1. General situation:
In September 2020, the export value of China's lighting industry was US$5.113 billion, a year-on-year increase of 44.18%. It recorded the largest year-on-year increase in a single month this year. Since June, it has achieved double-digit growth for four consecutive months. Among them, the export value of LED lighting products was 3.4 billion U.S. dollars, a year-on-year increase of 40.5%. Since May, there have been five consecutive monthly growths, of which four consecutive single months have achieved double-digit growth since June.
From January to September 2020, the total export value of China's lighting industry was 35.423 billion U.S. dollars, an increase of 5.70% year-on-year. Among them, the cumulative export value of LED lighting products from January to September was 23.46 billion US dollars, a year-on-year increase of 5.45%. The upward trend is obvious.
On a monthly basis, January 2020 is still normal, but after the domestic epidemic dropped to the bottom in February, since March, the overall lighting exports have recovered significantly, and the decline in the three to five months continued to narrow until June to September. It achieved double-digit positive growth for four consecutive months. The overall situation is basically consistent with the shipping industry's "resumption of work in March, no cargo in April, ship cuts in May and June, price hikes in July, lack of containers in August, and cabin bursts in September."
In terms of quarters, the overall lighting exports showed a trend of "a bleak in the first quarter, a recovery in the second quarter and striving for the third quarter". It is judged that the momentum of the fourth quarter will be slightly lower than that of the third quarter, but with the good foundation laid in the second and third quarters, it will be a highly probable event that exports will achieve positive growth throughout the year and the total export volume will hit a record high.
According to data from the General Administration of Customs, my country’s export volume of goods trade in September was 1.66 trillion yuan, an increase of 8.7% year-on-year, and the growth rate was slightly slower than the previous two months; it was USD 239.8 billion, an increase of 9.9% year-on-year. A slight increase of 0.4% per month. It is worth mentioning that imports have turned from negative to positive for the first time this year, and the month-on-year growth rate in September increased sharply to 13.2%. From January to September, my country’s total exports of goods trade totaled 12.71 trillion yuan. After turning negative to positive last month, the growth expanded to 1.8% year-on-year; it was priced at US$1.81 trillion, down 0.8% year-on-year, and the rate of decline was higher. The month continued to narrow, with a decrease of 1.5%. As a result, the export performance of the lighting industry has led the market for three consecutive months since July.
One reason for the slight decline in growth rate is the increase in the exchange rate of the RMB against the US dollar; the other is that the growth rate of anti-epidemic items as an export boost has slowed down, and its role in pulling the overall export has weakened; and the other is that as overseas countries resume work Although production resumes, the margin of external demand has been further improved, but at the same time, the significant increase in the proportion of Chinese manufacturing in global exports caused by the stagnation of overseas production has gradually returned to normal.
2. Discussion on the reasons for growth:
On the whole, although the lighting export data in September fell slightly compared with the previous two months, it still maintained a considerable growth rate with the hard work of the majority of lighting export companies. This also made the export performance in the first three quarters greatly exceeded market expectations.
The reasons for the analysis of growth are:
1. The negative pull of general lighting products is lower than expected, reflecting the rigid demand and resilience of lighting products in national social and economic life, and China's unshakable status as a global lighting manufacturing center and supply chain hub;
2. The overseas epidemic situation continues one after another. The export of epidemic prevention and housing economy-related products maintains a growth trend, which has a certain boost to overall exports. In particular, lighting products related to epidemic prevention such as scientific research, medical lamps, ultraviolet lamps, and plant lighting products have grown substantially.
3. The backlog of orders in the early stage has entered the later stage of implementation, but the major economies in Europe and the United States are under pressure to restart their economies, the margin of external demand has improved significantly, and new orders have gradually recovered;
4. The "replacement transfer effect" is significant. China is one of the few major economies that has fully contained the epidemic. The resumption of work and production leads the world. The rapid recovery of Chinese manufacturing has further highlighted the advantages of production and supply chains, effectively making up for the global supply gap caused by the epidemic, and in the short term It replaced the export share of other countries, prompting a considerable amount of overseas demand to shift to China in stages.
