The LED lighting OEM company has a confused outlook

The LED lighting OEM company has a confused outlook

In the lighting industry, the phenomenon of foundry is common, including many large brand companies have adopted a large number of OEM. The rise of the LED lighting market, many of the industry's famous celebrities are very rich in their product lines, and the orders that come after the arrival of the production capacity all need to find a foundry. However, LED lamps often appear quality doors, many of which are OEM products. The general manager of a company told the author that when the company has a certain brand influence, production technology, the requirements of the foundry will follow suit. Strictly, it will not be easy to hand over the products to some small foundries, so as not to damage the quality of their own reputation.

However, with the scale, production technology, and channel resources, the foundry that initially won by quantity will begin to transform itself into an independent brand, and OEM will continue to do so, but the quantity will gradually decrease. Now, the question has arisen. Will the independent factories gradually encounter difficulties in their transition to independent brands? How will the independent brands continue to move forward?

OEM is one of the LED industry development models

If we open the "factory map" of China, it is not difficult to find that from electronic products to clothing, from clothing to daily commodities, many international brands take advantage of China's labor costs and products are almost always produced in China. The notebook computer produced by the famous notebook manufacturer Quanta, which accounts for 30% of the world's notebooks, has no proprietary notebook brand; IT data company iSuppli claims that 86% of laptops sold worldwide are from China, but It is mainly produced in the name of Dell, HP, and other OEMs. In addition, there are also many foreign luxury brands have been "quietly" in China for OEM production, such as Armani, Louis Vuitton and other top global luxury clothing brand production line has actually settled in China and found an authorized producer.

In addition, the OEM industry in the LED industry is also widespread. According to relevant data, the percentage of LED products that are exported from China has reached over 80%. At the same time, the current model of OEM is still one of the major development models of China's LED industry. Most products of foreign famous brands such as Osram and Philips have OEM production in China.

OEM and ODM are common in LED OEM mode. Because of considerations such as manufacturing cost, convenience of transportation, and saving development time, well-known brand companies are generally willing to find OEMs or ODMs from other manufacturers. Among them, OEM is the original equipment manufacturing, commonly known as OEM; OEM is usually a brand producer does not directly produce products, but use their own key core technology responsible for the design and development of new products, control of sales channels, the specific processing tasks through the contract order The methods were commissioned by other manufacturers of similar products, and then the ordered products were purchased at a low price and were directly affixed to their own brand names. The difference between ODMs and OEMs is the participation in R&D and design of products. The characteristics are technology outside, capital outside, market outside, and only production.

With the increase of LED demand, the development line of OEMs has changed

Affected by energy conservation and emission reduction policies, the demand for global LED terminal products has risen sharply. International lighting giants, domestic brands LED manufacturers and cross-border companies, have entered the field of LED lighting, continue to expand production capacity to snatch the market, but also become the traditional lighting companies transition LED lighting, the majority of domestic LED companies to participate in global competition, one of the main ways.

In the LED industry, the initial OEM model was OEM-based, and traditional lighting companies such as NVC, Foshan Lighting and Midea all adopted OEM mode to enter the LED lighting field at the beginning, which provided OEMs with more development opportunities. . Chen Xinhua, general manager of Meditech Lighting Co., Ltd., told the author that before the establishment of the independent lighting brand, MediLight started from OEM OEM ballasts. Later, as the scale of development continued to grow, it began to help some of the industry's famous The brand manufactures OEM products such as MEDI Light's main OEM products are light sources such as LED downlights, bulb lamps and ceiling lamps. According to Chen Xinhua, companies that normally do OEM work have the strength to build channels, but in the early stages of development, they have to go out and look for manufacturers to produce. This means that what OEMs actually demand is output. In addition, according to the author's investigation, the product categories that typically make OEM products include LED home lighting and LED lighting.

With the growing strength of the company's development, the brand's influence is gradually expanding, and the requirements for doing OEM will become more and more stringent, and the OEM model will also begin to change, from OEM to ODM. Chen Xinhua told the author that in the past, OEMs and OEMs were to include production equipment and raw materials, but now some of them are involved in OEM production. According to a certain LED merchant business marketing director revealed to the author, the company has positioned LED lighting products of high, medium and low levels of three different grades, hoping to enter the market with different orientation products; but because the company itself does not have high-end Product technology manufacturing capabilities, so the company will commission manufacturers with strong technical capabilities for their OEM production of high-end LED commercial lighting products, while the company will also participate in the product design process, and OEMs together to develop products. According to the author, another company that did OEM found that the company would look at the foundry's home when they were looking for a factory. On the one hand, it was produced, and the production capacity of the foundry also had to keep up; on the other hand, It is the supervision and control of product quality to ensure quality. After all, the product is advertised as its own brand name, because if the product has a problem, all the consequences that affect the brand is the brand to bear, so the foundry's production and technical capabilities must meet the requirements.

OEMs transform their own brand development

For brands with strong financial strength, strong brand influence, advanced technology research and development, and rich experience in market operations, through the integration of products to achieve product maximization and product diversification in a short period of time. .

OEMs, on the other hand, can help brand manufacturers achieve win-win cooperation and combine brand, technology advantages with cost control and cheap labor advantages. Nowadays, in the era of controlling costs, labor costs, management costs, and product packaging costs are factors that companies consider in the manufacturing process, but cost pressures are not obvious for foundry makers. Chen Xinhua said that the pressure of foundry costs is not as great as that of self-owned brands, because OEM orders are stable and there will be advantages when purchasing raw materials. Therefore, the raw material cost of the entire production will not be too high; however, for independent brands For manufacturers, whether or not orders are reduced, but the cost of raw materials is still so high.

After the foundry house is built for other brands, the entrusted brand can sell the product with the brand influence and sell the brand package, so as to reap the benefits of high efficiency; and the foundry only gains the meager profits of the foundry, it is difficult to support The long-term development of manufacturers, only "self-reliance", and more to develop to more powerful. For example, in the LED industry, there are some foundry manufacturers with small scale and low reputation, but they are well-known brands in the industry. These factories received production orders from well-known brands and produced them. At the same time, these foundry homes also created their own brands. While branding other brands, they also developed their own brands. Foxconn, the most influential foundry factory in the world, is best at controlling large-scale production, labor costs, and material costs. Now it is also undergoing transformation, taking the path of its own brand and adopting machine-based production.

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