The Chinese LCD display industry developed rapidly in the past few years, but now the industry market is gradually saturated. At present, global economic growth is slowing down, and the Chinese economy has entered a stage of "new normal" development. The LCD display industry is entering a painful period of transformation.
Year after year, in the blink of an eye, 2015 has come to an end. Looking back at 2015, the growth rate of the LCD display industry slowed down significantly, but it also steadily increased; Driven by the innovation driven strategy, technological added value is becoming the core competitiveness of products; High value-added products represented by small spacing are becoming increasingly popular, transitioning from emphasizing technology to emphasizing product value and experience; This year, frequent mergers and acquisitions occurred in the industry, gradually becoming the norm, and the number of "premium" acquisitions increased significantly; Affected by the national macroeconomic downturn, the industry market demand is cold, and large LED enterprises are facing increasing pressure in terms of scale and profits. The survival and development space of small and medium-sized LED enterprises is further compressed; In addition, the industry is also facing problems such as insufficient concentration, overcapacity, lack of innovation awareness, disorderly competition, prevalent price wars, and continuous reshuffling and bankruptcy waves.
From the initial era of huge profits to the era of low profits, the restructuring and reshuffling of the LED display industry have become increasingly intense, and the industry landscape is undergoing significant changes.
1. There is significant downward pressure on the national macroeconomic situation
The growth rate of China's GDP has been declining since 2012, with 7.7%, 7.7%, and 7.4% in the first half of 2012, 2013, and 2014, respectively. In the first half of 2015, China's GDP grew by 7.0% year-on-year, marking the end of the average high-speed growth of around 10% in the past 30 years and the entry of the economy into a new normal.
Affected by the downward trend of the national macro economy, the application of LED displays in government projects, urban landscapes, advertising media and other fields has been somewhat impacted. When the industry market demand is cold, small and medium-sized enterprises face survival difficulties, and large enterprises face profit growth bottlenecks.
2. There are many small and medium-sized enterprises, and the industry concentration is insufficient
In the early stages of the development of China's LCD display industry, the industry had low entry barriers and profitability. Many companies seize the opportunity to enter the LED display industry; Around 2008, under the influence of the Beijing Olympics, a large number of LED display related enterprises were directly or indirectly established; In recent years, more and more traditional display companies and other companies outside the industry have extended into the field of light-emitting diode displays
At present, there are numerous enterprises in the LED electronic display industry, with no less than 1000 of them, and the market competition is extremely fierce. Although industry consolidation and mergers and acquisitions have continued in recent years, to some extent promoting industry concentration, overall, industry concentration still needs to be improved. 3. Dragging along, constantly gathering the storm - 'You Sing My Debut'
There are so-called bankruptcies every year, especially this year. Affected by the industry environment, the industry situation this year is more severe than in previous years, resulting in many shortages
Small and medium-sized LED enterprises lacking core competitiveness have collapsed one after another. Failed enterprises can usually be divided into two categories: one is enterprises with homogeneous products and shoddy manufacturing, and the other is enterprises with blind expansion and broken capital chains.
Compared to 2014, there was an increasing trend of malfunctions in the LED display industry in 2015. Based on the current industry situation, the wave of reshuffling will continue. With the continuous promotion of reshuffling, industry resources will tilt towards technology and scale advantage enterprises, and the Matthew effect of the LED display industry will be further strengthened in the future.
4. Overcapacity, bottoming out prices, and increasing corporate income do not necessarily increase profits
After years of rapid development, China's LED display industry has encountered a serious problem of disorder, namely the surplus of homogeneous products of medium and low-end. With product homogenization and overcapacity, vicious competition dominated by low prices is bound to erupt.
Whether actively engaging in price wars or being forced to engage in price wars, the profits of enterprises will inevitably shrink. It is not surprising that companies do not increase profits when product prices bottom out.
Overall, with the advancement of technology and the emergence of economies of scale, product prices are bound to decline, which is caused by technological and scale advantages and cannot be confused with vicious price wars.
5. Low innovation awareness
The trend of "shanzhai" is prevalent in the LED display industry, with some companies sticking to their own ways and not thinking ahead. The phenomenon of "shanzhai" is particularly serious. Companies that imitate whatever is popular in the market may thrive for a while, but they are definitely those that persist in innovation and research and development.
At present, the situation in the LCD display industry is severe. To gain an advantage in the fierce market competition, enterprises must enhance their core competitiveness, and the source of core competitiveness is undoubtedly closely related to innovation. Innovation can only lead development when poverty is changed, change is meaningful, and universal principles are sustainable.