In October, the "Duo Duoli incident" seemed to be the trigger for the detonation of the domestic LED industry crisis. For a time, LED has become the focus of domestic media.
According to the Gaogong LED reporter, LED display companies have large capital investment. A project needs more than 100,000 yuan, millions, or even tens of millions of inputs, and the withdrawal of funds sometimes takes several months. Because SMEs do not have strong financial support, they use the supplier's money for projects. Once the project profits are low, they cannot fill the supplier's debt. Shanmu Display General Manager Shi Guoguang admitted to the Gaogong LED reporter that at present, LED companies have more short-term behavior, and the government has also exalted LED too much and has buried many risks.
On the other hand, due to the competition in the industry, some companies have kept prices low. At present, the gross profit of domestic LED display companies is generally maintained at 15-20%. Shi Guoguang said: "Now the profits of LED display are already in the end, and enterprises must maintain at least 30% of gross profit to maintain normal operation."
At present, Shenzhen has thousands of small and medium-sized LED companies. Companies like Duo Duoli and Bolent are just the tip of the iceberg. Unlike last year's explosive growth in business performance, sales of LED display companies this year showed an increase - a sharp drop - a flat trend. In the past, the hot LED display industry, cold winter has come, especially small and medium-sized display companies are beginning to face serious pressure to survive.
Zero down payment is not as expected
In July 2010, Absen Optoelectronics Co., Ltd. (hereinafter abbreviated as “Absenâ€) took the lead in launching the “zero down payment†model in the domestic display industry, which once set off a wave of momentum in the industry. But recently, according to field surveys by senior LED reporters, this model has many risks, and it has had little success in the industry for more than a year. Some display company's “zero down payment†model sales accounted for only 2% of total sales. -3%.
According to the reporter's understanding, LED displays belong to electronic engineering products and are different from ordinary consumer goods. According to Ren Yonghong, deputy general manager of Absen, the zero down payment is for the customer to look at the screen first, sign the contract again, and wait for the customer to confirm the receipt of the goods. At the same time, customers can choose to return within the next 7 days.
According to industry sources, this zero down payment model also embeds many risks. Many industry insiders frankly stated that the development of LED display industry is mature and the market competition is very fierce. Zero down payment is only a means of marketing.
First of all, zero down payment is targeted at a small number of customer groups, not all customers can use this model; Second, the use of zero down payment model must increase product prices to ensure operating costs. Therefore, not only does the customer need to have a good reputation, but it also needs strong financial strength to support it.
According to the reporter's understanding, the domestic zero-down payment model is generally a government project, but it is generally large enterprises and large consortia abroad. However, this model poses a challenge to the company's customer research capabilities. As a production-oriented enterprise, many people questioned the strength of the company's customer research.
Not only is the challenge to research strength, but the zero down payment model also imposes higher requirements on product quality. “If the quality is not good, then the company will have to pay for the screen, because in the next certain period, if the quality is not good, the customer can terminate the payment at any time,†according to an industry source told reporters, he believes that the zero down payment model The EMC model used by early LED street lighting companies is similar.
In the EMC model, the company bears the installation cost, and the user saves the saved electricity fee as an installment of the product cost. In the past two years, due to the prevailing quality of LED street lamps in China, many companies that adopted this model suffered losses and ended in disastrous defeat. Similarly, zero down payment also requires companies to pay for product quality. According to a survey conducted by the High-tech LED Industry Research Institute, the current domestic LED display still has a lot of problems such as the black screen of Huaping.
Different from the EMC model, the risk of zero down payment is also reflected in "tailored". Because the current terminal engineering LED display screens are tailor-made, because customers control the initiative, once the return, then the display company will pay for this tailor-made screen, and on the other hand, the display company is very It is difficult to find customers with the same requirements in a short time.
According to the reporter's understanding, zero down payment put forward higher requirements for the company's financial strength and inventory management. Ren Yonghong said in an interview with reporters: “Zero down payment also increases the challenges within our company, and we need to speed up the shipping and production cycle. This is a big challenge for our internal management.†According to a brokerage investment banking department Said: "Zero down payment model because it can raise the company's display gross profit, so many screen companies ready to attack the IPO market is often bite the bullet and risk to do it."
