“Every year there are escaping manufacturers, but this has become an ongoing trend in 2014,” is a common saying in China’s lighting industry, according to a report by Dazhaoming.com. This is related to the easing domestic economic market, and slowdown in the real estate market leading to diminishing construction projects, said industry insiders. The LED industry is in a rapidly expanding phase, and all these indicate “winter is coming” in the LED lighting industry. However, not all manufacturers are capable of defending themselves against the “cold” and some have resorted to “selfish” measures.

1. Runaway LED company executives were concentrated in certain regions in China. Based on preliminary statistics, manufacturer leaders that “made a run for it” in 2014 were concentrated in Zhongshan, Shenzhen, Dongyuan, Guangzhou, and Jiangmen cities in Guangdong province, China. Top manufacturers executives that disappeared include Zhongshan Liangdian Residential Lighting manufacturer (亮点家灯饰厂),  Zhongshan Phoenix Lighting Legend (凤光传奇) and Xilin Lighting (喜林灯饰).
2. Most missing manufacturers went into hiding because of financial issues. Several of the manufacturers were heavily indebted, and had broken finances. Additionally, as product quality drops, manufacturers wrong market positioning was also the main factor behind insolvencies and market elimination.
3. Since January, the “runaway” tide spread throughout 2014, and peaked during May, June, September and October. Three manufacturers, Zhongshan Phoenix Lighting Legend (凤光传奇), Xilin and Qike Lighting (齐科照明) company leaders all disappeared, and caused large reaction in the industry.

Victims of the runaway manufacturers are their large network of suppliers, dealers, and employees. Currently, China’s lighting industry is still stuck in the quagmire of oversupply. Suppliers and distributors need to react rationally to these changes.