According to research data from relevant institutions, as of the second quarter of this year, China has reached a 17.2% share in the global export market, a record high. In contrast, according to WTO data, China accounted for 13.3% of the global export market in 2019.
3. Export products:
01LED light source prices continue to decline:
It is worth noting that the average export price of LED light sources has continued the downward trend in the past two years, and with the increase in the price of fluorescent light source products this year, there has even been an inversion of the average export price between the two. It should be seen that some companies have taken the cost of profit to seize market share or retain hope of survival when facing the challenges of the epidemic and industry competition.
02The shipment volume of LED filament lamps increased:
At present, monthly shipments are as high as 50 million, a 40-50% increase compared to the same period last year, and there have been companies with monthly shipments of more than 10 million.
03 The export of epidemic prevention products soared:
In the first three quarters, related scientific research, medical lamps, ultraviolet lamps and other anti-epidemic related lighting products ushered in explosive growth in the context of the global epidemic caused overwhelming demand. In the first three quarters, the export of related products reached 386 million US dollars, an increase of 520% year-on-year.
04. The rapid development of plant lighting:
Promoted by multiple factors such as the legalization of cannabis in North America, the shortage of food and medical supplies and the increase in home isolation caused by the global new crown epidemic, the export of plant lighting in the first three quarters increased by more than 5 times year-on-year, and the North American market is still the largest. More than 70% of the share.
05 The overall situation of consumer products is better than that of engineering products:
Consumer-related products have stronger rigid demand attributes, and the stagnation or delay of overseas projects caused by the epidemic directly affected engineering-side products.
Fourth, the export destination market:
From the perspective of global LED lighting exports in the first three quarters, the Asia-Pacific market dominated by emerging economies performed significantly better than the European and American markets dominated by developed economies. In the Asia-Pacific market, East Asia, West Asia, Southeast Asia, and Oceania have performed well, but the South Asian market is affected by the decline of the Indian market, which accounts for more than 60%, and has become a drag on the entire Asia-Pacific market; in the European and American markets, the North American market has recovered The extent is better than that of the European and South American markets. Among them, the European market has experienced the largest decline. The overall export value has fallen by more than 10% year-on-year, which has dropped as much as 4.6 percentage points from the same period last year.
In the first three quarters of the LED lighting exports by country, major European economies such as Germany, Britain, the Netherlands, and France have declined to varying degrees, which has also affected the overall performance of the European market. Brazil and India are also sluggish. North America, the United States, Canada The performance is significantly better than the previous half year, while Saudi Arabia, South Korea, and Thailand, as representatives of West Asia, East Asia and Southeast Asia respectively, have achieved extremely high growth under the negative impact of the epidemic, reflecting the vigorous economic vitality of these regions. It is worth mentioning that the total amount of LED lighting products exported to Iraq in the first three quarters has also nearly doubled, making this war-torn West Asia country the edge of the top 20 export destination countries. In the first three quarters of 2020, my country's total LED lighting products exported to the top 20 countries and regions accounted for about 75% of the total export value, and the concentration of key markets is still high.
Among them, the export situation of LED light source products. The total export volume to the top 20 was 3.002 billion, an increase of 160 million over the same period last year, but its share in total exports decreased by 3 percentage points to 61.4%; the total export volume was US$3.087 billion, an increase of only 0.54 over the same period last year. Billion US dollars, the proportion of total exports also dropped by 2 percentage points to 73%. The epidemic has fragmented the LED light source market. On the other hand, from the perspective of the average price of export products, more than 70% of the destination markets have declined to varying degrees, which also reflects the trend of fierce price competition in the export market for LED light sources.
