potevio Information Industry Co., Ltd., shook hands, the "marriage" between China Potevio and the Hangzhou Municipal Government officially began. For Hongyan Electric, the only major force developing the LED industry within the Potevio system, this signaled dual strategic support from the local government and central enterprise Potevio. According to the strategic cooperation agreement signed between the Hangzhou Municipal Government and China Potevio Group, the first fruits of this "marriage" were the establishment of the Hongyan Lin'an Energy-saving Lighting Industrial Base and the Smart Lighting Research Institute.

　　"Not only do I firmly believe in the brand value that Hongyan has accumulated over more than 30 years, but with a central-level enterprise like Potevio providing backing in capital, R&D, and market development, and now with the support and planning of local government policies, I am full of confidence in the future." This seems to represent the sentiments of a significant portion of dealers.

　　Production enterprises bear the risks to help nurture the market

　　Hongyan's "Share Growth" model benefits 200 channel distributors

　　In addition to this 100,000-yuan order enjoying special policy benefits, Yang Ying has an additional order plan of 900,000 yuan. The reason for such a "generous" move stems from her understanding of the Hongyan brand. It is reported that the goods she additionally ordered are already being actively prepared. This is a microcosm of the thousands of business partners of Hongyan Electric.

　　Over the years, Hongyan has taken a distinctive development path of "upgrading first, then transforming" by connecting the three industrial chains of electrical engineering, lighting, and smart technology, positioning the breakthrough in entering the LED industry, and striving to move towards intelligence and energy efficiency. Hongyan's own transformation and upgrading has also profoundly influenced its business partners who have weathered storms together over the past 30 years. "National policy direction is clear, and market potential remains considerable. I hope to grow together with Hongyan," said Yang Ying.

　　"The company's investment of 20 million yuan in stocking to benefit channel distributors is intended to maximize the mobilization of channel enthusiasm first," said Wang Micheng, President of Hongyan Electric. "To get consumers to accept the products, we must first get the channels to accept the products. This measure for distributors, on one hand, can help distributors undergo rapid transformation; on the other hand, Hongyan hopes to advance and retreat together with distributors and address more of their concerns."

　　In today's market where payment is made upon or even before delivery, many manufacturers would rather earn less or nothing than extend credit on consignment. Hongyan's "Green Storm Plan" seems to go against common industry practices. But in Wang Micheng's view, this seemingly generous move is a significant stroke in Hongyan's efforts to develop and cultivate the national LED market.

　　"Hongyan's dealers are never pressed to the brink. What we aim to do is enable our partners to make money without spending, or by spending very little, or even by using Hongyan's investment." Symbiotic growth, generous sharing, and continuing together on a higher platform — this is the business cooperation model that Hongyan conveys and practices. #p#分页标题#e#