China-US Trade War Begins: How Can the Lighting Brands Open up Multi-channel?
On July 6, the United States began to impose a 25% tariff on $34 billion worth of Chinese goods, implying that China-US trade war was officially launched.
In fact, as early as March, the Trump administration has announced that “the $50 billion tariff is imposed on Chinese goods due to intellectual property infringement and investment restrictions are implemented”; in early April, based on the results of the “301 Survey”, the Office of the US Trade Representative imposed a 25% tariff on $50 billion worth of China’s exports to the United States, including 1,333 items in aerospace, information and communications technology, robotics and machinery industries. However, the main products of the lighting industry are not covered in the list.
China-US Trade War Begins, Channel Diversification Becomes Brands Standard
The lighting products involved in this list are mainly industrial intermediate products, including chips and backlight products. Although these products account for low proportion in China’s lighting industry exports to the United States market, still the U.S. is one of the biggest importers of Chinese lighting products.
According to the data from third-party organizations, Europe, North America, and Asia are still the three main markets for the export of lighting products in China. In February 2018, they accounted for 32%, 30%, and 24% respectively. In the China-US trade war, new materials are the main areas, which will definitely affect the development and export of innovative lighting in China.
At the same time, the impact on the whole industry is the sharp depreciation of the US dollar since 2017. The exchange rate loss of many enterprises is equivalent to the evaporation of annual profits. The U.S. Trump administration aims to enhance the competitiveness of the manufacturing industry and strengthen the export protection policy. The U.S. dollar will continue to be weak in the future.
The leaders of many lighting companies have said: “the most important thing in dealing with the China-US trade war is to strengthen our research and development capabilities, open up and diversify sales channels, and sell products to the world.”
According to the data from China Association of Lighting Industry, in the first quarter of 2018, the export of lighting products continued to rebound, with a year-on-year growth of 10.38%. Traditional lighting products continued to decline, with fluorescent lamps and HID products falling by a large margin; LED replacement light sources increased by a large margin, reaching 78.29%; another export growth driving force is fixed lamps and portable lamps, reflecting the gradual recovery of international market demand.
It can be seen that the demand for Chinese lighting products in the global market is increasing day by day. And Zhongshan City has also become the first export quality and safety demonstration area in Guangdong Province. The industrial cluster advantage of Guzhen town (original source of lighting) will be further enhanced.
Many enterprise leaders who have many years’ experience in exporting also make suggestions: it is necessary to adopt some active methods to buffer and mitigate risks. For example, foreign exchange adjustment can be used to offset the risk of exchange rate fluctuations, and forward contracts can be used to reduce the price fluctuation of import and export goods. Other methods include hedging with futures options, locking the cost of related raw materials, etc.
China (Guzhen) International Lighting Fair Will Help Enterprises Open up the World Market with Huge Investiment in Global Publicity and Promotion
To enhance research and development strength is certainly a necessary condition for alleviating the adverse impact of China-US trade war. It is also a top priority to utilize the platform with global marketing promotion and sales capabilities to develop multiple channels.
Since 1999, China (Guzhen) International Lighting Fair, which relies on the 100 billion industrial resources of China’s lighting capital–Guzhen town, has been helping Chinese lighting companies to deepen the international market and recommend more brands to buyers around the world. The 21st GILF received a total of 100,000 overseas businessmen from 6 continents and 120+ countries and regions. More than 90% of overseas buyers expressed satisfaction with the quality and scale of the exhibition.
In recent years, the GILF has invested much money in global publicity and promotion. It develops multi-channel publicity by combining online and offline promotion. The publicity is mainly organized by professional media and supplemented by mass media. And it searches for cooperation and overseas buyers with global lighting exhibitions such as Thailand International LED Lighting Exhibition and Vietnam International Lighting Exhibition.
The GILF also cooperates with PR-Newswire, Mondo Arc of the United Kingdom, Lightecture of Spain, Enlightenment of the United States, LEDs Magazine and other well-known media to carry out all-round multi-angle overseas promotion. And through Google Adwords, Facebook, and LinkedIn, the promotion covers many lighting professional areas in Asia, Europe, America, Africa and Oceania.
It is learned that the 22nd GILF (Autumn) will focus on overseas sales, leading China’s lighting enterprises to international market and providing a broader business and trade cooperation platform for professional audiences around the world. At the same time, the fair also considers domestic sales. A communication platform is provided to masters of the lighting industry, professional buyers and designers.
The GILF has always offered considerate services for overseas buyers who have come to China for exhibition. They can take free shuttle bus to the exhibition hall after getting off the plane. Professional translation, lounge for overseas buyers, luggage storage, free Wi-Fi are available in the exhibition. And for high-quality overseas buyers, we will hold a global buyer procurement exhibition to match buyers and sellers professionally and will also provide other services such as free accommodation.
In the meanwhile, the fair will adopt the Internet + exhibition mode. Buyers can easily find counterpart exhibitors in the professional B2B platform–the exhibitor inquiry system of DENGGLE.COM, thereby increasing business opportunities.
In the short term, the possible continued escalation of China-US trade war will have an impact on the lighting brands’ entrance to the North American market. However, in the long run, if they can enhance their own strength, and at the same time utilize a strong exhibition platform to develop international multi-channels, they can achieve their global strategic layout.