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Following the collapse of the Xiongji Lighting Factory in Zhongshan, China last year, the fall of the legend of Fengguang once again caused heated discussion in the industry. Since entering the LED field, Fengguang Legend has invited the Phoenix Legend to create momentum and build a channel brand building, from the huge momentum to the loss of the joint, just three years. In the past three years of reviving the legend of Fengguang, the reporter found that under the fierce competition of homogenization, if new enterprises entering the industry force their channel construction, they will face the resistance of traditional giants, as well as the risks of huge capital investment and less than expected results; If you do not expand the channel, you will face the danger of the market being divided. Small and medium-sized LED companies seem to be caught in the channel to find a way to find death, not to wait for death. This year, known as the LED outbreak year, the industry's prosperity continued to rise, and the performance of related listed companies increased significantly year-on-year. Replacing the dual superposition of traditional lighting and new markets has brought about a high growth in LED lighting. For the growth of the industry this year, Dou Linping, secretary-general of the China Lighting Association, said at the recent Guzhen Lighting Fair. District Bingwen, chairman of the Zhongshan Lighting Industry Association and chairman of Huayi Lighting Group, told reporters that thanks to technological advances, the price of LED lighting products has dropped by about 80 in the past five years, and the overall cost performance of most products exceeds that of traditional lighting products. Therefore, the LED market broke out. The tempting cake has also attracted various capitals, and homogenization competition is inevitable. In 1999, the total number of large and small enterprises in the ancient town was about 400. Now there are more than 20,000 lighting companies. Even if the cake is bigger, it is impossible to divide. District Bingwen said. The reporter found that relying on the complete industrial chain of China's lamp capital, the spare parts needed by the company can be easily bought, so the entry threshold is low, and the streets and alleys are lighting enterprises or workshops. Earlier, some business owners said that in the ancient town, as long as 100,000 yuan can enter, rent a factory, buy a few electric irons, hire two workers, you can start work. The reporter had seen a factory in Guzhen before. The boss had worked as a civil servant. When he was in his early 30s, he saw the LED industry profitable and started to start a business. In order to save rent, the boss opened up a small space in the relative's factory, set up two desks, soldered the parts together with a soldering iron, and then shipped them out in a box. But a lot of homogenization competition makes everyone have no money to earn. Dou Linping said that the current total output value of the LED lighting industry is about 500 billion yuan, and the number of enterprises is more than 20,000. This situation will not last long. With the completion of LED lighting to replace the traditional lighting market, it is reasonable to leave around 5,000 to 10,000 companies, which means that 50-75 companies will be ruthlessly eliminated. Fengguang legend spends 10 million subsidies. Fengguang Legend is down on channel construction and brand promotion. According to its official website, in 2012, Fengguang Legend invested 3 million yuan to sign the Phoenix Legend and invited it to become the company's brand image spokesperson. In 2013, the legendary cost of Phoenix Legend rose to about 5 million yuan. This is done entirely to make the brand and please the market. Liu Jun, director of Guangdong Guangya Lighting Research Institute, told reporters. Xiao Jin, chairman of Fengguang Legend, said that when the company develops to a certain extent, development will be restricted by various aspects, and building a brand becomes an important strategy for sustainable development of the company. He also said that building a brand is a never-ending one. Road, there is no turning back, and the scalp has to go down. The official website of Fengguang Legend was also opened on January 19, 2013, becoming a window for promoting the brand and building momentum. At the same time, Fengguang Legend has laid a large sales network. In the past 10 years, the company has built more than 800 sales outlets in the terminal market. In 2012, in just one year, it has developed nearly 1000 on the original basis. Sales outlets. On March 31, 2013, Fengguang Legend held its 10th anniversary celebration at the local Guzhen Gymnasium. According to the report of Sina Leju at the time, the company introduced that the legendary channel of Fengguang covered 70 provinces nationwide, has more than 300 core distributors, more than 1,000 distributors, and will cultivate more than 1,000 cores nationwide in the future. Dealer, 3,000 distributors. Opened 3,000 image stores and monopoly areas across the country, and let more than 50 prefecture-level markets see Fengguang legendary bus advertisements and outdoor advertisements. In fact, at present, the total number of agents in each province such as Fengguang is about 20 in the country, and there are about 50 distributors in each province. Therefore, the distributors in the country are distributed in prefecture-level cities and counties. About 100, the store propaganda has a boastful element. Li Hou (pseudonym), the general agent of Fengguang Legend Jiangsu, said. The legend of Fengguang is paved in the whole country. The subsidy for the franchise dealers before the store is 1,000 yuan per square meter, generally more than 100 square meters, the light decoration subsidy will be paid 100,000 yuan, the big dealer will give 100,000 yuan, generally The dealer must also give a 50,000 yuan. Gu Baoqiang, the operation of Meijuya Lighting Co., Ltd. in Zhongshan City, said that hundreds of subsidies for hundreds of dealers should be tens of millions of yuan. Li Hou also said that Fengguang’s legend in the laying of channels is mainly due to singing expenses, advertising promotion costs, material display cabinets and