For the domestic market, the current LED lighting product promotion models mainly include six kinds of contract energy management (EMC), financial subsidies, government procurement, direct supply of engineering, engineering sales agency distribution, circulation distribution, etc., of which the first five are the main Promotion model. At present, due to the high price of products, it is still more difficult to be accepted by individual consumption, and there is no general demand. Therefore, the sixth distribution distribution market accounts for the smallest proportion.
Project Consignment: Transition
Before circulation distribution has not become mainstream, the distribution mode of engineering sales agency is the main promotion mode of LED lighting products.
The characteristic of the engineering sales agency sales method is that manufacturers only provide products and services, and business-related business operations are completed by agents or distributors, and the costs incurred are also borne by them. Risks and benefits are corresponding. Therefore, traditional lighting industry engineering products have formed a certain long-term practice. Manufacturers must ensure that a certain percentage of gross profit margins of agents or distributors can guarantee the ultimate real benefits of these partners, thus contributing to Stable long-term cooperation. The original value of LED products is relatively high, and then continue the tradition of traditional lighting, manufacturers to determine the proportion of the project to guide the owners of the project price, then the price will be several times the number of traditional lighting products, to a certain extent Affect the market's promotion effect. However, with the price reduction of LED upstream, the terminal price has been declining all the way, and the engineering sales agency sales model will become the most popular promotion mode for LED lighting products before mainstream distribution distribution has become mainstream.
Direct supply of engineering: limitations
The direct supply of engineering direct has inherent limitations. Manufacturers can only pay attention to a certain geographical area or a certain industry field, and do a good job of engineering direct supply business.
Direct supply of engineering, as the name suggests, is that manufacturers face the direct sales of engineering end users. Since LED products belong to a new generation of lighting products, end-user acceptance has a longer process. The reason is that when any major technological innovation product is just introduced to the market, the information between the manufacturer and the user is asymmetric, especially the product information. It takes a certain period of time to reach a relatively symmetrical balance from severe asymmetry. Therefore, regardless of whether the manufacturer promotes to the user or the user consults the manufacturer, the principle of proximity to geography or the principle of proximity to personal contact will generally be used. Thus, we can see the phenomenon is that almost all manufacturers engaged in domestic sales have a certain product quality bottom line and based on long-term business, generally preferred to use the project direct supply model to promote products and gradually expand the market around the company location. However, as the symmetry of the information of new products tends to be balanced and the sales area of ​​the manufacturers continues to expand, the direct supply model of engineering will not be able to meet the needs of business development. It has inherent limitations, manufacturers can only focus on a certain geographical area or an industry sector to do a good job of engineering direct supply business, and many are not specialized, can not do without special regulations.
Government Procurement: Demonstration Role At present, the main government procurement of LED lighting products is local governments at all levels. This method plays a significant role in the promotion of lighting products.
In the government procurement model, we do not include the government's daily purchases of fixed assets investment projects in the engineering business category, but only target the special procurement of LED lighting products. At present, there are "Ten Cities Ten Thousand Miles" projects, as well as energy-saving renovation projects led by the local development and reform commissions. Local governments at all levels have begun to try to use LED lighting products. However, due to the government’s procurement plan, there are certain process rules. Therefore, it is necessary to first develop a small project plan after a small amount of money, and arrange special financial funds to promote LED lighting products. Promotion work. At present, the main government procurement of LED lighting products is local governments at all levels. If they are changed to LED lighting products on the basis of the original project construction budget, it will greatly increase the budget expenditure. At present, the revenues of local governments at all levels are limited, especially when land revenues fall. Most of them adopt multi-year installments, ranging from three years to five years, bringing huge funds to production companies. Pressure, therefore, is not a method that can be achieved anywhere in the country, but it can play a large role in modelling. Of course, if the energy-saving emission reduction task is further strictly implemented, it will greatly stimulate the market demand for government procurement.
Financial subsidy: The effect of superposition should make the effect of the national project more obvious. Three levels of governments at the provincial, city, and county levels should use the same amount of funds in the same period so that the promotion can be superimposed.
