Competitors Snatch NVC Lighting Distributors During Company Crisis

News Source: 
Yangcheng Evening News Digital Media

Bitter conflicts between NVC Lighting former CEO Wu Changjiang and current CEO Wang Donglei might have come to an end, but another battle front has begun in the Chinese LED industry, according to a report from Chinese-language Yangcheng Evening News Digital Media.

When NVC Lighting was embroiled in internal conflicts, competitors including Kingsun Optoelectronics (Kingsun) took advantage of the situation and started to acquire former NVC Lighting distributors. Opple Lighting (Opple), PAK and other rivals have quickly acquired market shares during this time period. Competitors have been able to overtake NVC Lighting during its internal strife, which will bring new changes in China’s LED industry.

Competitors headhunt NVC Lighting distributors

Wu’s management team has to go, or it will be impossible to change destructive company business model and interests that will continue to decimate the company’s market value, said Wang. However, clearing out Wu’s team would trigger a negative chain reaction. As the power struggle between Wu and Wang continues, it will take a while before NVC Lighting operations and distribution system return to norm.

With intense competition in China’s LED industry retail channel competition over the last two years, the ongoing NVC Lighting conflict will create long-term damages. Kingsun vowed to “do whatever it takes” to acquire former NVC Lighting distributors and managers during a recent meeting. In 2013, Kingsun demonstrated its ambition in the distribution sector with the announcement of establishing 1,000 exclusive retail stores.

Since NVC Lighting sunk into infighting in 2012, the company’s traditional competitors Opple and PAK have benefited the most. The three companies have been industry leaders all along, but NVC Lighting’s instability in the last two years has given others the opportunity to pick up and excel it, said industry insiders. NVC Lighting will lose its market position if it fails to adjust.

PAK has established more than 1,200 exclusive retail stores during early 2014 to August 2014, and currently has more than 3,000 shops. Although, Opple and PAK representatives have denied quickly deploying business strategies during NVC Lighting’s conflict, objectively these rivals have been acquiring market share.

The Chinese lighting industry has entered a stage where formidable foes are all competing in the same market, yet internal strife has cost NVC Lighting development opportunities, said Wu.

Industry layout or restructure

After rapid developments in the last few years, the lighting industry has entered a transitional phase from conventional lighting to LED. Accompanying high growth rates, market competition has intensified in the LED industry. The Chinese LED industry can be classified into two major camps, the older lighting brands NVC Lighting and PAK, and emerging LED manufacturers Kingsun and Changfang. Kingsun and other emerging manufacturers still fall short in branding and distribution channels, while conventional lighting manufacturers have advantages in branding, distribution channels, and after sales services.

“Lighting manufacturers are fighting over resources including time, distribution channels, and clients”, said a lighting industry insider. LED upstream manufacturers have basically completed restructuring, and now it is the downstream turn with NVC Lighting, PAK and Kingsun.

Will PAK and Kingsun beat NVC Lighting to the game, or will emerging manufacturers quickly rise among the ranks? All these require further market observations.

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