Simon Chen(also known as Chen Haoyu in Chinese), vice president of QSTECH
Co.,ltd, shared his insights on present development and prospects on LED
industry when interviewed by a popular industry magazine.
Due to serious homogeneity in LED display products and continually compressed profit margin for crowed domestic LED display manufacturers in China,overseas market becomes another arena of competition for many Chinese LED screen providers.
Unlike any other LED manufacturers, QSTECH
Co,ltd, is remarked as modest and steady, or even labeled as conserved. Though
QSTECH usually downplay its accomplishments(though QSTECH does not squeak on
its accomplishment), it seizes a large share of overseas market with one and
another classic installations. Today, with this interview, we hope to have the
reasons behind QSTECH’s success unveiled.
Development Strategic: Seeking progress in stability
In the recent years, QSTECH has resorted to overseas market for the increasing overseas demand
For the increasing overseas demand for LED
displays in recent years, QSTECH has transferred its development focus to
overseas market, mapping out and expanding distribution channels. It has been
disclosed that QSTECH has established stable cooperative relationship with
distributors and agents in more than 80 countries around the world, and surely
this distribution map is continuously extending and enlarging. The vice
president, Simon introduces to the World of LED Display that QSTECH
mainly focuses on the development of overseas distributors and newly founded
office in Mexico will be soon in operation and this office is intended to
radiate throughout the Americas region. “Moreover, the establishment of an
office in Europe is under consideration of the company, and probably actions
would be taken out in coming months”, Simon added.
So far QSTECH explores international market mainly by developing distributors. Simon commented:“ There surely are limitations of such marketing practice, however, the company still intends to adopt moderate measures to step into the market, in that the company wishes to establish long-term and stable cooperative relationship with local agents and dealers, which is the company’s basic idea,strategy and positioning for overseas market all about for the present. QSTECH would not pursue leaps in overseas business at the cost of solid partnership with local distributors.
A stable team, technical strength, and strong capacity to provide services and solutions
Compared with the coastal city Shenzhen where
relevant industries of LED displays are densely located, Xi’an lies in the
Northwest China, being faced up with with many disadvantages, such as supply
chains are far away from the facility,delayed information, labor cost and
transportation inconvenience. On the contrary, the location brings about many
advantages at the same time. Unlike the coastal cities suffering from high
turnover, Xi’an benefits from lower risk of the drainage and outflow of R&D
and technical talents. As a result, the manufacturers and producers in Xi’an
are R&D oriented and technology driven instead of mass production.
QSTECH maximizes the utilization of this advantage.Simon thinks that the core competitive edge of QSTECH lies in its stable team, strong technical strength and the reliable capacity to provide services and solutions. “Many employees has worked as a stable team for QSTECH for 15 to 20 years, and to a a certain degree, this makes QSTECH like a home for everyone working here, and it is the home-like working environment that encourages everyone’s to strive for our shared goals,”said Simon.
“Xi’an, rich in technical resources, has witnessed the maturity of
industrial development, which offers QSTECH priority to screen and recruit
elites from many key universities and the possibility to join hands with
research institutes and government to develop new technology and
Simon Chen mentioned Xi'an NovaStar in the
interview particularly. He commented that QSTECH and NovaStar are both located
in Xi’an. Many R&D talents of the two companies are schoolmates and
friends, which makes technical information exchange and discussions not only
possible but also joyful experiences.
As a matter of fact, many multinational
corporations, like Huawei, ZTE and Samsung, have set up R&D institutes and
branches in Xi’an under the strong support of the local government policy,
which further explains the advantages on R&D, technology development and labor
cost in Xi’an.
LED display industry has transferred from rapid
development to maturity, therefore companies are to pick out and focus on
the areas that they are best at. This requires enterprises to properly
position themselves to pursue further development. QSTECH has determined to
serve several fields, like permanent installation for Ads and media, retail and
sport courts and so on. Simon has also remarked that QSTECH would pay more
attention to specific areas to fully demonstrate QSTECH’s specialty and provide
one-stop service for customers with premium user experience, objective and
helpful information,worry-free installation and after-sales maintenance and
QSTECH’s development strategy is to provide
complete and tailored solution based on the practical demand and technical
resources of customers.Simon accounted that this strategy has been adopted
since the establishment of International Business Department. For example,
QSTECH supplies not only LED displays, but also framework, player,
intercommunication and diagnosing system and cloud service as a complete solution.
Opportunities and Challenges
Apparently overseas market appeals more attention
compared with the saturated domestic market where competition is getting
fiercer and particularly Russia, Southeast ASIA, Africa, and Latin America and
some prospering regions offer brighter prospect with commercial opportunities.
In the meanwhile, political turmoils in certain areas, like Turkey, Egypt do
concern many corporation.“Admittedly, there are still much room left in
domestic market, but judged internationally, overseas market offers more
opportunities. In addition, the profit margin in domestic market has been
greatly reduced due to serious products homogeneity and fierce competition. In
my opinion, overseas market has been growing steadily due to strong risk
resistance capacity and more maneuver room. Domestic manufactures of LED
displays have to resort to international market to maintain stable growth,”said
Though the prospect of overseas market is optimistic, the risks cannot be ignored in the market exploration. Chinese manufacturers are now leading the LED display industry in the international market. The well-known brands, like Daktronics and Barco, are being faced up with shrinking supply chain. However it does not mean that Chinese LED display enterprises have reached the development zenith of international LED displays industry. Simon remarked,“The greatest contribution that Chinese LED display manufacturers made to the industry is improved supply capability of LED displays, thus the the producing capacity has been greatly increased, and it is good news for customers and market since the price has been lowered. Good thing is products of Chinese manufacturers are widely used around the world, but we need to think about how to ensure and increase profitability in the decades coming. Profit determines if there is prospering future of LED display industry. Therefore, I suggest Chinese suppliers to join hands and form unions to maintain profitability and, on the other hand to regulate the market to maintain good impression of ‘Made in China’ ”.
“In addition, the middle and small-sized
enterprises, like us, should also pay attention to risks of political
turbulence and laws and regulations in order to shun them. “ Chen Haoyu added.
Psychology and purchasing
habit of our customers are directly influenced by business environment, culture
and economic development when purchasing display screen. As a result, for the
customers from different countries, different strategies shall be employed accordingly.
Simon Chen believes, for example, that Europeans and Americans (the major
customers of QSTECH) value the integrity, transparent communication,
responsible attitude, positive response and similar way of thinking. That is to
say, for them, quality is the core factor which decides the price of our
products. Relatively speaking, for the customers in Latin America, Eastern
Europe and Southeast Asia , performance price ratio is key factor. Thus,
different strategies are required for different markets.
Simon thinks that the smart move for LED displays suppliers, including QSTECH, would be to serve and invest in both domestic and overseas market in the decades coming. As to the matter how to balance time and energy investment in these two markets and determining the development focus needs to be considered carefully.