LED tube replacement market enters fast lane, price decline narrows

After a round of "9.9 yuan" price war last year, the LED tube market has become somewhat calm.

Recently, UL updated the LED lamp technology resolution for direct replacement of fluorescent tubes. This latest technical resolution replaces the previous version issued on February 20, 2015, and is scheduled to be officially incorporated into UL1993 at the end of this year (self-ballasted lights and Adapter) standard.

The latest technology resolution has broken through the technical bottleneck of the previous Type A LED tube entering the North American market in several aspects, and it is expected that UL can help more LED manufacturers to quickly enter the Type A LED tube into the North American market, directly replacing the North American market. Double-ended straight (T12, T10, T8, T5, etc.) lamps, U-shaped tubes, single-ended CFL tubes and ring tubes.

The contents of this latest technical resolution are updated as follows:

First, the test uses a constant current power supply method to replace the original constant voltage power supply mode, and cancels the original current limit;

Second, if the Type A LED tube replaces only the T5 fluorescent tube used for the electronic ballast, the DC component between the LED tube and the pin of the lamp cap is not required;

Third, if the LED tube adopts a metal lamp head or has other contactable non-current-carrying metal parts, the clearance requirement of the lamp pin to the metal parts is lower than before;

Fourth, the component failure test is changed from 5 seconds after the reading to 5 minutes after reading;

Fifth, the test method for cathode impedance is clarified.

Behind the revision of the market access standards for LED lamps is the rapid increase in market demand. According to relevant data, since 2016, the export volume of LED tubes has been rising rapidly.

LED lamps have always been of high importance in commercial lighting, especially in the supermarkets, offices, and underground parking lots of affordable stores. With the rapid evolution of design solutions, the price/performance advantage is faster than other lamps. Upgrade.

The data shows that the lamp has become the largest export item after bulbs in the first half of this year. The export volume in the first half of this year was 433 million US dollars, up 21.7% year-on-year. The United States is still the largest export destination country, reaching 104 million US dollars. The proportion is 24.02%.

Philips, the managing director of Philips Electronics of Thailand, revealed that Philips will close its fluorescent tube factory in the Pupu Industrial Zone in Samut Prakan in the third quarter of this year, because the use of LED tubes has continued to increase over the past three years. In the next 1-2 years, the proportion of LED lamps will increase from 34% to 50% of the target, so it was decided to close the above factories.

LED tubes have always been the best sellers in overseas markets, especially in Europe and the United States.

The domestic LED lighting giant Sunshine lighting has experienced rapid growth in the first half of the year, and LED overseas market share can be said to be indispensable. Sunshine lighting customers are mainly Philips, and on this basis, they are also actively expanding to include brand manufacturers such as Lloyd's, as well as supermarkets and other sales channels.

In the first half of 2016, Sunshine Lighting completed the distribution of French and German channels in Europe, initially forming a relatively complete layout in the European and American markets.

In 2015, Guoxing Optoelectronics released the square plastic T5 bracket series, which continued to lead the domestic dark trough shadowless T5 bracket market. At the same time, it launched a series of cost-optimized T5-JE national wind and other products to improve the T8 tube. The process flow of panel lamps, ceiling lamps and other products reduces the cost of products in all aspects.

At the Light+Building exhibition in Frankfurt at the beginning of this year, Guoxing Optoelectronics introduced improved T8 glass tubes, T8 aluminum tubes, T5 tubes, etc., which are domestically superior, stable and reliable, and cost-effective. Appearance exhibitors are sought after.

The most sensible way for companies to avoid being involved in the price war is to avoid product homogeneity and provide more added value for the product. The price war is only a market means at best, not the only choice for the company.

Domestic price, foreign pay more attention to price

At present, the domestic lighting market is more willing to choose low-priced products because of the serious homogenization of products and price wars. Although the domestic market has gradually returned to rationality, the market demand for low-priced products is still very large.

