On one side is the promising market prospect in the future, on the other side is the fierce competition of terminals. The prospect seems happy and beautiful, but the reality is confused and cruel. What is difficult for LED lighting companies to resist is the trend, and the most difficult thing is the process and the struggle. We look and think; we listen and ponder.
The invisible front, the inaudible "fate"
In the post-industrial era where terminals are decisive and channels are king, almost all lighting companies are aware of the need to build a complete sales network. "If 2012 was about testing the waters and 2013 was about starting a war, then in 2014, the channel war between LED companies will be a stage of bare-chested and close combat." said Li Zhipeng, managing director of Foshan Nanhai Maoyu Lighting Co., Ltd.
The so-called hidden channels refer to key people or companies that can determine and recommend customers. They have become a part that companies must consider and increase when developing markets. "The hidden channels in the domestic LED lighting industry mainly include home decoration companies, tooling companies, installation companies, design companies, commercial replacements, brand chains, engineering companies, etc." The person in charge of an engineering lighting company said truthfully. Especially in the field of engineering sales, designers have become an unavoidable important link in engineering sales - lighting products cannot be marked with brands on design drawings, but only with technical specifications; usually many companies use designers to promote lighting products and cleverly embed their best products and products with technical thresholds into designers' drawings and design plans. Just like the name of the hidden channel, it is an opaque channel with opaque product prices, opaque sales rules, serious information asymmetry among consumers, designers, and enterprises, etc., which has become a problem of "huge kickbacks" for designers.
During an unannounced visit, we found that some lighting sales staff are accustomed to the phenomenon of designers receiving kickbacks, and they do not shy away from talking about such issues. According to an industry insider who did not want to be named, "Whether it is a merchant or a designer, this has become a rule. If the designer and the merchant of a certain brand have not negotiated the 'introduction fee', many designers will prevent consumers from purchasing this brand." A merchant in a lighting city revealed, "Many designers will talk about the issue of kickbacks when they enter our store, and many people even pretend to be designers to buy lamps, hoping to get kickbacks from designers, which promotes a bad trend in this industry."
A person in charge of a decoration company said: "Since most consumers are laymen and are not familiar with the market conditions, designers still need to make recommendations. This will result in lighting sellers and designers reaching a community of interests. Many lighting companies will also prohibit designers from receiving kickbacks. This provision is written into the contract, but in actual operation There will still be certain difficulties in supervision and enforcement. "Many designers just smiled bitterly, "Perhaps the rebates can only be explained by different pursuits." A designer friend said bluntly, some people get satisfaction by providing owners with a comfortable home environment, while others rely on seeking maximum economic benefits to fulfill their selfish desires. These are two different pursuits.
Compete to knock down dominoes
Regarding the relationship between products and brands, it can be said to be similar to the relationship between form and god. Reasonable allocation of resources is also very important. Some people say "don't put all eggs in the same basket" to reduce the risk of annihilation, just like the designer's appreciation of beauty. While blindly recommending products with unique appearance advantages, you must know that judging from the current market feedback, owners pay more attention to the function of lighting products rather than the appearance (the appearance is only a bonus), and for products, only in use can their value be better reflected.
The rise of the hidden channel value chain today has greatly stimulated domestic LED lighting companies, including Qinshang Optoelectronics, Hongli Optoelectronics, Everbright, Jicheng and other LED lighting companies. They have "consciously" built a hidden channel business model and actively obtained project intelligence information through hidden channels. But in contrast, funds are mobilized to encircle and annihilate these enterprises, making them a "gluttonous feast" on the plate. Some people say that "designers" can establish their own channels. Many companies still need to occupy the market with more confrontations and collisions, or to occupy the market without bloodshed, right? No?
"Vicious cycle", which one is right and which one is wrong?
There is an old saying in China: "Build the plank road in the open and cross the Chen Cang secretly." "Chen Cang" - is the establishment of hidden channels. Some companies in the industry have taken the initiative to adjust and develop diversified business models, paving a "bloody road" for corporate development; some companies have fallen in the industry reshuffle and have not yet seen the dawn of market warming; as the market cake is redistributed, the pace of resource integration between industries is also constantly accelerating and adjusting, and cross-border, listing, alliances and other events are common...
"With traditional Compared with channels, the hidden channel resource entities themselves are very scattered, including distributors, designers, construction parties, purchasers and other key links. They all have insufficient knowledge of LED products on the market. They have no fixed business premises and are difficult to adopt a distribution model for management. Sales volume is unstable, mostly in project form, and they do not like to be exposed to relationships with end customers. "An industry insider said.
In the opinion of some designers, as long as it is a first-line brand product and has no problem with quality and quantity, then whichever company thinks the most expensive and famous product is good, there is no need to choose - it saves trouble. Under the influence of this concept, small and medium-sized LED companies will find it more difficult to develop hidden channels. The main reason is that the brand awareness of small and medium-sized LED companies is weak, and it is difficult for them to gain the “discernment” of designers.
"A product does not exist in a certain space for no reason. Its existence has its own rationality, and this rationality is the designer's humanized space processing and shaping to meet the owner's usability and aesthetic needs. We not only provide products, we also provide technical cooperation and support," Mr. Liu from the home decoration design company said truthfully. However, some small and medium-sized LED companies do not have enough funds to support their large-scale development of hidden channel markets, and it is difficult for designers to understand or apply these company products.
Word-of-mouth derives "poisoning effect"
China Architecture and Interior Designers Network once issued a survey report: 97% of designers will recommend material products to owners during design, and more than 50% of owners will choose to purchase recommended products from dealers recommended by designers. This is the main factor that attracts companies through the designer channel, because each designer runs his own circle of owners, and this circle is mostly spread through friends' introductions and word-of-mouth. Therefore, the owner trusts and relies on the designer’s professional and aesthetic perspective, thus creating a more unique choice and voice for the designer.
Judging from the current situation, designer channels mainly exist as self-built by local dealers, and companies only provide support for product research and development. "For the designer channel, some dealers win through high rebates. Dealers who win through this method only pursue short-term interests and generally do not concentrate on representing a certain brand and often change brands." This is actually a chain reaction. Whether it is for enterprises or designers, both parties are operating a circle of trust (word of mouth). If one loss occurs, everything will be lost.
A manufacturer who did not want to reveal his real name said frankly that there is a very incredible but very helpless phenomenon in the LED industry: in China, you can buy the worst LED products at the highest price, while in foreign countries, you can often buy very high-quality LED lighting products at the best price. Therefore, small and medium-sized lighting companies may wish to calmly think about taking their own characteristic path. In an era where information is becoming more and more transparent, if you want to reflect the soul of a product, you must first tell the product story well. A true "brand" will definitely have consumers who are highly loyal and willing to promote the brand. However, what enterprises lack is "independence". Without "independence", there is no "uniqueness". Without "uniqueness", even "recognition" cannot be established. So how can we talk about reputation? Only by building a solid reputation, building your own brand, and making the quality of your products bigger, stronger, and more refined can you occupy a place in the increasingly fierce competition.
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