[Source: Gaogong LED's "LED Lighting Channel" Magazine No. 5 (Total Issue 41) Reporter / Li Jingyu]
The most direct benefit of the LED e-commerce model is to bring about a shortened channel chain, which helps companies to save product circulation costs and convert them into price advantages, thereby expanding sales demand and enhancing product competitiveness.
OTT is the abbreviation of “Over The Topâ€. The Chinese meaning “over-the-top pass†is a very popular term in the communication industry. It refers to the terminal application of Internet companies to develop various data services across operators.
If you refer it to the current hot LED industry, there are some commonalities. LED lighting manufacturers use e-commerce platforms to sell products directly to consumers beyond traditional channels such as dealers and agents.
The most direct benefit of the LED e-commerce model is to bring about a shortened channel chain, which helps companies to save product circulation costs and convert them into price advantages, thereby expanding sales demand and enhancing product competitiveness.
In recent years, Philips, Samsung, Tsinghua Tongfang, Op Lighting, and other well-known lighting companies at home and abroad, as well as GE Lighting and NVC Lighting, which have recently announced the layout of e-commerce channels, have tried the water and electricity platform. This new sales model is more attractive to LED lighting manufacturers who are looking for channel transformation.
New and old channel dispute
It is undeniable that from the perspective of the entire lighting market, the rise of e-commerce will inevitably impact the traditional channels. The impact depends on the current market maturity of LED e-commerce.
The recent "WeChat charging" incident on the Internet is because the rise of OTT applications such as WeChat has squeezed the interests of traditional operators, resulting in WeChat being jointly "cracked" by mobile, China Unicom and telecommunications operators.
At present, LED e-commerce is in its infancy, and it does not pose a big threat to traditional distribution channels. Therefore, it has not caused the traditional dealers to rebound too much for e-commerce. However, in the long run, as LED e-commerce gradually grows bigger and stronger, it will inevitably threaten the vested interests of traditional channels.
The sound of the industry's singer-selling e-commerce model is endless, such as poor user experience, poor service system, and no guarantee after sale. For those lighting manufacturers that have traditional distribution networks and are beginning to focus on e-commerce channels, they must consider how to coordinate the relationship between the two and avoid the emergence of new and old channel disputes.
According to industry sources, "currently, the products on the e-commerce are mainly based on single-product retail, and the price is very competitive. When it comes to system-based lighting product solutions, there are still many technicalities in the e-commerce sales model. The obstacles. In addition, the LED lighting consumer market is not yet mature, so this part of the market in the entire lighting market accounted for a small proportion."
In addition, LED e-commerce can not be completely separated from the traditional channels. Many LED e-commerce companies are not directly formed by the production companies, they either pick up the goods from the producers or supply them by the brand's agents, and the relationship itself is a traditional distribution relationship, which is influenced by traditional channels.
Under the evolution of this system, on the one hand, traditional dealers will gradually be in a weak position in product pricing, making it a pure "transportation pipeline" and unable to capture the maximum value in pipeline transmission. On the other hand, many goods are provided by third-party merchants. After the user places an order on the website, the goods are directly delivered by the merchant, and the quality of the product is difficult to control.
Self-operated or platform
"At present, the entire e-commerce sector, after all, Taobao accounted for 70%-80%, and some categories accounted for more market share. If we want to cut into these market areas, Taobao is definitely the first choice. If enterprises want to start e-commerce, Undoubtedly, it starts with Taobao.†Zhang Yafeng, marketing director of Huayi Lighting Plaza, said that other platforms are not useless, but if there is no clear positioning and clear strategic planning, it is now equivalent to find death.
"At present, most of the e-commerce models commonly used by LED lighting companies are integrated e-commerce platforms such as Tmall and JD.com, as well as professional e-commerce platforms for home and LED lamps. The smaller part is self-built malls." Wu Yulin, president of Foshan Lighting Association, said.
