With the rapid development of LED lighting technology, the effect of energy saving and emission reduction is obvious, its cost is rapidly declining, and the permeability rate is continuously increasing. The corresponding market scale is gradually expanding. According to the latest research report of the LED Research Center of the State Consulting, the lighting class packaging and LED lighting market outlook "shows that the size of the LED lighting market has gradually increased from 2018 to 2023. The LED lighting market is expected to reach 56.6 billion U.S. dollars in 2023, and the estimated CAGR is 9 % from 2018 to 2023.
Although the lighting market is still expanding, it is well known that the lighting market has become a "bloody Red Sea," and the market competition has become increasingly brutal. The "price war" among lighting companies has entered daydream and profits have become increasingly weak. Many LED lighting companies are lamenting that "life is not easy."
In the face of the intensified competition in the domestic market and the ever-shrinking profit space, lighting companies have turned their attention to overseas markets and expect to "go out" to find new opportunities and new markets for the development of enterprises.
The traditional mode of entering the international market is divided into export entry mode, contract entry mode and investment entry mode. In the past, the mode of Chinese lighting companies going out relied more on export mode. In recent years, the investment entry mode has gradually become a new trend. In 2019, how will Chinese lighting companies go out?
LEDINSED specifically combed five more representative Chinese lighting companies: Leishizhaoming, Chen Mulinsen, Op Lighting, Foshan Lighting, and Chen Yishan. They conducted an inventory of their internationalization strategies and analyzed their exit strategies. For the expectation of going abroad to provide reference enterprises.
Sunshine Lighting: Take a boat to sea
Since its establishment, Sunshine Lighting has been focusing on overseas export business, selling lighting products for internationally renowned lighting companies, overseas lighting wholesalers, and overseas chain terminal supermarkets.
According to its annual report for 2017, the current share of sunlight lighting in the main markets is: 42.30 in Europe, 20.42 in North America, 15.86 in China, 13.30 in Asia, 2.82 in Latin America, 3.32 in Oceania, and 1.98 in Africa. In terms of export data, exports from Europe and North America have accounted for 62.72 % of their operating income. The European and North American markets grew 30.91 % and 15.53 % respectively, respectively, which is the main reason for the growth in their performance.
In general, the business focus of sunshine lighting is mainly overseas. Through the "big ships" such as Philips and Osram, sunlight lighting has been successfully "out to sea", and product quality and manufacturing processes have been improved to become a veritable lighting industry "Foxconn".
Since the OEM model is prone to development bottlenecks, in 2007 the company proposed that it must get rid of the OEM mode of operation and unswervingly change to the OEM mode of operation and the independent market.
To this end, the company has now engaged in overseas sales operations in Belgium, Germany, the United States, France, Denmark, Canada, Australia, Hong Kong, etc., and has actively explored the international market to achieve the sale of its own brand products.
Leishizhaoming: Buy a boat and go to sea
As a well-known lighting brand in China, Leishizhaoming, while developing the domestic market, is also sparing no effort to open up overseas markets.
In terms of overseas channel development, Leishizhaoming focused on channel development and project breakthroughs, focusing on Southeast Asia and other developing countries and the Middle East Gulf countries. At the same time, in order to increase overseas sales, Leishizhaoming expanded its sales channels to the North American market.
In 2018, Leishizhaoming successively acquired Hong Kong Weilanxin Trading Co., Ltd. and Yida(Hong Kong) Optoelectronics Technology Co., Ltd. to accelerate the transition from a manufacturing company to a channel company.
According to its annual report for 2017, overseas sales reached 1.252 billion yuan, an increase of 6.5 % over the previous year.
Op Lighting: Shipbuilding to the Sea
Op lighting, which is dominated by the domestic market, has more than 90 % of its income from domestic sources, and overseas markets account for less than 10 %. With the gradual saturation of the domestic market, Op Lighting has increased the development of overseas markets in recent years.
The fragmentation of the global lighting market is obvious. When expanding overseas, companies choosing to acquire local lighting brands will be a very economical way to enter the local market. The rise of Philips and OSRAM was also a big merger to achieve the subsequent globalization. However, Op is determined to build its own brand, chose to fight hard, fighting a way.
Op generally operates locally overseas, expanding its business channels by recruiting local personnel and forming local teams. At the same time, through the contractual entry mode, mainly through overseas exhibitions, network inquiries and field visits to target countries and other ways to build their own dealer networks overseas, using the distribution mode to expand their own brands.
For the choice of product exporting countries, Puzhaoming mainly chose emerging markets such as the Middle East and India, and set up subsidiaries in overseas key regions such as South Africa, Thailand, India, Dubai, and Europe for international market development.
According to its annual report for 2017, overseas sales reached 600 million yuan, an increase of 49 % over the previous year.
