Price war is the future of the overdraft LED display industry

At present, the frequent price wars in China's LED industry are not accidental, but determined by the development environment and development stage of the current industry. The price war in the LED industry, with price cut as the main feature, is a common method used by LED companies to maximize their profits and increase market share in the current competitive industrial environment. In order to survive and develop in the cruel market competition environment, it is necessary for LED companies to seize market share. As the most effective and effective means to seize the market, price war is also favored by LED companies.

In recent years, the upgrading of technology in the LED industry has become faster and faster, and there are different levels of overcapacity in the industry. Serious overcapacity will cause LED enterprises to face a huge survival crisis; industry innovation awareness is generally lacking, product homogeneity The phenomenon is serious, and the marketing level is low... In the face of such a dilemma, most enterprises have nothing to do except price cuts; more SMEs are forced to participate in price wars in the market economy competition, due to their own enterprise strength, scale, etc. It is not the same as big companies. The result is often heavy losses, the market is falling, and the interests are damaged.

Price war is the future of the overdraft LED display industry

Once the industry is facing overcapacity, the first thing that enterprises think of is price reduction promotion. When the larger-scale enterprises cut prices, many small and medium-sized enterprises have to be forced to “combat”, and then two families and three families have cut prices, and then the domino effect broke out, affecting the entire Price wars in the LED industry are inevitable.

From this picture alone, we can conclude that from 2008 to 2011, China's LED outdoor electronic screens have experienced explosive growth. From 2011 onwards, this growth rate has slowed significantly, and even showed partial decline. trend.

Think carefully. From 2008 to 2011, we experienced activities such as the 2008 Olympic Games, the 2010 World Expo, and the Guangzhou Asian Games. These events also prompted local governments to use urban lighting projects as an important measure to beautify and promote the city. Special funds will be allocated to support the transformation of high-traffic areas such as shopping malls and streets. Therefore, in the past three years, LED outdoor electronic screens have experienced explosive growth.

But when these activities are over, the drawbacks of excessive expansion before the LED display begin to show up. There are too many LED display companies, and they are mainly small and medium-sized enterprises. In the process of development, small and medium-sized LED display companies tend to expand production scale, light innovation, and light technology investment; weight expansion and light weight improvement. This blind pursuit of volume expansion to seize the market, not focusing on product development, the end result can only lead to repeated production of low-end products. The overcapacity of low-end products has undoubtedly intensified the disorderly price competition between the same industry in the domestic and foreign markets, resulting in a sharp decline in corporate profits, while the high-end product market is basically occupied by foreign products.

There are advantages and disadvantages in the price war: from the perspective of enterprises, some small and medium-sized LED companies are not deep enough in their own capital chain budget and analysis, whether they are forced to reduce prices by competitive pressure, or blindly follow the price war, which eventually leads to the break of the capital chain, the business owner Overwhelmed by the roads; from the product point of view, many small and medium-sized LED companies in order to survive in the whirlpool of price wars, are constantly challenging the bottom line of product quality, seriously affecting the public's awareness and confidence in the industry , which in turn seriously affects the development of enterprises and even the industry.

Although the price war has produced a huge stimulus to consumption, its negative effect is very obvious. The current price war in the LED display industry has fallen into the quagmire of vicious competition. The disadvantages are more and less, and it is undoubtedly overdrafting the entire future.

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