With financial subsidies, the local development and reform commissions (including the urban construction and transportation departments) have also introduced fiscal subsidies for LED lighting products, such as pilot demonstration projects in Shanxi Province and high-efficiency lighting promotion projects in Jiangxi Province. However, due to limited subsidies, LED lighting With the characteristics of high prices for products, the price after subsidy is still much higher than that of traditional lighting products, and it is still difficult to effectively instigate the residential user market. National Development and Reform Commission's "National High-efficiency Lighting Product Promotion Project" has not incorporated LED lighting products into this project due to energy conservation certification and standards. The practice of the local development and reform commission is to grope for the experience of launching a national project. If the national project is started and a certain amount of state financial funds are allocated, we believe that it will definitely play a decisive role in the promotion of LED lighting products. The promotion effect of three-color fluorescent lamps over the past five years is obvious. To make the effect of the national project more obvious, it is recommended that the three levels of governments of provinces, cities, and counties come up with matching financial budget funds in the same period, so as to increase the subsidy and increase the effect of superposition. Especially for residential users, the high price characteristics of LED lighting products, even with half-price subsidies, the market's active demand is difficult to be driven by large-scale.
EMC model: There is no financial support from banks. It is difficult to achieve the promotion and application of LED lighting products through the EMC model.
In the EMC model, relevant documents of the country have accurately defined this model, and the method of subsidy is defined for the sharing contract. However, most of the subsidies and operating rules of provinces and cities have been unclear, which has affected Market participants' enthusiasm for participation. For LED lighting manufacturers, the use of EMC model to promote products, the focus is to confirm the operation of the subject. We do not advocate that LED lighting companies directly play the role of energy-saving service companies and implement contract energy management for end users. We insist that we should actively cooperate with professional energy-saving service companies to promote this type of business, and manufacturers only play a very pure role in product and technology providers. The key point of the EMC model lies in the advancement of products. The vast majority of energy-saving service companies that have entered the National Development and Reform Commission's filing list are hard to come up with such an order of their own funds, and their financing capacity is also limited. Non-public enterprises in this regard The deficiencies are particularly obvious. Although the state has introduced policies to encourage commercial banks to actively participate in this work, it has not introduced specific details of specific incentives. Commercial banks around the country are also trying to explore, but only a small-scale attempt. Therefore, without the financial support of banks, it is difficult to achieve the promotion of LED lighting products through the EMC model. Another downside is that the EMC model achieves revenue through savings in electricity bills. The electricity tariffs charged by government departments are much lower than those for commercial use, and are generally lower than those for industrial use. Most municipal utilities and residents use electricity. Electricity charges are similar. After we have done a lot of detailed technical and economic evaluation programs, we found that the input-output ratio is far lower than expected, and the electricity cost saved barely meets the cost of one-time renovation. When the savings in electricity bills are completed, the lifespan of LED lighting products is also approaching the end, which is particularly evident in the promotion of street lamps. When we face non-governmental consumption projects, the advantages of the EMC model are very obvious, especially the commercial lighting renovation project. For example, if a T8 straight tube is turned on for 24 hours, it will generally be able to recover the investment in 14 months, and the product's lifespan is only 1/3 of the past. This is the most realistic embarrassment of the EMC model in the face of government procurement.
Various LED lighting product promotion models have their own advantages and disadvantages, and the participating parties are still actively exploring. Foreign LED lighting products have more market demand in indoor lighting applications than in outdoor engineering products, and the fast-growing market is still in developed countries. In addition to the difference in fixed assets investment to stimulate economic growth, it is even more critical that the developed country market implements the principle of prior standard sales, and that product standards are strictly enforced. Once a manufacturer breaks the standard bottom line, it may be permanently banned from the market. Another market factor is that the selling price of tricolor fluorescent lamps in developed countries is 6 to 10 times that of domestic ones. Even after deducting the income difference factor, we think it is at least 2-3 times the domestic sales price because the developed countries have already recycled the fluorescent lamps. The cost is added to the sales price, but our country does not. Therefore, when comparing the cost-effectiveness of fluorescent lamps and LED lighting products, the differences are highlighted. Coupled with the people's awareness of differences in energy-saving and low-carbon, and some developed countries have begun financial subsidies for residents to buy LED lighting products. Therefore, the combination of these factors, in the face of domestic users a large area to promote LED lighting products is not yet ripe. At present, we should insist on promoting non-individual use of the main body, that is, the government and other non-public units to promote LED lighting products.