Foshan Lighting: Sailing to the Sea
As an old brand lighting enterprise in China, Foshan Lighting has experienced more than 60 years of development and changes in the industry and has great influence in the domestic market. In recent years, Foshan Lighting has made great efforts in the development and layout of overseas markets.
For developed markets such as Europe and the United States, Foshan Lighting attaches great importance to the establishment of FSL Europe GmbH and other companies to carry out exclusive regional business development. At the same time, it began to target emerging markets in South America, Southeast Asia, the Middle East, and Arabia and gradually advanced towards the goal of "World Lantern King".
According to its annual report for 2017, export accounted for 39.18 % of its operating revenue, an increase of 2.98 percentage points from 36.2 % in 2016. The proportion of overseas business has increased significantly, and the company's own brand sales revenue has increased by 37 %.
In the future, FSL independent brands will continue to make efforts in brand promotion, channel construction and product development, further improve the popularity and reputation of FSL brands overseas, continuously improve the distribution of overseas channels, and develop different products for different regional markets.
No Chinese have ever installed several FSL bulbs or lamps in their homes. The influence of Foshan lighting brands for more than 60 years has already infiltrated overseas markets with the logistics of the global Chinese world, waiting for the right time to reap the fruits. Now Foshan Lighting has realized that its brand in the overseas market huge potential, what is missing is to hang the cloud directly to the sea.
Mulinsen: Buy an aircraft carrier and go to sea
Mulinsen was originally a packaging company that focused on lighting LEDs and entered the downstream lighting industry under the general trend of the rise of LED lighting.
In recent years, Mulinsen has actively deployed the global lighting market. Through the merger and acquisition of Dahe, it has greatly increased the company's competitiveness and market share in the international market. This is a typical investment entry model. Through the acquisition of aircraft carrier-class companies in the lighting industry, Langdewansi and Mulinsen have stepped up to become leaders in the global lighting industry. Overseas markets have become Mulinsen's largest source of income growth.
According to its annual report for 2017, overseas business accounts for only 14.25 % of its total operating income, an increase of 4.65 percentage points from 9.60 % in 2016, and the proportion of overseas business has increased significantly.
This ambition was particularly evident in 2017, when Mulinsen bought the Osram General Lighting business. With the advantages of LEDVANCE's "aircraft carrier" channels, brands, and technologies, as well as the huge sales channels covering about 150 countries, Mulinsen has greatly opened up the company's seaport and has been able to quickly increase overseas market share and enhance brand image.
In the 2018 semi-annual report, after Mulinsen merged Langdewansi's financial data, Zhanmulinsen's business revenue from overseas business accounted for 48.81 % of its "half of the country". In November, Mulinsen merged its lighting brand Forest Light with LEDVANCE to further integrate overseas lighting business. It is expected that in 2018, Mulinsen's overseas income will exceed 50 % and he will successfully enter the international market.
Strategies for access to international markets
With the domestic market becoming increasingly saturated, LED enterprises "go out" has become the general trend, and major companies are also actively deploying internationalization strategies. From the perspective of overseas markets, North America and Europe are still the main export destinations of Chinese LEDs, and entering the European and American markets, product patents are unwinnable barriers. With the deepening of the "Belt and Road" initiative, the demand for emerging markets has continued to increase, making LED companies more diversified in their overseas layout.
In particular, since the escalation of the Sino-U.S. trade conflict in September 2018, the LED lighting industry has also become the target of taxation in the United States, and Chinese lighting companies have become the first victims of tariffs. Lighting companies, which depend on the U.S. market, are under intense price pressure as the US imposes a 10 % tariff on Chinese lighting products. Bypassing tariff barriers has become one of the driving forces for lighting companies to go out.
"Go out" for domestic LED enterprises, is a topic worth in-depth discussion, and its methods and methods are also diversified. In order to quickly enter the international market, multinational mergers and acquisitions provide a "shortcut". Through mergers and acquisitions, companies can quickly obtain overseas patents, related production technologies and customer groups, and quickly expand market share.
Even if most companies can not buy Mulinsen directly as big as Langdewansi, the acquisition of some small but beautiful targets is a compromise.
In addition to mergers and acquisitions, companies can also set up subsidiaries or factories overseas to layout local market segments; Or enter the local market through joint efforts with overseas local companies; Or use its own advantages to vigorously develop overseas lighting markets, strengthen overseas sales forces, innovate overseas sales models, and launch different products for different markets.
"Eight Immortals cross the sea and show their powers. When formulating internationalization strategies, companies should combine their own actual conditions and market requirements. Based on the current situation, they should focus on the long-term, choose a development path suitable for the company, plan and prepare ahead of time, and target their goals so as to be able to develop overseas markets.