COVID-19 Impact On China’s Lighting Industry Analysis

In January 2020, the sudden outbreak of COVID-19  had a major impact on the social life and economic development of China and the world. Shenzhen Toppo Lighting Co., Ltd. pays close attention to the development and changes of the epidemic, actively carried out a series of timely and effective work, made preparations for epidemic prevention and control and resumption of production. Toppo also did some research and analysis about how is the COVID-19 affect LED Lights industry. The relevant situation were summarized as below:

1: COVID-19 impact on China’s Lighting industry Analysis.

Affected by the epidemic, the Chinese industry generally postponed their opening after the Spring Festival. It has had affected the enterprises’ production and operation in different degrees, especially bring greater pressure on export companies to deliver the orders in time in the first half of 2020. In view of the actual characteristics of the lighting industry's area and related products, the lighting industry is affected by the epidemic mainly in the following aspects:

    1) Obvious differences in the resumption of work and production of enterprises.

The main lighting enterprises are concentrated in the southeast coastal areas, most companies are in Zhejiang and Guangdong province where also the export-oriented companies located, covered more than 70% of the industry's production capacity. In the early of epidemic, the approval process for the re-opening were very strict and slow. Compared with previous years’ resumption of production, this year it has delayed more than ten days later. Affected by various reasons, such as employee return rate, the supply chain slowly recovery , funding, logistic problem the production capacity of return to work’s companies are quite different.

    2) Poor supply chain operation is the main difficulty in the early resuming.

Affected by the epidemic, the raw materials supply for enterprises resumption was blocked due to the suspension of upstream supply companies and slow logistics. As of July, this situation has been greatly improved as the epidemic eased. 

    3) There is a great Pressure for accomplish the companies’ objectives in the first half

of the year.

Most enterprises said that the completion of the first half of the production plan is under great pressure, especially for export enterprises. It’s difficult to ship the order on time, and basically was delayed 1-2 weeks. The impact of the epidemic on production in the first and second quarters was a foregone conclusion. Most companies expect a decline of more than 20% in the first half of the year, and individual companies expect a decline of 50% to 80%. 

Additional protective measures and employee placement have correspondingly increased the company's operating costs, and profits will drop significantly year-on-year.

4) There is relatively long-term influence for the international trade.

Most companies expected the orders will has a slight decline for the first half. However, according to the current situation, orders in overseas markets fluctuated significantly. In May, Messe Frankfurt officially announced that it will postpone the two-year Frankfurt International Light + Building Fair to 8^th March, 2022. China’s companies have expressed their understanding, but it caused some impact and loss on the exhibitors’ work plan, exhibit transportation, employee arrangement and other aspects.

2:  Long term impact for LED Market Size And Growth Analysis

The epidemic has hindered the country's industrial development for a period of time, and to a certain extent has a huge impact on small and medium-sized enterprises,  and further aggravates the survival of the fittest in the lighting industry and speed up the reshuffle of the industry.

Under the various difficulties caused by the epidemic, such as labor shortage, supply chain fracture, capital shortage, and logistics obstruction. Large and medium-sized enterprises who has strong capital flows, strong ability to resist risks, and advanced production management systems will have more opportunities to win this round. It has a certain influence on accelerating the integration of the lighting industry and promoting the growth of lighting enterprises.

Toppo Lighting completed the upgrading for the supply chain and the intelligent production workshop in 2019. Although it was affected by the epidemic, relying on the strong anti-risk management, it has achieved stable shipment of orders and protect the interests of customers. In this crisis, Toppo lighting has demonstrated the trusted and reliable quality, proved it is a high-quality LED lighting industry partner.