According to the Gaogong LED reporter, LED display companies have large capital investment. A project needs more than 100,000 yuan, millions, or even tens of millions of inputs, and the withdrawal of funds sometimes takes several months. Because SMEs do not have strong financial support, they use the supplier's money for projects. Once the project profits are low, they cannot fill the supplier's debt. Shanmu Display General Manager Shi Guoguang admitted to the Gaogong LED reporter that at present, LED companies have more short-term behavior, and the government has also exalted LED too much and has buried many risks.
On the other hand, due to the competition in the industry, some companies have kept prices low. At present, the gross profit of domestic LED display companies is generally maintained at 15-20%. Shi Guoguang said: "Now the profits of LED display are already in the end, and enterprises must maintain at least 30% of gross profit to maintain normal operation."
At present, Shenzhen has thousands of small and medium-sized LED companies. Companies like Duo Duoli and Bolent are just the tip of the iceberg. Unlike last year's explosive growth in business performance, sales of LED display companies this year showed an increase - a sharp drop - a flat trend. In the past, the hot LED display industry, cold winter has come, especially small and medium-sized display companies are beginning to face serious pressure to survive.
Zero down payment is not as expected
In July 2010, Absen Optoelectronics Co., Ltd. (hereinafter abbreviated as “Absenâ€) took the lead in launching the “zero down payment†model in the domestic display industry, which once set off a wave of momentum in the industry. But recently, according to field surveys by senior LED reporters, this model has many risks, and it has had little success in the industry for more than a year. Some display company's “zero down payment†model sales accounted for only 2% of total sales. -3%.
According to the reporter's understanding, LED displays belong to electronic engineering products and are different from ordinary consumer goods. According to Ren Yonghong, deputy general manager of Absen, the zero down payment is for the customer to look at the screen first, sign the contract again, and wait for the customer to confirm the receipt of the goods. At the same time, customers can choose to return within the next 7 days.
According to industry sources, this zero down payment model also embeds many risks. Many industry insiders frankly stated that the development of LED display industry is mature and the market competition is very fierce. Zero down payment is only a means of marketing.
First of all, zero down payment is targeted at a small number of customer groups, not all customers can use this model; Second, the use of zero down payment model must increase product prices to ensure operating costs. Therefore, not only does the customer need to have a good reputation, but it also needs strong financial strength to support it.
According to the reporter's understanding, the domestic zero-down payment model is generally a government project, but it is generally large enterprises and large consortia abroad. However, this model poses a challenge to the company's customer research capabilities. As a production-oriented enterprise, many people questioned the strength of the company's customer research.
Not only is the challenge to research strength, but the zero down payment model also imposes higher requirements on product quality. “If the quality is not good, then the company will have to pay for the screen, because in the next certain period, if the quality is not good, the customer can terminate the payment at any time,†according to an industry source told reporters, he believes that the zero down payment model The EMC model used by early LED street lighting companies is similar.
In the EMC model, the company bears the installation cost, and the user saves the saved electricity fee as an installment of the product cost. In the past two years, due to the prevailing quality of LED street lamps in China, many companies that adopted this model suffered losses and ended in disastrous defeat. Similarly, zero down payment also requires companies to pay for product quality. According to a survey conducted by the High-tech LED Industry Research Institute, the current domestic LED display still has a lot of problems such as the black screen of Huaping.
Different from the EMC model, the risk of zero down payment is also reflected in "tailored". Because the current terminal engineering LED display screens are tailor-made, because customers control the initiative, once the return, then the display company will pay for this tailor-made screen, and on the other hand, the display company is very It is difficult to find customers with the same requirements in a short time.
According to the reporter's understanding, zero down payment put forward higher requirements for the company's financial strength and inventory management. Ren Yonghong said in an interview with reporters: “Zero down payment also increases the challenges within our company, and we need to speed up the shipping and production cycle. This is a big challenge for our internal management.†According to a brokerage investment banking department Said: "Zero down payment model because it can raise the company's display gross profit, so many screen companies ready to attack the IPO market is often bite the bullet and risk to do it."
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