The LED industry is in a rapidly expanding phase, and all these indicate “winter is coming” in the LED lighting industry. However, not all manufacturers are capable of defending themselves against the “cold” and some have resorted to “selfish” measures.
According to a report, every year there are escaping Chinese LED manufacturers, but this has become an ongoing trend in 2014. Industry insiders said that this is related to the easing domestic economic market, and slowdown in the real estate market leading to diminishing construction projects.
Runaway LED company executives that “made a run for it” were concentrated in Guangdong province, China. Since Jan., the “runaway” tide spread throughout 2014, and peaked during May, June, Sept. and Oct. Most missing manufacturers went into hiding because of financial issues. Several of the manufacturers were heavily indebted, and had broken finances. In addition, as product quality drops, manufacturers wrong market positioning was also the main factor behind insolvencies and market elimination.
Victims of the runaway manufacturers are their large network of suppliers, dealers, and employees. Currently, Chinese lighting industry is still stuck in the quagmire of oversupply. Suppliers and distributors need to react rationally to these changes.