LED display companies' overseas market expansion and influence
The main way for LED display companies to expand overseas
Nowadays, the internationalization of China's LED display competition has become the norm. However, domestic display companies have a directional choice between “going out” and “going out”, and the choice of the market. "Going out" is the ultimate goal, but where to go, how to go? But every LED display company is different. In terms of personal life, choice is very important; for a company, choice is more likely to be a matter of survival. From the current LED display companies that have successfully entered the overseas market, there are several ways for domestic LED display companies to go out:
From the ISE Audiovisual Exhibition in the Netherlands, EUROSHOP in Germany, the UK Advertising Exhibition, the American Advertising Exhibition ISA, FESPA Germany and other exhibitions, we can all see the Chinese LED display companies. Our domestic LED display can even say that we spare no effort to participate in overseas exhibitions. Moreover, Chinese LED display companies have also participated in overseas exhibitions, and they have also presented a "floating bee" style. It is said that the Infocomm exhibition held in Orlando in the first half of the year, a total of 148 LED display companies participated in the exhibition, of which Chinese companies accounted for nearly half.
The exhibition is undoubtedly one of the most direct paths for LED display companies to go out. The saying goes, “It’s that you know when you’re out of the marathon.” The show is just such an excellent stage for companies to show their strength, shape their brands and market. It can give customers a most intuitive impression of the LED display company's products. Through this direct display, this will definitely play an excellent role in the company going out.
However, although the exhibition is an excellent occasion for companies to show their strength, increase their exposure and enhance their brand awareness, the exhibition also has its limitations. According to the understanding, China's LED display companies have entered the overseas market, and there are not many examples of customers placing orders directly through the exhibition. The main reason is the follow-up in the later stage. The reason for this result is undoubtedly many LED display companies in China, lacking brand awareness.
Shenzhen led display
Nowadays, in the information age, the Internet has brought people's communication distance infinitely closer. The electronic marketing business with the help of online channels has become one of the marketing models of modern enterprises. In this regard, through the network search engine marketing (search engine marketing: English Search Engine Marketing, we are often referred to as "SEM") has become the main means of domestic LED display companies. This kind of network marketing based on the search engine platform, taking advantage of people's dependence on the search engine and usage habits, and transmitting information to the target users when they retrieve information, has won the favor of many LED display companies in the industry. After all, compared to the traditional sales model, this marketing model allows potential customers to communicate with the company in the first time, understand the company and products, and then realize the transaction. Its advantages are fast and convenient.
Another mode of LED display network marketing is sales through internationally renowned e-commerce platforms. However, due to the special nature of LED displays, this sales model is often not ideal.
3、Traditional sales model
In addition to the use of the Internet through the Internet, domestic LED displays go overseas, the most common is based on the traditional sales model, that is, through the development of local distributors, the establishment of overseas sales channels. Compared with the domestic market, it is very difficult to build channels overseas. It is reported that at present, some domestic channel-based enterprises have already tested overseas in this regard, trying to promote overseas expansion by copying domestic successful experiences, and then achieve the purpose of entering foreign markets. In this respect, powerful giant color can be said to be a good example. Known as the "king of the channel", the powerful giant color, its "thousands of thousands of stores" project in the country, so that its sales channels sink to the township level, thereby expanding market share. As for the future business model of this channel, whether it can become one of the successful roads for overseas expansion will require time and market to verify.
In addition, LED display companies are also a very good way to enter overseas markets by undertaking large-scale engineering projects. But companies that go out in this way usually have to have strong financial and technical strength.
The phenomenon of foundry is relatively common in China. It is a major trend in production and sales under the international division of labor. In China's manufacturing industry, there are some factories that, although not well-known, are OEM manufacturers of world-renowned brands. These factories are produced after receiving production orders from world-renowned brands and are often sold at extremely high prices after being produced by Chinese OEM (OEM) factories. As a result, while the brand side has taken a high profit, the foundry factory can only obtain a meager profit. This kind of foundry phenomenon also exists in our LED display industry.
Among them, there are some well-known domestic leading enterprises, as well as the processing of internationally renowned LED brands. After all, China has the most complete industrial chain and has advantages in terms of human resources. Therefore, it is also one of the ways of domestic LED display companies to participate in overseas market competition through OEM.
In the long run, in many ways to go overseas, it is undoubtedly the best way for LED display companies to go overseas by establishing subsidiaries overseas and creating their own brand effects. A few years ago, China's LED display companies in the brand influence, and internationally renowned brands, such as Daktronics, Barco, etc. can not be compared. However, over the years, domestic LED displays have achieved good results through years of hard work, especially through the acquisition of well-known foreign brands, such as Liard, which expanded by acquiring the world's top display and digital signage system supplier, Pinda Electronics. Liard's global influence. With the strong customer resources and innovative capabilities of Pingda Electronics, Liard's competitiveness in overseas markets is constantly increasing, providing a strong guarantee for the expansion of overseas markets.