5. Challenges in the future:
While the export situation is gratifying, it is not appropriate to be blindly optimistic about the overall situation. The uncertainty of its prospects still exists. The threat of the current global epidemic has not been eliminated, and it is still one after another. Whether it is the resumption of global flow of people or goods, it is currently a long-term obstacle. The major challenges facing exports in the future include:
01 Increased uncertainty in the outlook:
The uncertainty brought about by the epidemic and weak demand caused by the decline in the willingness of enterprises to invest and the deterioration of the asset-liability ratio will, to a certain extent, restrict the repair process of external demand; uncertain factors such as the global economic situation, Sino-US trade friction, and the RMB exchange rate remain Existence, adversely affecting the planning and decision-making of relevant export enterprises.
02 The high increase in exports of epidemic prevention materials is difficult to maintain for a long time:
At present, in addition to the high-growth epidemic prevention and housing economy related products, external demand orders are still under pressure, especially the export of labor-intensive products is still sluggish. The export of goods related to epidemic prevention and housing economy is expected to decline in the future, and from the perspective of the past two months, the export of epidemic-related products has slowed down, the growth rate has flattened, and the boosting contribution to the total export volume has declined.
03 The sustainability of the "transfer substitution effect" of exports remains to be seen:
In the future, as other manufacturing countries pass the peak of the epidemic and gradually resume work and production, supply capacity will gradually recover. It is inevitable that China's export substitution effect to other countries will weaken, and the export market share will return to the level of the normal period, thereby weakening the overall export growth Support.
04 Supply chain spillover risks still exist:
However, in the context of the global economic downturn, Sino-US trade frictions continue to escalate, and the global industrial chain de-sinicization undercurrents, the lighting industry chain has spillover risks. In the previous operating system, the supply chain must emphasize efficiency and cost-effectiveness. In the future, overseas customers are likely to put the security of the supply chain as an important consideration, and it will be difficult to avoid the diversion of some orders to related manufacturing countries such as Mexico, Vietnam, and India.
05 Continued decline in profits increases the pressure on companies to survive
With the rigid increase of various costs necessary for manufacturing such as labor, land, and raw materials, the prices of export products have repeatedly fallen in an increasingly competitive environment, and the already thin profitability has been repeatedly compressed. It has caused great pressure on the living space of relevant export enterprises, especially small and micro enterprises.
To sum up
Not long ago, the Politburo meeting set the tone, and the domestic and international double cycle dominated by the domestic cycle will become the underlying logic of China's economic structure during the 14th Five-Year Plan period. The correct understanding of this should be to finally open up the dual cycle and enhance the international competitiveness of Chinese manufacturing, rather than simply involute.
Implemented in our lighting industry, in fact, a double cycle has long been realized. More than half of the output value is exported to more than 200 countries and regions around the world. At the same time, nearly half of the output value is supplied to the domestic market. Therefore, the domestic lighting market is quite saturated, and the export enterprises are particularly It is a pure export enterprise that blindly "turns exports to domestic sales", and will face the domestic market including brand, channel, product, service, team and even cultural thresholds. It will also intensify the existing contradictions such as structural overcapacity, low price competition, and product homogeneity. , The final result is likely to be "I did not go ashore, but also dragged others into the water." The landing of the double cycle also needs to consider the characteristics of the industry. The road of lighting export to domestic sales is full of thorns, which is not applicable to all enterprises, and requires clear positioning of each enterprise. Adjust measures to local conditions and treat it with caution.
Countless facts and data in the past have fully demonstrated the rigid demand and resilience of lighting products and China's irreplaceable status as the global lighting manufacturing and supply chain center. Therefore, at this stage, the majority of lighting export companies still need to strengthen their confidence and focus on their main business.
As one of the few major economies in the world that has fully contained the epidemic, China has also turned its economic data from negative to positive in the first three quarters, and society has almost returned to the right track. We should expect our country’s prospects to be full of expectations. At this moment, we are still unable to survive the heat, and we need to be sufficiently vigilant against the profound changes in the world under the influence of the epidemic. The epidemic is nothing more than a crisis. How to eliminate dangers and seize opportunities is a problem that our company, the entire industry, and even the entire society need to consider. (Author: China Association of Lighting Wen Qidong)