The adjustment of the LED industry and the rise of e-commerce have brought huge impact on the stores of Zhongshan Town, the “China Light Capitalâ€.
It is understood that this year, the performance of leading lighting companies such as NVC Lighting (02222, HK) and Foshan Lighting (000541, SZ) has dropped sharply year-on-year. The exit from high-end stores to reduce rents has become a response strategy for many companies to reduce costs and increase efficiency. This directly led to the increasingly deserted stores in Zhongshan Guzhen, and had to reduce rents. For example, the “Star Alliance†stores, their LED professional store rents were basically reduced to less than 100 yuan per square meter, and some shops were slightly more square meters. Only need 35 yuan.
Some insiders also said that in addition to lighting companies to reduce the cost of exiting the store, the rise of e-commerce has also impacted traditional marketing channels, and many companies can also receive orders through the network.
Hypermarket rent
On December 1st, the reporter of "Daily Economic News" in the field study of Zhongshan Guzhen found that the rents of most hypermarkets showed a 40% to 50% decline year-on-year, and a large number of shops on the street hang out notices of closing the rent.
At the beginning of November this year, it opened in June 2013 and attracted the Taikoo Lighting Plaza, which included more than 160 lighting brands including Changfang Lighting (300301, SZ). It was closed shortly after the closing of the Guzhen Light Fair.
“In November this year, after the contract expired, the second landlord Taikoo Property terminated the lease contract in the village here, and did not do the store business. Most of these settled merchants moved away.†The security of Taikoo Lighting Plaza "The Economic News" reporter said, "There are two merchants on the first floor, two on the second floor, and only one on the third floor."
Chen Shengxing, the head of Zhongshan Xingzhi Lighting Store, who is still sticking to the first floor, told reporters that "this year's lighting market is very poor. We can all withdraw the stores from the lighting manufacturers, reducing costs and labor costs. I know one has The strength of the merchants combined three stores into one to reduce costs."
Chen Shengxing said, "Our business is not doing well. These stores are also under pressure. They are directly withdrawn without lowering the rent. In order to stabilize the merchants, many stores have reduced rents. My shop has been lowered from 110 yuan per square meter. At 70 yuan, 8 of the 10 shops on the street are now sublet."
In addition to the closed Taikoo Lighting Plaza, other hypermarkets are also offering substantial discounts. Zhongshan Star Town's largest store, "Star Alliance" settled in Zhongshan City, Wilo Lighting Technology Co., Ltd. Xie Shaochun told reporters, "My position here is slightly biased. Last year, when the Star Alliance opened, it was 145 yuan per square meter, and now it is 35 yuan."
Even in the ancient town of Zhongshan, the location of the Times Square, which has a superior geographical position and a long time, has to reduce rents to retain customers.
“The rent of Times Square is the most expensive in the ancient town. The rental contract on our side has risen to 450 yuan per square meter last year. This year’s business is difficult to do, reflecting many times before it has dropped to 280 yuan per square meter, but This price is still very high." Ye Zhiyan, Zhongshan Dingkun Lighting Co., Ltd., who was stationed in Times Square, told reporters.
The Galaxy Lighting Plaza next to the Times Square in Lamps Square also carried out the action of rent reduction to retain customers. "Last year, 400 yuan per square meter, this year is about 200 yuan per square meter, basically the price adjustment in June this year, the decline of each store is basically 40% ~ 50%." Entering the Galaxy Lighting Plaza Zhongshan City Jingtian Technology Lighting The store manager said.
Declining performance, e-commerce shock
The industry believes that the sharp decline in lighting companies' performance and the impact of e-commerce have made the survival of traditional lighting hypermarkets challenging.
"When the annual light fair was held, the lighting stores were very hot, but this year was very depressed. Orders have been reduced a lot this year. The business is too weak. If we can't survive, the store will definitely not survive." Zhongshan Jingtian Technology The store manager of Lighting Co., Ltd. said, “The reduction in rent this year is the first time this has happened in recent years, and the business is too weak.â€
The above-mentioned store manager said that the business of the giants Foshan Lighting and NVC Lighting has fallen sharply. Foshan Lighting achieved revenue of 2.232 billion yuan in the first three quarters of this year, down 5.25% year-on-year; net profit attributable to shareholders of listed companies was 73.435 million yuan, down 75.58% year-on-year; while NVC Lighting was also not optimistic, with total operating income of 17.72 in the first half of the year. 100 million yuan, an increase of 4.1%, attributable to the net profit attributable to owners of the parent company was 17.07 million yuan, a decline of 70.6%.
At the same time, with the penetration of “Internet++†in the lighting industry, more and more lighting companies have settled in e-commerce and reduced operating costs.
“Business is difficult to do, merchants are asking for rent reduction. On the one hand, online e-commerce sales are also an impact. Many lighting sellers are opening stores in Taobao and Tmall, including large companies such as Op Lighting and Huayi Lighting, which are sold online. There is one more channel." Chen Shengxing said, "Electronics do not need to pay water and electricity bills, nor do they need to recruit salespersons at the store. The cost is much cheaper than the store."
Opal Lighting also stated in its IPO pre-disclosure draft that the rise of e-commerce in recent years has already impacted traditional marketing channels. Although there are more than 38,000 dealer outlets nationwide, Op Lighting still hopes to raise funds to increase e-commerce channels. Drive sales and branding.
A member of the China Merchants Department of the Star Alliance store told reporters that the departments are busy now. Although these conditions are true, the relevant data is not convenient to disclose now, and it is not convenient for interviews. "Now we are all transforming and using new solutions. Transform the mall to attract customers."
Subsequently, the above-mentioned Merchants Department staff asked the reporter to contact Miss Feng, the marketing propaganda department, and gave a phone call. However, after the reporter called Ms. Feng, she said that the Star Alliance Alliance’s external publicity business was not responsible for her. She used the business on the store side. I didn't know much about it and refused to interview the reporter.
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