Under The Double Pressure Of Price War And Trade War, Why Are LED Screen Companies So Anxious?

- Jun 12, 2019-

The LED display industry entered 2019, and the "price war" and "smuggle" for several years, so far there is no sign of ending the easing, but it is showing an increasingly strong situation. LED screen enterprises use the price of bottoming products to seize the market, set off a low-cost wave of the industry, a "grab", starting with the compression of product profit space as a means of marketing, resulting in a number of LED display companies Miserable. In April last year, U.S. Ultravision Technologies filed a 337 investigation application, accusing China's LED screen companies of infringing patent rights on certain LED display screens in the United States, requesting the issuance of limited exclusion orders and prohibition orders, and leaking and falling nights, May 6th. The United States announced that it will increase tariffs on China, marking the official start of the Sino-US trade war. The outward-looking Chinese LED display industry is also inevitably affected. The price war is uninterrupted, and the trade war has added pressure, making the LED display industry worse. How do LED screen companies get out of the woods?


Price wars, trade wars continue to hit LED screen enterprises lost again


As the saying goes, “Channel is king”, doing business and making products all understand the importance of channels. Regardless of engineering channels or distribution channels, some enterprises cultivate and establish their own channel systems through ten years. Some enterprises want to With its own strong capital power to carry out the "takenism" siege, the price war has been buried. With the continuous development of LED display technology, the industry has shown signs of overcapacity in recent years, due to the upstream The expansion of chips and lamp beads has further stimulated the expansion of production capacity of LED display companies. The blind optimism of the market and the divergence from the market demand led to the hoarding of LED screen products. In order to go to stock, LED screen enterprises can only cut prices and clear sales. In order to reduce the loss of enterprises, this will give birth to the price war in the LED display industry. After a short period of rapid profit-making, the side effects of the "price war" will gradually appear. The price war caused by several companies because of competition for the market can be called "the god fight, the mortal is injured", master the pricing power and have the brand advantage. Once large enterprises enter the channel of price cuts, many small and medium-sized enterprises will have to be forced into it, and the domino effect will break out. In the long run, most SMEs can't stand the price war, or they will face the risk of bankruptcy. To promote the industry to reshuffle.


In the past, when the competition in the domestic industry market intensified, the huge foreign market will become the target of many enterprises. Adjusting the strategy and actively exploring overseas markets have become the only magic weapon to cope with the intensified competition in the domestic market. Nowadays, the domestic price war is raging, the overseas market has been intercepted, and the LED screen enterprises have once again lost their minds and become anxious.


Order reduction is just an illusion


Channel type LED display enterprises are in the midst of a deep price hike in the industry. The project type LED screen enterprises have experienced a large reduction in project engineering volume. Does the emergence of this situation mean that the market is seeking weakness? In fact, this is not the case. This is just an illusion. In the current fierce market competition, the advantages of brand enterprises will gradually emerge, and enterprises that rely solely on capacity to win will have a huge impact here. The order quantity of engineering type LED screen enterprises will decrease. The root cause is the sinking of the brand enterprise channel. With the improvement of China's LED display technology and production technology, end users' awareness of LED display has gradually deepened, which has led to the continuous expansion of various application scenarios, the rapid increase in demand for LED displays, and the rapid spread from first-tier cities. To the second, third and fourth line cities. In order to open the second, third and fourth tier cities, LED display brand enterprises, seize the market development opportunities, sink the channels, start to implement the channel distribution model, develop provincial agents, municipal agents, and achieve rapid product output; optimize dealers, The agent's local network resources, to achieve rapid response services, provide a strong localized after-sales service. Engineering type LED display enterprises, in the past, because of the lack of product channel access, relying on their own engineering solutions, they will get a lot of market orders, and users can only find engineering type LED display because they can't buy suitable products in the local area. Screen companies place orders, but in the current situation of brand enterprise channels sinking, due to the distance, local orders are not as fast as regional agents, and most of the scattered orders around the company are concentrated in the hands of corporate channel operators, resulting in engineering The amount of project orders for type LED display companies has been greatly reduced.


On the surface, the reduction of order quantity of engineering type LED screen enterprises is the inevitable development of the industry. In fact, it is the result of more and more centralized industry under the pressure of price war. Enterprises that are blinded by the reduction in orders will lose confidence in the market if they cannot see the essence. However, the current LED display market is undergoing diversified development due to the active development of the entertainment industry and the diversity of visual presentation requirements. The high-end custom screen market is moving towards civilians. The demand for segment rental screens, special-shaped screens, and ultra-high-definition displays has increased year by year, while the horizontal market has spread to large-scale 234 cities, and the overall development of the industry has moved toward multiple patterns. The "cake" of the LED display is still expanding, and the LED screen enterprise can not share a piece of cake, depending on whether the enterprise can see the essence of the development of the industry.


Price war and trade war double oppression LED screen enterprises need to take care of themselves


Under the tremendous pressure of price wars, it is a wise road for LED screen enterprises to switch to overseas. However, the start of the trade war has caused the LED screen enterprises to retreat. LED screen enterprises suffering from double pressure are anxious. Although the development of the enterprise has entered a stalemate, there are still sunny roads to go. Review the situation, identify the industry dynamics, adjust the strategic deployment, you can get out of the crisis.


Adjust the product structure and take the high-end customized route. Due to the low barriers to entry in the country, the problem of homogenization of conventional display screens is very serious. Therefore, in addition to the price, the conventional screens do not have any outstanding advantages. It is advisable to continue the “price war” strategy to increase market share. In terms of high-end custom screens, the industry has just emerged, demand is strong, and the market can be expected. Enterprises may start with high-end customized displays, deploy relevant development plans, increase corporate profits, and earn a life for the survival of enterprises.


The combination of quality and brand creates a reputation display company. In recent years, domestic consumption levels have risen, and consumers are increasingly pursuing taste, that is, the dual guarantee of quality and brand. The combination of quality and brand creates a strong brand effect, and customers naturally come from brand to brand. The same is true for the LED display industry. While optimizing product quality, we will create a brand image that is deeply rooted in people's hearts through various channels and create industry reputation.


External demand is cut and domestic demand can be expanded. In the past two years, the domestic entertainment industry has developed rapidly, and the demand for LED stage rental screens has risen rapidly. However, the current stage rental screen is still unable to meet the market demand, and the stage rental screen market is undecided. Enterprises can start with a strong, layout stage rental screen research and development plan to seize the market. At the same time, this year, the state and eight provinces and municipalities have continuously issued ultra-high-definition video industry policies to support the development of the ultra-high-definition video industry. Ultra-high-definition display screens are approaching, LED screen enterprises can rely on policies and their own research and development technology, turned into a shackle, and skyrocketed 90,000 miles.


More ways, innovation is fundamental. Whether it is high-end customization or the development of ultra-high-screen display, it is inseparable from technological innovation. Only the renewal can be replaced, in order to promote the development of the industry, and the development of the industry can stimulate new industry demand. Therefore, innovation is the most fundamental way to break away from price wars and trade wars.


Conclusion:


The price war is not smooth, the trade war is on again, and the pressure is surging, which is directly pushing the LED display industry. Seemingly hopeless, but in fact the road is in front, LED screen companies only need to turn a direction. High-end personalization, brand effect, ultra-high-definition display, stage rental screen, etc., many "panic" roads can be chosen, LED screen enterprises to pick up the path, you can pull out the double wave of tapping.