Opportunities and challenges coexist in China’s LED display market

August 02, 2021

Driven by the rapid growth in demand for LED displays in sports venues, in recent years, the application of LED displays in China has gradually increased. At present, LED has been widely used in banks, railway stations, advertising, sports venues. The display screen has also changed from a traditional monochrome static display to a full-color video display.

In 2016, China’s LED display market demand was 4.05 billion yuan, an increase of 25.1% over 2015. The demand for full-color displays reached 1.71 billion yuan, accounting for 42.2% of the overall market. The demand for dual-color displays ranked No. Second place, the demand is 1.63 billion yuan, accounting for 40.2% of the overall market. Because the unit price of the monochrome display is relatively cheap, the demand is 710 million yuan.

Figure 1 China’s LED display market scale from 2016 to 2020

With the Olympics and World Expo approaching, LED displays will be widely used in stadiums and road traffic indications, and the application of LED displays in sports squares will see rapid growth. As the demand for full-color displays in stadiums and advertising fields will continue to increase, the proportion of full-color LED displays in the overall market will continue to expand. From 2017 to 2020, the average annual compound growth rate of China’s LED display market will reach 15.1%, and the market demand in 2020 will reach 7.55 billion yuan.

Figure 2 Color structure of China’s LED display market in 2016

Major events become market boosters

The holding of the 2018 Olympic Games will directly promote the rapid increase in the number of screens used in stadiums. At the same time, because the Olympic screens have higher requirements for the quality of LED displays, the proportion of high-end screens will also increase. The improvement drives the growth of the LED display market. In addition to sports venues, another area of ​​direct impetus for major events such as the Olympics and World Expos is the advertising industry. Advertising companies at home and abroad are bound to be optimistic about the business opportunities brought by the Olympics and World Expos. Therefore, they will inevitably increase the number of advertising screens to improve themselves. Revenue, thereby promoting the development of the advertising screen market.

Major events such as the Olympic Games and the World Expo will inevitably be accompanied by many large-scale events. The government, news media and various organizations may hold various related activities between the Olympic Games and the World Expo. Some events may require large-screen LEDs. These requirements In addition to directly driving the display market, it may also drive the LED display rental market at the same time.

In addition, the convening of the two sessions will also stimulate government departments’ demand for LED displays. As an effective public information release tool, LED displays may be more adopted by government departments during the two sessions, such as government agencies, Transportation department, taxation department, industrial and commercial department, etc.

In the advertising sector, it is difficult to pay back, and the market risk factor is high

Sports venues and outdoor advertising are the two largest application areas in China’s LED display market. LED display screens are mostly engineering applications. Generally, large-scale LED display projects such as stadiums and advertisements are mainly carried out through public bidding, while some enterprise-specific display screen projects are mainly carried out through bid invitations.

Due to the obvious nature of the LED display project, it is often necessary to face the problem of payment collection during the implementation of the LED display project. Since most of the stadiums are government projects, the funds are relatively abundant, so LED display manufacturers face less pressure on remittances. In the advertising field, which is also an important application field of LED display, due to the uneven economic strength of project investors, and the investment of project investors to build LED advertising screens, they mainly rely on the advertising costs of the display to maintain the normal operation of the enterprise. The LED display advertising expenses obtained by the investor are relatively flexible, and the investor cannot guarantee sufficient funds. LED display manufacturers are under greater pressure on remittances in advertising projects. At the same time, there are many LED display manufacturers in China. In order to compete for market share, some companies do not hesitate to use price wars. In the process of project bidding, low prices are constantly appearing, and the pressure of competition among enterprises is increasing. In order to ensure the healthy development of enterprises, reduce the risks of remittances faced by enterprises, and reduce the number of bad debts and bad debts of enterprises, at present, some major domestic LED display manufacturers adopt a more cautious attitude when undertaking advertising and other projects.

China will become a major global production base

At present, there are many domestic companies engaged in the production of LED displays. At the same time, due to the high prices of LED displays from foreign-funded enterprises, local companies are mostly dominated by the Chinese LED display market. Atpresent, in addition to supplying domestic demand, local LED display manufacturers continue to export their products to foreign markets. In recent years, due to cost pressures, some well-known international LED display companies have gradually moved their production bases to China. For example, Barco has established a display production base in Beijing, and Lighthouse also has a production base in Huizhou, Daktronics, Rheinburg has established production plants in China. However, Mitsubishi and other display manufacturers that have not yet entered the Chinese market are also optimistic about the development prospects of the domestic market and are ready to enter the domestic market. As the international LED display manufacturers continue to transfer their production bases to the country, and there are many domestic LED displays Local enterprises, China is becoming the main production base of global LED display.

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