the price competition in the led display industry is becoming more and more fierce. with the further improvement of industry concentration, most of the led display enterprises survive under enormous operating pressure, while customers enjoy the preferential price brought by it. even the wind of low price also affects project projects, and the phenomenon of “winning the bid at low price” happens frequently, which is not the result of vicious competition.
it is undeniable that, to a certain extent, the decline in product prices has helped to open up markets and expand potential customer groups, and can also promote industry concentration and force manufacturers and enterprises to embark on the road of innovation. however, it can not be ignored that the damage caused by price competition to the whole industry will also be difficult to erase.
if the profit is too low, it’s difficult to operate, why not cut corners?
since the end of last year, raw materials such as upstream led chips and pcb boards have started the “price increase” journey. recently, the news of raw material price increase came again. in the last half year, under the fierce competition, the downstream led display enterprises have replaced customers, even distributors, and become the ultimate bearer of the price increase. moreover, in order to speed up the industry shuffling, large enterprises of led display screen “add another fire”, take the lead in price reduction, so far there is no sign of price increase. there is no doubt that in the future, even if individual manufacturers increase their prices alone, the overall price of led display will be difficult to recover from the past.
under high pressure, there are hard-working and conscientious operators, and there are also many people who take risks. under the circumstances of higher cost and lower price, according to the usual production and operation mode, the profits of led screen enterprises will inevitably become thinner. moreover, after the price drop in previous years, the profit margin of led display has been greatly reduced, and this profit has fallen again. i am afraid that for some manufacturers, they are at the end of the storm. if they do not turn to the production and operation of high-value-added products, they can only reduce costs. there are undoubtedly two ways to reduce costs – intensive production and jerry-building.
chinese people have always believed in the theory of “good quality and low price”. however, the so-called “low price” is not relative cost. when the market price is low enough to cause manufacturers to lose money, where does the “beauty” of goods start? however, due to the vicious price competition, the situation that makes it difficult for manufacturers to ride the tiger is still continuing, and whether the low-price products that customers get can still guarantee the quality is unknown.
r&d costs are high and the price is awkward.
long-term low profits make it difficult for enterprises to maintain normal operation. moreover, triangular debts are prevalent in the industry. once it is difficult to transfer funds, it is not difficult to imagine that r&d expenditure will be cut first among the three links of research, production and marketing. as we all know, in order to carry out product research and development, in addition to the formation of technical teams and technical reserves, we need to prepare corresponding equipment, and most importantly, we need to continue to invest a lot of funds, but when the research and development results can be put into mass production, it is difficult to predict. it is also reasonable to slow down the pace of r&d under the financial constraints.
in addition, some manufacturers want to actively carry out product innovation and upgrading, in order to improve product performance and quality, and increase product competitiveness. but at the same time, the cost of r&d and material upgrading will be shared among the products. of course, products with high performance and good quality are generally more likely to be popular with customers, but in the current situation of low market prices, the price of innovative products is inevitably at a disadvantage compared with similar products, and customers are prone to doubt and distrust products with higher prices, which leads to higher prices. the product is difficult to accept easily. in such a “hard work” situation, the enthusiasm of manufacturers to innovate is frustrated, and the pace of industry development and progress will become slow.
moreover, when this wave of low prices has passed, the industry may be dominated by several large enterprises, while the rest of the enterprises and their successors will not be able to shake their position. under the dramatically reduced competitive pressure, these enterprises tend to be conservative, lack the motive force of innovation and development. in the long run, it is not conducive to the innovation and upgrading of led display.