Project Consignment: Transition
Before circulation distribution has not become mainstream, the distribution mode of engineering sales agency is the main promotion mode of LED lighting products.
The characteristic of the engineering sales agency sales method is that manufacturers only provide products and services, and business-related business operations are completed by agents or distributors, and the costs incurred are also borne by them. Risks and benefits are corresponding. Therefore, traditional lighting industry engineering products have formed a certain long-term practice. Manufacturers must ensure that a certain percentage of gross profit margins of agents or distributors can guarantee the ultimate real benefits of these partners, thus contributing to Stable long-term cooperation. The original value of LED products is relatively high, and then continue the tradition of traditional lighting, manufacturers to determine the proportion of the project to guide the owners of the project price, then the price will be several times the number of traditional lighting products, to a certain extent Affect the market's promotion effect. However, with the price reduction of LED upstream, the terminal price has been declining all the way, and the engineering sales agency sales model will become the most popular promotion mode for LED lighting products before mainstream distribution distribution has become mainstream.
Direct supply of engineering: limitations
The direct supply of engineering direct has inherent limitations. Manufacturers can only pay attention to a certain geographical area or a certain industry field, and do a good job of engineering direct supply business.
Direct supply of engineering, as the name suggests, is that manufacturers face the direct sales of engineering end users. Since LED products belong to a new generation of lighting products, end-user acceptance has a longer process. The reason is that when any major technological innovation product is just introduced to the market, the information between the manufacturer and the user is asymmetric, especially the product information. It takes a certain period of time to reach a relatively symmetrical balance from severe asymmetry. Therefore, regardless of whether the manufacturer promotes to the user or the user consults the manufacturer, the principle of proximity to geography or the principle of proximity to personal contact will generally be used. Thus, we can see the phenomenon is that almost all manufacturers engaged in domestic sales have a certain product quality bottom line and based on long-term business, generally preferred to use the project direct supply model to promote products and gradually expand the market around the company location. However, as the symmetry of the information of new products tends to be balanced and the sales area of ​​the manufacturers continues to expand, the direct supply model of engineering will not be able to meet the needs of business development. It has inherent limitations, manufacturers can only focus on a certain geographical area or an industry sector to do a good job of engineering direct supply business, and many are not specialized, can not do without special regulations.
Government Procurement: Demonstration Role At present, the main government procurement of LED lighting products is local governments at all levels. This method plays a significant role in the promotion of lighting products.
In the government procurement model, we do not include the government's daily purchases of fixed assets investment projects in the engineering business category, but only target the special procurement of LED lighting products. At present, there are "Ten Cities Ten Thousand Miles" projects, as well as energy-saving renovation projects led by the local development and reform commissions. Local governments at all levels have begun to try to use LED lighting products. However, due to the government’s procurement plan, there are certain process rules. Therefore, it is necessary to first develop a small project plan after a small amount of money, and arrange special financial funds to promote LED lighting products. Promotion work. At present, the main government procurement of LED lighting products is local governments at all levels. If they are changed to LED lighting products on the basis of the original project construction budget, it will greatly increase the budget expenditure. At present, the revenues of local governments at all levels are limited, especially when land revenues fall. Most of them adopt multi-year installments, ranging from three years to five years, bringing huge funds to production companies. Pressure, therefore, is not a method that can be achieved anywhere in the country, but it can play a large role in modelling. Of course, if the energy-saving emission reduction task is further strictly implemented, it will greatly stimulate the market demand for government procurement.
Financial subsidy: The effect of superposition should make the effect of the national project more obvious. Three levels of governments at the provincial, city, and county levels should use the same amount of funds in the same period so that the promotion can be superimposed.