Today, Chinese LED display companies, such as Liard, Ai Biesen, Lehman, Lianjian, Qipuguang, and Shigeo Guangxu, have been widely recognized overseas and become the main manufacturers of LED display companies in China. Brand. All in all, the ways and means for Chinese LED display companies to enter overseas are diverse. Moreover, the model for each company to expand the offshore market is not single, or it may be two or even multiple ways.
LED display companies go out to face problems
The implementation of China's "going out" strategy has prompted more and more enterprises to go out, but Chinese companies have not gone smoothly. Due to the lack of independent brands and technologies of Chinese enterprises, the starting point is low and the experience is small. Compared with the world-class multinational enterprises, there is still a big gap, which seriously restricts the development of enterprises in overseas markets. Although China's LED display companies, relying on the advantages of a sound industrial chain, relying on industrial clusters to form a scale effect, let China's LED display name famous all over the world, but a well-known fact is that China's LED display industry is in the upstream chip field. In terms of core technology, there is still a lack.
Shenzhen led display manufacturers
While China's LED display companies are going out, they are also facing a series of risks, and the situation is more complicated, including whether the local political and economic situation is stable, whether laws and regulations and control measures have changed, and whether the company's overseas business management and after-sales service are In place, etc. It also includes changes in the political environment, economic prosperity and purchasing power of the relevant countries, trade policies with China, trade barriers and industry standards. The company has the risk that the overseas marketing plan cannot be effectively implemented and the relevant inputs cannot achieve the expected return. The main problems are summarized in the following aspects:
1、Weak awareness of intellectual property protection
At present, the capital and manpower for investing in improving the technical level and scientific research development are far from enough. The lack of core competition technology is the status quo of China's LED display industry. Although China is the world's largest LED display production country, it has also produced a number of well-known enterprises such as Liard, Chau Ming Technology, Lehman, Lianjian Optoelectronics, Ai Biessen, etc., and also relies on "small spacing" in the international market. On the "clouds and rains", but the current homogenization of LED display products has been very serious, the industry patent infringement and plagiarism is very serious, the company's awareness of intellectual property protection is weak.
Compared with the domestic market, overseas markets, especially the European and American markets, attach great importance to intellectual property protection. In the process of going to overseas markets, Chinese LED display companies are prone to patent infringement disputes. The most typical example is that at the 2014 LED Show in Frankfurt, there were two LED display companies in the China Pavilion, which were cancelled due to “patent infringement”.
For the trade barriers, trade protection, these words are not strange to us. In fact, trade protection exists in almost all countries. But in the past two years, although globalization is still the mainstream of the times, the voice of "reverse globalization" is endless. The Brexit and the US Trump's coming to power are regarded as the landmark events of "reverse globalization."
In the process of LED display companies going out, it is possible to encounter trade barriers set by some countries, such as the US “337 investigation”, which can be said to be the most flexible and lethal trade protection tool in the world. For example, in 2008 and 2010, ITC launched the “337 Survey” on LED “LED” products twice, all of which involved LED display companies, which cost them a considerable price. Therefore, how to avoid these trade barriers has become a problem that LED display companies must face.
3、Blindly expand overseas markets
Domestic LED display companies have a certain degree of blindness in the process of expanding overseas markets. Enterprises lack research on the market they want to enter, and rashly think that the overseas market must be “blue”, just pursuing the expansion of overseas markets. And these may lead to the failure of the display company's transnational operations. For example, the current M&A method that is very popular among Chinese companies is the fastest way to enter the overseas market, but it needs to overcome many obstacles, such as pressure from employees, mergers and acquisitions, and government intervention. For LED display companies, domestic M&A cases are numerous, and there are successes and failures. In terms of overseas mergers and acquisitions, Liard's acquisition of Pingda Electronics can be said to be the most successful case of LED display companies in China. It can be said that it has set a very good example for Chinese LED display companies. However, Chinese companies have no shortage of cases in overseas operations. For example, in 2004, TCL acquired the French Thomson color TV business and established a joint venture company TTE. As the European business continued to slump, it caused losses of nearly 2 billion yuan per year in 2005 and 2006. The cause of this evil is due to lack of market research and risk analysis. For the Chinese LED display companies that are keen on overseas mergers and acquisitions in recent years, they must be taken for granted. They must not blindly follow suit. Before expanding overseas markets, they must conduct comprehensive and in-depth research on the local market.
Shenzhen indoor LED display
4、Insufficient marketing management
As far as the whole is concerned, Chinese companies still have a certain gap in terms of management level compared with international first-class enterprises. To expand overseas markets, LED display companies are faced with a cross-cultural and differentiated environment. The difference between domestic environment and foreign countries is not only reflected in the differences in business practices and customs, but also in terms of culture, management concepts and management methods. . Therefore, domestic display companies must develop profits in the host country, not to copy the local business methods, but to adjust and adapt to the host country's market. At present, many domestic display companies, when they are not familiar with foreign business practices and legal business culture, have rushed into overseas markets, and the risks can be imagined. In general, domestic LED display companies are expanding their overseas markets, and their ability to adapt to the host country's environment is poor. Marketing management capabilities need to be strengthened.