renovation costs. Perhaps in order to give dealers confidence, Fengguang Legend's many provincial dealer conferences are arranged in five-star hotels, each with a cost of two or three hundred thousand. The most important issue in channel construction is capital investment. Enterprises that have entered LEDs have no core competitiveness. By taking traditional sales channels and continuing to build a large number of warehousing logistics and laying channels, they will inevitably invest a lot of money. If they are not listed companies, they will generally bear Without such a large capital investment, this method is more dangerous. Shao Shibin, director of the O2O project of Chau Ming Technology, said. It is difficult to enter the traditional channel. At present, the domestic LED lighting enterprise business mainly sells through engineering channels and dealer channels, but for the latter entrants, the input and output in these traditional channels are gradually disproportionate. Traditional lighting companies such as NVC Lighting, Op Lighting and Sanxiong Aurora, etc., their huge terminal sales and brand influence stem from having a distribution network throughout the country. For example, NVC Lighting has 37 operating centers and more than 3,000 specialty stores nationwide. It is recognized in the industry that the channel is the best in the industry. Many companies entering the LED field hope to promote the sales performance in the traditional sales channel. The fall of the Fengguang legend is precisely the way to copy the channels of traditional lighting companies such as NVC lighting to expand the country, and finally collapse due to the break of the capital chain. Channel construction, the newly entered LED companies can hardly break the channel pattern of the traditional lighting industry, and the game problems between manufacturers and dealers are also difficult to break through. Gu Baoqiang, the owner of Zhongshan Meiju Lighting Co., Ltd., said. NVC Lighting and other companies have accumulated nearly 20 years in the channel field. They have cooperated with large-scale dealers nationwide for many years and have developed many channel rules. The newly entered LED companies generally dig their dealers, but it is difficult to shake. . Distributors with annual sales of tens of millions or even hundreds of millions of yuan have represented many traditional product brands and are not out of stock at all. Gu Baoqiang said that the newly entered LED companies have no visibility. To enter the channel, large distributors will raise the threshold and will impose harsh conditions such as distribution and subsidies. The traditional lighting sales channels are controlled by the original giants, and if new LED companies rush to expand, they need to invest a lot of money, and even fail to achieve the expected results. If they do not expand the channels, it means that the cakes are gradually being taken away. LED companies in the channel seems to be caught in the dilemma of doing dead, not waiting to die. Industry people: Product quality is the fundamental reason why traditional channels will become a difficult bone for LED companies? Is there a new way to break through? The traditional channels are controlled by giants such as NVC, and it is not a matter of time for new entrants to change. It is necessary to try new ways to break through. Shao Shibin said. The new way he said refers to the O2O sales model. In 2013, Chau Ming Technology began to build an online platform for offline services, and opened up new distribution channels for dealers through online orders and offline shipments. At the same time, through the mobile phone application, product animation, micro-movie, Weibo, WeChat and other media communication channels to quickly achieve brand communication. In this mode, the company's offline store has very little investment, only one signage fee. Offline stores are mainly used for consumer experience. The company will drop a TV terminal online and direct the passenger flow from the offline to the online through the terminal. There is almost no problem with product inventory. Especially in the LED field, there is currently no mature channel construction model that can be imitated, and can only be explored, giving priority to the background construction and layout. At present, the main sales model of Guzhen lighting products is the commercial real estate hypermarket model. The following floors are used as stores, and the above are star-rated hotels. E-commerce has indeed brought impact to these traditional sales methods. District Bingwen said. For small and medium-sized enterprises, the channels are really burning in the early stage. Enterprises without capital strength can choose to cooperate with large enterprises. After the capital strength, they gradually develop sales channels and e-commerce channels. District Bingwen said. However, e-commerce can not match all products. Traditional specialty stores still play the role of factory enterprise windows, especially some high-end products. Many purchasers will personally visit and compare in the store, which is not comparable to e-commerce. District Bingwen said. Therefore, in terms of channel development, District Bingwen suggested that small and medium-sized LED companies walk on multiple legs and gradually expand engineering channels, retail channels and e-commerce channels while ensuring stable revenue. Gu Baoqiang, the owner of Zhongshan Meiya Lighting Co., Ltd., who has many years of experience in channel construction, also believes that the most fundamental way out for manufacturing companies is to achieve a brand. The strong brand of the factory is its core competitiveness. It is necessary to study the manufacturing process, materials and design of the products, extract these unique things, show them to customers, customers trust you, natural orders come, because the brand is Product decided. District Bingwen also strongly endorsed the product development before the development of the channel. Brands do not have good quality support, and the best channels are futile. For example, Qinchi Winery, his channel and brand were very loud in the past, but the quality of the products was not good, and finally he could not escape the fate of falling. District Bingwen said.