Policy guidance of local governments
As an emerging industry with high hopes, the LED industry has significantly boosted the economy in some places and has received support from local governments. In addition to financial subsidies, policies also guide cooperation between enterprises. Foshan is a relatively representative city, and its policy orientation of “group development” is very obvious.
It is understood that Foshan has more than 200 companies engaged in the production and supporting of LED products. Most of them have switched from traditional lighting to the LED field, including many domestic first-tier brand companies. With the development of LED technology, product replacement is rapid. The packaging labeling standards of traditional lamps are no longer applicable to LED lamps. The types and models of LED products on the market are complex and the quality is uneven. Moreover, there are no corresponding national standards, industry standards and local standards for LED product packaging labeling, which affects the stable development of the LED market and the environmentally friendly and healthy image of LEDs.
Therefore, as early as 2012, the Foshan Municipal Institute of Technical Standards joined hands with the Foshan Lighting Association and Foshan led Leading Enterprises to establish a standards alliance, conduct field research, and formulate the first domestic led enterprise alliance standards.
Break the unfavorable pattern and plan the future of the led industry
It is an undeniable fact that at present, most of the numerous led enterprises belong to small and medium-sized enterprises with midstream and downstream applications, and there are very few upstream enterprises. Various core patented technologies are in the hands of foreign giants, and the perfect patent system covers the entire industrial chain from raw materials to finished lamps and lanterns, especially the core chip technology. In order to consolidate the advantages in the competition, foreign giants conduct R&D and production through patent authorization and cross-licensing, and even prevent new entrants. Many SMEs are at a disadvantage in the competition.
Patented technology is the key to the healthy development of the entire industry. Just like in the mobile phone industry, when it comes to Android phones, people may think of Samsung. However, when smartphones just emerged, HTC was synonymous with Android phones. However, due to patent disputes with Apple, it plummeted, and the Android phone market was quickly divided. Looking at the numerous anti-dumping cases against Chinese companies, they all appear to be exploited because of the lack of core patented technologies. Some people even predict that the LED industry is likely to be the next industry to suffer from the "American robbery".
At present, international LED industry giants such as Osram, Philips, and Panasonic have established cooperative organizations (Zhaga Alliance) to take the lead in LED standardization. According to industry insiders, it has set up barriers through its light source technology with core intellectual property rights, controlled key links in the industry, and collected high patent licensing fees from Chinese companies through a combination of threats and litigation.
The patent issue in the LED industry cannot be avoided by the entire industry. For this reason, some industry insiders advocate the establishment of an LED industry patent alliance to enhance their voice in international competition.
In addition, some alliances are established to promote the development of domestic LED industry technology. Such alliances are mostly initiated by national or local governments, are relatively well-known in the industry, and have indeed promoted the development of the industry.
Enterprises are closely interdependent and work together to keep warm
In addition to the above reasons, there are also some enterprises as the initiating unit. This is also the fundamental reason why alliances are springing up like mushrooms after a rain. Relative to mature companies, emerging companies are more inclined to join alliances. Emerging LED companies, let alone competing with international giants, cannot compete with traditional lighting companies in domestic competition due to reasons such as lack of deep roots and imperfect channel layout.
Although traditional lighting is accompanied by the pain of transformation, once it breaks through the technology and product barriers, it can still quickly enter the LED industry with its abundant funds and channel resources accumulated over the years. Foshan Lighting and Yapuer are typical representatives. During the transformation process, they launched the concept of filament lamps based on the characteristics of traditional enterprises, which completely became popular in the industry. Many emerging companies and small and medium-sized enterprises have seen the threats posed by traditional lighting companies and urgently need to improve their competitiveness, integrate resources across the entire industry chain, or form alliances with similar companies to strengthen their voice, thus giving rise to a large number of alliances. The alliance with enterprises as the initiating unit has become the main force of the LED industry alliance.
The chaotic industry environment has become the driving force of the alliance
At present, the entire LED industry environment is quite chaotic, with imperfect policies and regulations, lack of lighting standards, and rampant copycat products, resulting in increasingly fierce price competition.
Li Ke, Secretary-General of the Champions League, said in an interview that the situation in which the alliance has gathered is directly related to the chaotic environment in the industry. It is true that everyone needs to integrate and share resources, or reach some kind of industry consensus. If everyone meets together, it will be easy to join forces. When large and small companies have this idea, the alliance will increase.
Consolidation and mergers of alliances are megatrends In
the final analysis, the alliance was established to integrate the resources of the industry for effective use. An industry insider working in the alliance told reporters that the establishment of various alliances was first because LED lighting companies encountered many puzzles and problems in product line selection, the future development direction of the company, brand building, and the difficulty of sinking a single channel.
Compared with traditional lighting companies, LED lighting companies lack deep, long and wide channel dimensions. The company has no brand awareness and is naturally lacking in consumer habits and market knowledge. On the other hand, compared with the traditional lighting industry, the LED lighting industry has more characteristics of the semiconductor and electronics industries. The industry chain is particularly long, and there are very few companies involved from the front end to the back end of the industry. However, few alliances involve the entire industry chain. They are basically dominated by finished product companies. Many companies face the same problems and want to solve these problems and promote collaborative cooperation.
For this reason, the operation of the alliance and the integration of industrial chain resources are important work contents, including the optimization of the supply chain and the expansion of channels. When the enterprises in the alliance work together, their bargaining power for various resources will be enhanced. This is the starting point and final destination of most alliances. There is a phenomenon that most small and medium-sized enterprises join the alliance. The needs of small enterprises are more urgent and they hope to take advantage of the power of the alliance.
The starting point and goal of most current enterprise alliances is the organization and utilization of resources. Combined with the wave of integration and mergers in the entire industry, future alliances are bound to embark on the road of integration. The reason is that the alliance itself is a relatively loosely organized group that comes together for effective resources, but cannot share risks, which is a weakness of the alliance. Most companies work together to keep themselves together, but they work in their own silos. Instead of integrating industry-wide resources, they have created countless small interest groups, which to some extent hinder the integration of industry resources. This may be the real reason why many people in the industry have maintained their opinions and even criticized a lot when asked about the current status of the alliance and the role it plays. Therefore, alliances based on the short-term interests of enterprises will follow the pace of industry integration and enter the wave of integration.
Future alliances will be more based on the common interests of regions, fields and even the entire industry. Especially in the formulation of industry standards, it is more necessary to integrate and coordinate the interests of the entire industry. Alliances based on the interests of individual companies will inevitably be gradually integrated.
ANNA