In early June, the complete list of "Top 100 Chinese LED Lighting and Lighting Fixture Companies in 2017" was released, attracting widespread attention from industry professionals.

　　As is well known, the domestic LED industry has long passed its booming spring. Problems such as severe product homogeneity, fierce price wars, market stagnation, low profit margins, and rising labor and raw material costs have become increasingly prominent. Against the backdrop of major industry fluctuations, lagging productivity and management capabilities face inevitable elimination.

　　So, how have these top 100 LED companies maintained continuous revenue growth and stood out from the competition?

　　Best Management Consulting Group, which has served LED companies such as Leyard Optoelectronics, Feidiao Electric, Igor Electric, and Optoelectronics, has a comprehensive and profound understanding of this. In an interview with the founder of Best, Zhang Zhenghua, he stated: "In this ever-changing world, only those who adapt can survive. These top 100 companies are pioneers in the LED industry. They have stimulated profit growth and maintained corporate vitality through cross-border innovation, mergers and acquisitions, opening up blue oceans of applications, and upgrading internal management. Whoever can find the right direction for transformation and upgrading will have the initiative in the future market."

Giants Cross Boundaries, Opening New Territories in the Industry

Representative companies: Unilumin, Leyard, and Rayman

　　Currently, the competitive landscape of the LED industry has taken shape. Under the influence of macroeconomic factors and the weak growth of the LED industry, companies need to consider improving their sustainable profitability and explore new profit growth points. Especially for LED industry giants, cross-border upgrading and opening up new territories are essential. Implementing a dual-main or multi-main business strategy is the best way for companies to gain new profit growth points.

　　There are many such examples among the top 100 companies in 2017. Unilumin has been thriving in the digital media field, establishing LianDong Culture and acquiring companies such as Time-Sharing Media, Youtuo Public Relations, Precision Focus, and Yisida, aiming to build a large digital media group; Rayman has been implementing a dual-main business development strategy of "LED + Sports" since 2015 and participated in the establishment of the Rayman Kaixing Sports Culture Fund, indicating that Rayman will increasingly focus on the sports industry; Leyard has delved into the cultural media business, acquiring companies such as Jinda Lighting, Hulian Yida, Lifeng Culture, Jinlixian, and Pineng Optoelectronics, achieving significant results in business integration and creating a new operating model of "urban culture, tourism, and performing arts"...

　　The above examples show that whether it is cross-border expansion into sports, digital media advertising, cultural media, or financial electronics, the strategic upgrades of industry giants are based on the company's original core resources. Meanwhile, the brand of the main business remains strong.

　　For LED companies, cross-border transformation is undoubtedly tempting, but the risks of entering another field are also evident. The degree of understanding of the new market, risk resistance, and enterprise management level are all tested, so cross-border transformation mostly occurs in more mature LED companies.

Frequent Mergers and Acquisitions, Synergies Highlight

Representative companies: MLS and Unilumin

　　Entering 2017, the LED industry saw a wave of mergers and acquisitions, intensifying industry reshuffling. Some leading companies used mergers and acquisitions to enter fast-growing sectors and achieve expansion and upgrading.

　　As an LED packaging leader, MLS's acquisition actions have a global perspective. While increasing investment in its main LED packaging business, it also laid out the entire LED industry chain. By acquiring Chao Shi Dai Guangyuan, increasing investment in Kai Fa Jing Zhao Ming, and participating in the investment in Huai'an Ao Yang Shun Chang Optoelectronics, it extended the industry chain of its core business. It also acquired LEDVANCE to officially enter the international market and quickly improve its overseas market share. As the company's packaging business continues to strengthen, MLS's products will continue to develop towards high-end, branding, and internationalization.

　　In 2017, Unilumin's pace of mergers and acquisitions was astonishing, acquiring five companies in a row. By acquiring Hangzhou Boyuan and Tsinghua Kangli, it entered the landscape lighting field; by acquiring Aijia Lighting, it expanded its market share in the mid-to-high-end lighting field; by acquiring Xi He Optoelectronics, it used its existing factory buildings as its East China base to cultivate the East China market... Overall, Unilumin's frequent mergers and acquisitions were aimed at horizontal expansion around its main business, achieving remarkable results in 2017, with total operating revenue increasing by 73.33% and operating profit increasing by 90.54% compared to 2016.

　　With the fermentation of scale advantages and synergy effects in various links, the gross profit margin and net profit margin of companies expanding their business through mergers and acquisitions continued to improve, and their revenue volume reached a new level, further widening the gap with other LED companies.

Cultivating Niche Markets, Breaking Through the Red Ocean Dilemma

Representative companies: Optoelectronics and Sanan Optoelectronics

　　In 2018, the competition in the general lighting market became increasingly fierce, and traditional LED products entered a competitive "red ocean." To maintain continuous growth in corporate revenue and net profit, LED companies opened up another direction: exploring new niche markets and highlighting differentiated advantages.

　　At the recent Guangya Exhibition, niche areas such as landscape lighting, home lighting, plant lighting, and UV LED attracted much attention. Among them, the demand for landscape lighting exploded after the government proposed the construction of the night-time economy. Optoelectronics exerted force in the blue ocean of landscape lighting. Since the acquisition of Qianbaihui, a double-A-class lighting engineering company, at the end of 2016, its landscape lighting business has grown rapidly, providing a guarantee for the company's annual performance.

　　With the continuous heating up of concepts such as smart homes and smart cities, home lighting has also become extremely popular, and many companies have increased their investment in this field early on. Previously, Sanan Optoelectronics had strong brand and market advantages in professional fields such as commercial lighting and engineering lighting. In the first half of 2017, Sanan Optoelectronics officially went public and, on the basis of consolidating the commercial lighting and engineering lighting market, actively developed the home lighting market and launched the construction of an LED smart lighting production base.

Management Upgrade, Seeking Efficiency Through Refinement

Representative company: Jufei Optoelectronics

　　Under the current economic situation, if LED companies want to achieve transformation and win the market, adopting lean growth methods is another viable path. Many companies pay more attention to the direction of investment of funds and energy, how to control costs, and how to use the obtained benefits for reinvestment.

　　Among the top 100 companies, Jufei Optoelectronics is a prominent example of internal management upgrades. Continuously promoting lean management is one of Jufei Optoelectronics' core competitive advantages. The company insists on using PDCA as its management language. Through the successful launch of efficient production systems, agile supply chain systems, and marketing management systems, it further optimizes and improves the functions of its IT systems. In terms of human resource management, the management principles of focusing on goals, contributions, and results have become the guiding ideology and methods for employees' work, while creating a positive and collaborative organizational atmosphere. The "first responsible person system" strengthens employees' sense of responsibility and promotes team collaboration.

　　It is understood that last year, Jufei Optoelectronics introduced Best Management Consulting Company to launch a procurement process optimization project. By introducing Huawei's process system, procurement processes and rules were established and optimized, and the business capabilities of procurement personnel were enhanced.

　　Against the backdrop of internal management upgrades, Jufei Optoelectronics achieved total operating revenue of 2.055 billion yuan in 2017, a year-on-year increase of 36.18%.

　　Overall, in the LED industry, which is entering a mature stage of development, market competition is fierce, resulting in a diverse range of approaches. Leading companies maintain their strong advantages, actively expanding their market share and upgrading across industries; some companies use capital means to merge and integrate industrial resources, expanding their business; some companies seize the opportunity of the booming smart economy and night-time economy, cultivating niche markets and achieving significant success. Under the new economic normal, how the LED market landscape will evolve remains to be seen.