For some LED display companies that set up branches overseas, there are still problems in business management. Generally speaking, most of the employees of multinational enterprises are from the citizens of the host country, which increases the difficulty of dealing with and managing the relationship between the employees of the local and the foreign employees. The display company in China has insufficient experience in cross-cultural management, especially in dealing with Employees' labor conflicts and cultural conflicts.
5、 Price war problem
The price war problem in the LED display industry is almost no "problem". Most domestic display companies are already numb to the price war. The domestic market is fiercely competitive, and the “price war” is constantly on the rise, prompting many companies to turn their attention to foreign markets. However, there are signs that the current domestic price war has spread to foreign countries and there is a trend of further increase. In the past two years, the Southeast Asian market has caused some companies to withdraw from this market and turn to the European and American markets because of the price war.
Relative to the words, the European and American markets have higher requirements for product quality, higher thresholds, no strong technical strength and product quality assurance, and it is difficult to enter. However, as more and more display companies develop and have flooded into this market, the current European and American markets have also sparked a price war. Moreover, the future will not rule out that the price war will intensify and expand into the global market. After all, the global market has now become the battlefield for Chinese LED display companies.
The so-called exchange rate risk usually refers to the possibility of losses due to exchange rate changes in economic activities in which companies hold or use foreign exchange. The fluctuation of foreign exchange rates will bring huge risks to international traders and investors. It is manifested in two aspects: trade exchange rate risk and financial exchange rate risk. Since the RMB has not yet been fully internationalized, China's LED display companies' overseas engineering contracting contracts are mostly denominated in US dollars or local currencies, so the exchange rate changes also affect the company's profit and loss. If the exchange rate fluctuates frequently, it will be very unfavorable for the display companies, and the exchange rate will change drastically. It may also result in the failure to implement the original contract items. Even if it can be implemented, it may eventually be the sale of the loss.
7. After-sales service
For LED display companies entering the overseas market, after-sales service is a very important issue, and it is also a problem that is easily overlooked. Some LED display companies do not even have the concept of after-sales service. They only want to sell the products. As for the subsequent things, they have not been considered at all. However, domestic LED companies want to gain a foothold in foreign markets, and after-sales service issues must not be ignored. Compared with the domestic market, foreign countries will have greater difficulty in after-sales services, and the burden of overseas after-sales service will be higher than the domestic market. Therefore, our LED display companies must not only “go to the local customs”, but also develop a set of service systems in line with the local market based on local customs and their own circumstances. In this regard, China's LED display companies still have a long way to go.
Shenzhen outdoor led display
In addition to the above problems, domestic LED display companies may face other unpredictable problems and various emergencies in the process of going global. Therefore, how to avoid various risks in the process of expanding overseas markets has become a compulsory course for our LED display companies to expand overseas markets. In cultivating and absorbing multinational management talents, integrating marketing and upgrading brands, it is also a key subject for our LED display companies to enter the overseas market.
The impact of global competition on LED display companies
Today, China's LED display products have been widely recognized by international customers, whether in the high-end market, or the low-end market, as long as there is a demand for LED display, you can see the Chinese LED display. As more and more LED display companies go out, Chinese LED display companies have entered a new stage of global market competition. The domestic LED display companies have soared into the overseas market, which will inevitably have a major impact on the development of China's LED industry.
As mentioned above, the price war has spread to overseas and there is a tendency to expand into the mid- to high-end market. The famous economist Mankun scientifically proves that price war is the inevitable choice of consumers from the perspective of economics in the book of Principles of Economics. The price war itself is a kind of market competition and a business strategy. It is a very common and normal thing in itself, but long-term and wide-ranging price wars may damage the interests of the entire industry. In the process of low-price competition, the profitability of enterprises is reduced, and some enterprises sacrifice quality at the expense of profits. As a result, it will not only be detrimental to the development of the company, but also damage the reputation of our entire display industry. In some ways, the price war is one of the reasons for the uneven display of the current export overseas.
On the other hand, thanks to the growth of small pitches, LED displays began to enter the commercial market and began to erode the market share of LCD and DLP. In the face of such a huge business opportunity, the domestic large-scale display manufacturers continue to increase the investment in small spacing, and constantly break the limit of point spacing, which plays a positive role in the overall technical level of the display industry.
At the same time, as more and more display companies have the strength to enter the international market, the future international market will be further expanded and applications will become wider and wider. In addition, the impact of China's LED display screen will lead to a number of international display giants like Sony, Christie and Barco. All in all, LED display companies are widely involved in global competition, and will inevitably play a huge role in promoting the development of China's LED display and even the entire LED industry. (Source: Soso LED)