Business failure is a normal shuffling process that any industry must go through. However, the news that the owner of the Zhongshan Xiongji Lighting Factory ran away still caused a lot of shock. In recent years, due to the country's emphasis on LED development and the promotion of various favorable policies, many funds have poured into the LED industry, but the lack of industry standards has led to the proliferation of low-quality and low-priced products. Zhongshan Xiongji Lighting Factory is a typical example of low-quality products.

The owner of the lighting factory ran away, and the arrears of wages have been paid in advance

According to a report from the Guzhen Town Government of Zhongshan City, Xie, the operator of Xiongji Lighting Factory, was suspected of escaping, suspected of contract fraud and refusal to pay labor remuneration. The local public security has started the criminal case filing procedure, formed a special team to arrest Xie and other persons involved in the case, and transported the inventory goods to the public warehouse for storage. At present, more than 300 Xiongji employees with over one million wages have been paid in advance by the Guzhen Township Government, and the payment of more than 40 million yuan from 38 Xiongji suppliers is still unaccounted for.

Low price to seize the market, product quality cannot be guaranteed

As Zhongshan City has tens of thousands of LED companies, Xiongji Lighting Factory is one of the few local companies with sales over 100 million. According to reports, the Xiongji factory has switched from a traditional lamp to a manufacturer of LED lamps. It has been desperately trying to reduce prices without regard to quality, and has been able to seize a certain market share, but in the end, it has reached a dead end due to the problem of repeated returns of quality. . The development of Xiongji Factory may be a microcosm of low-quality and low-cost enterprises in the LED industry in the future. At 11:00 on July 3, an industry Weibo expert named "Kaihuali Die Casting" posted the news that Xie Mou, the boss of Xiongji Lighting, ran away at noon on July 2, which immediately attracted the attention of industry insiders.

@Energy Saving Wanjia: Xiongji Lighting Factory is a microcosm of the low-quality products in the ancient town. There are more than a few dozens of profit-seeking and unethical production? Without the promoter of low-cost LED housing, light source, and power supply manufacturers, what would they do? Can make such a low price! (July 3 at 11:11)

@雅思Illumination Fengfeiyang2843078455: There are runners every year, and it is estimated that there will be a lot this year. (July 3rd 11:19)

@TimeYin Banquet: The run has started in the second half of the year, let’s see how many companies will fall and run this year. (July 3rd 11:19)

@ETN Lighting Liu Yuangui: LED is exciting and scary. (July 3rd 13:19)

@西西鱼泵: The time to repay the debt of LED lighting in Zhongshan Ancient Town is coming, the expansion is too strong, and the market wakes up too quickly. (July 3rd 13:55)

@中山凯华利 Lamps: If you really owe the supplier 50 million, it is not just the "bear" who runs away, there will be 2 bears, 3 bears, 4 bears... N bears! Think about 10W pan Lights sell for 17 yuan, 50W floodlights sell for 48 yuan... How big is the profit of the supplier? …(July 3rd 14:30)

@DiDiDiDiDi: Inferior and harmful! The accessories dealers in the ancient town can't sleep now. Dear, have you received the payment? (July 3rd 14:36)

@開华利die-casting: While condemning being a low-priced finished product manufacturer, we should also condemn those manufacturers who provide them with inferior kits, light sources, and power supplies. Without them, the promoters of profit and loss, the market will not be without morals and bottom lines. . (July 3rd 14:44)

As the largest professional lighting production base and wholesale market in China, Zhongshan Ancient Town, where the incident occurred, in 2012, the total output value of the lighting industry reached 15.81 billion yuan, accounting for more than 60% of the national market share. The town's industrial facilities are quite mature. Many people rent a factory in the local area, buy a few soldering irons, purchase the required accessories in the town, and go home for simple assembly. Workshop-style enterprises like this are everywhere in the ancient town. Both are. According to the official website of Guzhen, there are more than 10,000 individual business licenses registered in the town. In order to sell products, these small workshops conduct vicious price competition. On the one hand, they want to make low prices, and on the other hand, they want to make money, so these companies have made up their minds on product costs. In addition to purchasing low-priced accessories, some factories will even further reduce costs by saving processes. According to a supplier, the price of lamps and lanterns in Xiongji Factory was relatively rational at first. Taking 3W LED bulbs as an example, there was still profit when it sold more than 5 yuan. Later, Xiongji only sold 3.8 yuan, which was not enough for the cost. , and the quality of this product, which is called "bad goods" in the industry, is not guaranteed at all.

Victims turn into perpetrators, long-term checks become empty checks

The low-end LED lamps produced by Xiongji Lighting Factory have experienced three returns of products due to quality problems since last year, which seriously affected the operation of the company. Especially last year, a cargo owner lost seven or eight million yuan due to "running away". Xie Mou, the boss of Xiongji, may have the idea of ​​"running away" at this time. As a result, the former victims slowly become the current perpetrators. According to rough statistics, the cheques in the hands of nearly 40 suppliers and sellers of Xiongji add up to more than 40 million. The checks written by Xiongji were all from June, July, and even September, and they all came from a bank in Heyuan City. Once the business "runs away" or goes bankrupt, the bank's cheque cannot be cashed. According to a supplier, Hung Kee's cheque could not be cashed and could not be settled on time since March this year, which was no problem in the past. Xiongji owed more than 1.5 million wages to workers, plus commissions and bonuses, the total amount reached about 2 million. At present, these more than 300 unemployed migrant workers have coordinated the operation of the original canteen and accommodation through the local government to solve the problem of workers' food and accommodation. And contact relevant factories and enterprises to provide jobs for workers to re-employ. Another supplier borrowed hundreds of thousands to ship to Xiongji, and then took Xiongji’s check. After learning that Xie ran away, the supplier almost jumped off the building that night. In the incident of "Boss Hung Kee Running away", the parts suppliers and dealers were the most injured. Surviving suppliers, on the other hand, have to pay for the failing companies to a certain extent. If low-priced and inferior products are rampant in the ancient town, the brand image of "Lighting Capital" will also be affected.

Industry risks intensify, quality is still king

It is understood that Xiongji's products have the problem of cutting corners and materials, and the factory's business philosophy and management methods are also contradictory. Important positions such as Xiongji's procurement, warehouse, production process design and manufacturing, and finance are all Xie's relatives. The relatives' inaction and corruption from top to bottom. In the international division of labor, it is generally more profitable to master key technologies, and the lower the technical content, the easier it is to be replaced, and the profit is lower. In the future, the more scarce the technology, the higher the value embodied in the international division of labor. Only by improving the technical content of products and mastering higher-end LED technology can domestic LED foundry companies occupy an important position in the international division of labor in the industry. And Xiong Kee Factory, which sacrificed quality and lowered prices, ended up going bankrupt.