With financial subsidies, the local development and reform commissions (including the urban construction and transportation departments) have also introduced fiscal subsidies for LED lighting products, such as pilot demonstration projects in Shanxi Province and high-efficiency lighting promotion projects in Jiangxi Province. However, due to limited subsidies, LED lighting With the characteristics of high prices for products, the price after subsidy is still much higher than that of traditional lighting products, and it is still difficult to effectively instigate the residential user market. National Development and Reform Commission's "National High-efficiency Lighting Product Promotion Project" has not incorporated LED lighting products into this project due to energy conservation certification and standards. The practice of the local development and reform commission is to grope for the experience of launching a national project. If the national project is started and a certain amount of state financial funds are allocated, we believe that it will definitely play a decisive role in the promotion of LED lighting products. The promotion effect of three-color fluorescent lamps over the past five years is obvious. To make the effect of the national project more obvious, it is recommended that the three levels of governments of provinces, cities, and counties come up with matching financial budget funds in the same period, so as to increase the subsidy and increase the effect of superposition. Especially for residential users, the high price characteristics of LED lighting products, even with half-price subsidies, the market's active demand is difficult to be driven by large-scale.
EMC model: There is no financial support from banks. It is difficult to achieve the promotion and application of LED lighting products through the EMC model.
In the EMC model, relevant documents of the country have accurately defined this model, and the method of subsidy is defined for the sharing contract. However, most of the subsidies and operating rules of provinces and cities have been unclear, which has affected Market participants' enthusiasm for participation. For LED lighting manufacturers, the use of EMC model to promote products, the focus is to confirm the operation of the subject. We do not advocate that LED lighting companies directly play the role of energy-saving service companies and implement contract energy management for end users. We insist that we should actively cooperate with professional energy-saving service companies to promote this type of business, and manufacturers only play a very pure role in product and technology providers. The key point of the EMC model lies in the advancement of products. The vast majority of energy-saving service companies that have entered the National Development and Reform Commission's filing list are hard to come up with such an order of their own funds, and their financing capacity is also limited. Non-public enterprises in this regard The deficiencies are particularly obvious. Although the state has introduced policies to encourage commercial banks to actively participate in this work, it has not introduced specific details of specific incentives. Commercial banks around the country are also trying to explore, but only a small-scale attempt. Therefore, without the financial support of banks, it is difficult to achieve the promotion of LED lighting products through the EMC model. Another downside is that the EMC model achieves revenue through savings in electricity bills. The electricity tariffs charged by government departments are much lower than those for commercial use, and are generally lower than those for industrial use. Most municipal utilities and residents use electricity. Electricity charges are similar. After we have done a lot of detailed technical and economic evaluation programs, we found that the input-output ratio is far lower than expected, and the electricity cost saved barely meets the cost of one-time renovation. When the savings in electricity bills are completed, the lifespan of LED lighting products is also approaching the end, which is particularly evident in the promotion of street lamps. When we face non-governmental consumption projects, the advantages of the EMC model are very obvious, especially the commercial lighting renovation project. For example, if a T8 straight tube is turned on for 24 hours, it will generally be able to recover the investment in 14 months, and the product's lifespan is only 1/3 of the past. This is the most realistic embarrassment of the EMC model in the face of government procurement.
Various LED lighting product promotion models have their own advantages and disadvantages, and the participating parties are still actively exploring. Foreign LED lighting products have more market demand in indoor lighting applications than in outdoor engineering products, and the fast-growing market is still in developed countries. In addition to the difference in fixed assets investment to stimulate economic growth, it is even more critical that the developed country market implements the principle of prior standard sales, and that product standards are strictly enforced. Once a manufacturer breaks the standard bottom line, it may be permanently banned from the market. Another market factor is that the selling price of tricolor fluorescent lamps in developed countries is 6 to 10 times that of domestic ones. Even after deducting the income difference factor, we think it is at least 2-3 times the domestic sales price because the developed countries have already recycled the fluorescent lamps. The cost is added to the sales price, but our country does not. Therefore, when comparing the cost-effectiveness of fluorescent lamps and LED lighting products, the differences are highlighted. Coupled with the people's awareness of differences in energy-saving and low-carbon, and some developed countries have begun financial subsidies for residents to buy LED lighting products. Therefore, the combination of these factors, in the face of domestic users a large area to promote LED lighting products is not yet ripe. At present, we should insist on promoting non-individual use of the main body, that is, the government and other non-public units to promote LED lighting products.
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