For most LED lighting manufacturers, the e-commerce model is a new concept. Due to the lack of e-commerce operating experience, most companies do not dare to build their own e-commerce platform, or prefer to choose a more mature Tmall, Jingdong and other shopping malls serve as their own e-commerce base. At present, the resident fee for Jingdong Mall is 6,000 yuan/year, and the deposit is 50,000 yuan; the cost of Tmall is 20,000 yuan/year, and the deposit is 100,000 yuan. There is not much money for lighting companies. threshold.
There are also many objections in the industry regarding the choice of third-party e-commerce platforms. "In Taobao and other shopping malls, companies need to deliver a lot of management and promotion costs to third-party trading platforms, while LED products sold online are often low-priced products, and the average profit margin of products sold online is not high." In addition, the strict supervision measures of the third-party e-commerce platform on the settled enterprises have also affected the enthusiasm of many LED lighting companies.
In order to seek greater autonomy, many LED companies have built their own e-commerce platforms and launched independent B2C websites or online flagship stores. However, self-built e-commerce platform will inevitably encounter many problems from capital, technology and experience. For the current LED e-commerce field where talent is not good, it is hard to imagine the difficulty of success.
As a result, some companies have designed their online trading platform to use as an image display and collect customer information, and to get in touch with customers and then conduct online bulk transactions. This is far from the actual e-commerce model.
“For e-commerce, traffic is king. No traffic is empty talk.†Zhang Yafeng said, “In terms of fishing, the first is traffic, how to attract fish to your nest; the second is conversion rate. How to get your bait into your nest and start eating your bait instead of swimming in your nest, which is related to the consistency, residue and drift of the bait."
From the perspective of promotion effect, the well-known e-commerce platform represented by Taobao and Jingdong has a larger customer base than the self-built e-commerce platform of the lighting enterprise, and the customer viscosity is also higher. After all, e-commerce is a store, and the “big and complete†pattern has always been popular among consumers.
If LED companies do their own e-commerce platform alone and only sell their own products, the appeal to consumers is obviously not enough.
From the development trend of e-commerce, whether it is a horizontal e-commerce with a wide product line or a vertical e-commerce focusing on market segments, the integration capability of products and data is further strengthened.
LED e-commerce should naturally follow this trend, subdivide and integrate products, and strengthen data collection and analysis.
The most direct benefit of the LED e-commerce model is to bring about a shortened channel chain, which helps companies to save product circulation costs and convert them into price advantages, thereby expanding sales demand and enhancing product competitiveness.
OTT is the abbreviation of “Over The Topâ€. The Chinese meaning “over-the-top pass†is a very popular term in the communication industry. It refers to the terminal application of Internet companies to develop various data services across operators.
If you refer it to the current hot LED industry, there are some commonalities. LED lighting manufacturers use e-commerce platforms to sell products directly to consumers beyond traditional channels such as dealers and agents.
The most direct benefit of the LED e-commerce model is to bring about a shortened channel chain, which helps companies to save product circulation costs and convert them into price advantages, thereby expanding sales demand and enhancing product competitiveness.
In recent years, Philips, Samsung, Tsinghua Tongfang, Op Lighting, and other well-known lighting companies at home and abroad, as well as GE Lighting and NVC Lighting, which have recently announced the layout of e-commerce channels, have tried the water and electricity platform. This new sales model is more attractive to LED lighting manufacturers who are looking for channel transformation.
New and old channel dispute
It is undeniable that from the perspective of the entire lighting market, the rise of e-commerce will inevitably impact the traditional channels. The impact depends on the current market maturity of LED e-commerce.
The recent "WeChat charging" incident on the Internet is because the rise of OTT applications such as WeChat has squeezed the interests of traditional operators, resulting in WeChat being jointly "cracked" by mobile, China Unicom and telecommunications operators.
At present, LED e-commerce is in its infancy, and it does not pose a big threat to traditional distribution channels. Therefore, it has not caused the traditional dealers to rebound too much for e-commerce. However, in the long run, as LED e-commerce gradually grows bigger and stronger, it will inevitably threaten the vested interests of traditional channels.
The sound of the industry's singer-selling e-commerce model is endless, such as poor user experience, poor service system, and no guarantee after sale. For those lighting manufacturers that have traditional distribution networks and are beginning to focus on e-commerce channels, they must consider how to coordinate the relationship between the two and avoid the emergence of new and old channel disputes.