Compared with the domestic market, consumers in foreign markets pay more attention to product quality, technology and brand influence. In overseas markets, cost-effective products are more popular.

In fact, there is indeed a big difference between domestic market demand and overseas market demand.

There are many factors affecting the demand of overseas markets, such as industrial transfer. In order to save labor costs, many companies have transferred their lighting business to Africa, Southeast Asia and other regions.

Yang Zhenhua, director of Yap'er Marketing, pointed out that "the current domestic competition is too hot, many companies have no bottom line price wars, and companies need to make some reasonable adjustments in the future."

In addition, the regulatory system in overseas markets is relatively strict.

On August 25, 2016, Cree officially announced the recall of 189,000 LED T8 tubes in the North American market, coded as “BT848 Series Lights”. The recalled lamps may overheat and melt, posing a risk of burns. Cree has received 12 reports of the danger of overheating the luminaire.

Scale + product package = cost control

Since the current price of lamps is close to the cost threshold, companies can only seek space from internal cost control.

DuPont, the project manager of Debon Lighting, said, “At present, the main factors that limit the cost control of lamps are labor costs, material costs, and manufacturing costs.”

“The price of the lamp has exceeded its own limit. The enterprise relies on the scale effect to squeeze the cost, but this is limited. In addition, the manufacturing cost is reduced through automation, but basically there is not much room.” Sanxiong Aurora General Manager Lin Yan told Gaogong LED that there will be new ways to reduce costs in the future, but the space is limited.

Price reduction promotion is an important means of competition for manufacturers. For enterprises, price reduction is not just a simple profit-making behavior. The price reduction can expand the market share; internally, it is an "internal revolution" of enterprises.

Due to the very low threshold for LED tube manufacturing, many small and medium-sized enterprises have flocked to the market to compete, and future price cuts will continue until a certain critical point is reached.

The current market for lamp products is mixed and the prices are different. Under this market environment, enterprises only continue to dig deep into technology, strictly control quality, and expand production capacity to improve their competitiveness.

“Lighting companies can survive. There are two ways to control costs. One is large-scale manufacturing, such as Buddha Photo, Mulinsen, etc.; the other is differentiated by product matching, such as voice control, infrared Wait." Yang Zhenhua told Gaogong LED.

LED lamp prices will continue to fall, narrowing the decline

At present, the domestic brand manufacturer T8 LED tube price is below RMB 10, while the average price of Philips in the US Home Depot channel is USD 8.99.

The relevant person in charge of a major lighting factory in China also revealed that “the current LED lamp price has dropped below 10 yuan, and it is expected that there will be a 20% cumulative price reduction in the future.”

Du Fu said, "At present, the price of LED tubes for export has reached about 1 US dollar, and will fall in the future. It is hard to say the specific space for decline."

The data shows that the price of LED tubes in the market declined by more than 50% in 2015, but the price decline in the first half of this year was rapidly narrowing.

In recent years, with the sinking of channel construction, the rural market has gradually opened up, the price of LED lighting products has become more transparent, and with the popularity of LED lighting and the improvement of technological level, it is expected that LED lamp prices will continue in the next few years. Continue to go lower, market demand will continue to expand.

But the competitive landscape seems to be undergoing some subtle changes.

At present, under the background of “big and large Evergrande”, the production and sales of lamps are concentrated in some large manufacturers, and the market competition will not be particularly obvious.

The demand for lamps is unquestionable. As flattening becomes more serious, more market levels are reached, and competition in the future market will become larger.

Yang Zhenhua believes that "the competition will eventually form an oligopolistic market, and only a few large companies will continue to do so, and gradually form a monopoly in a single brand."

As the LED industry pays more and more attention to market segmentation, the development of SMEs will become more and more difficult, and only innovative differentiated products can continue to survive.

"Continuing to follow the homogenization route, enterprises that cannot form economies of scale have been unable to compete with fierce competition in market prices." Yang Zhenhua admits that blind price competition can not only produce better, but will disrupt the entire market.


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