According to industry sources, "currently, the products on the e-commerce are mainly based on single-product retail, and the price is very competitive. When it comes to system-based lighting product solutions, there are still many technicalities in the e-commerce sales model. The obstacles. In addition, the LED lighting consumer market is not yet mature, so this part of the market in the entire lighting market accounted for a small proportion."
In addition, LED e-commerce can not be completely separated from the traditional channels. Many LED e-commerce companies are not directly formed by the production companies, they either pick up the goods from the producers or supply them by the brand's agents, and the relationship itself is a traditional distribution relationship, which is influenced by traditional channels.
Under the evolution of this system, on the one hand, traditional dealers will gradually be in a weak position in product pricing, making it a pure "transportation pipeline" and unable to capture the maximum value in pipeline transmission. On the other hand, many goods are provided by third-party merchants. After the user places an order on the website, the goods are directly delivered by the merchant, and the quality of the product is difficult to control.
Self-operated or platform
"At present, the entire e-commerce sector, after all, Taobao accounted for 70%-80%, and some categories accounted for more market share. If we want to cut into these market areas, Taobao is definitely the first choice. If enterprises want to start e-commerce, Undoubtedly, it starts with Taobao.†Zhang Yafeng, marketing director of Huayi Lighting Plaza, said that other platforms are not useless, but if there is no clear positioning and clear strategic planning, it is now equivalent to find death.
"At present, most of the e-commerce models commonly used by LED lighting companies are integrated e-commerce platforms such as Tmall and JD.com, as well as professional e-commerce platforms for home and LED lamps. The smaller part is self-built malls." Wu Yulin, president of Foshan Lighting Association, said.
For most LED lighting manufacturers, the e-commerce model is a new concept. Due to the lack of e-commerce operating experience, most companies do not dare to build their own e-commerce platform, or prefer to choose a more mature Tmall, Jingdong and other shopping malls serve as their own e-commerce base. At present, the resident fee for Jingdong Mall is 6,000 yuan/year, and the deposit is 50,000 yuan; the cost of Tmall is 20,000 yuan/year, and the deposit is 100,000 yuan. There is not much money for lighting companies. threshold.
There are also many objections in the industry regarding the choice of third-party e-commerce platforms. "In Taobao and other shopping malls, companies need to deliver a lot of management and promotion costs to third-party trading platforms, while LED products sold online are often low-priced products, and the average profit margin of products sold online is not high." In addition, the strict supervision measures of the third-party e-commerce platform on the settled enterprises have also affected the enthusiasm of many LED lighting companies.
In order to seek greater autonomy, many LED companies have built their own e-commerce platforms and launched independent B2C websites or online flagship stores. However, self-built e-commerce platform will inevitably encounter many problems from capital, technology and experience. For the current LED e-commerce field where talent is not good, it is hard to imagine the difficulty of success.
As a result, some companies have designed their online trading platform to use as an image display and collect customer information, and to get in touch with customers and then conduct online bulk transactions. This is far from the actual e-commerce model.
“For e-commerce, traffic is king. No traffic is empty talk.†Zhang Yafeng said, “In terms of fishing, the first is traffic, how to attract fish to your nest; the second is conversion rate. How to get your bait into your nest and start eating your bait instead of swimming in your nest, which is related to the consistency, residue and drift of the bait."
From the perspective of promotion effect, the well-known e-commerce platform represented by Taobao and Jingdong has a larger customer base than the self-built e-commerce platform of the lighting enterprise, and the customer viscosity is also higher. After all, e-commerce is a store, and the “big and complete†pattern has always been popular among consumers.
If LED companies do their own e-commerce platform alone and only sell their own products, the appeal to consumers is obviously not enough.
From the development trend of e-commerce, whether it is a horizontal e-commerce with a wide product line or a vertical e-commerce focusing on market segments, the integration capability of products and data is further strengthened.
LED e-commerce should naturally follow this trend, subdivide and integrate products, and strengthen data collection and analysis.
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