Analysis About Opportunities and Challenges of China's LED Display Market

In recent years, China has witnessed an increasing demand for displays as a result of the rapid growth for LED displays in stadiums and gymnasiums. Currently, LED displays have been widely applied in banking, railway stations, stadiums, gymnasiums and the advertisement industry. The display screen has transformed from a traditional monochrome static display to full-color video display.
In 2006, the market demand for LED displays in China was valued at 4.05 billion Yuan, an increase of 25.1% over year 2005. The demand for full color displays amounted to 1.71 billion Yuan, accounting for 42.2% of the total market. Ranked next were the dual-color displays with a demand value of 1.63 billion Yuan, accounting for 40.2% of the entire market. Monochrome displays were not expensive, and so also achieved a total revenue of 710 million Yuan.
Now with the approaching of the Olympic Games and the World Expo, more and more LED displays will be used in stadiums, gymnasiums and roadways. LED displays will be enjoying a rapid growth in application of sports squares. As the market demand for full color displays grows in the sectors of stadiums, gymnasiums, and advertisements, full color LED displays will occupy an expanding market proportion. People are predicting that the Chinese LED display market will have a CAGR of 15.1% from 2007 to 2010 and by 2010 market demand will reach 7.55 billion Yuan.
The 2008 Beijing Olympic Games will directly promote the demand for LED displays in stadiums and gymnasiums. Furthermore, the Olympic Games has high requirements for screen quality, so high-end displays will see an increase in applications, such as Led display,Led manufacturer,Electronic signs etc. As a result, the increase in quantity and quality of LED displays will drive a higher speed of development. In addition to stadiums and gymnasiums, important events like the Olympic Games and the World Expo will directly promote the use of LED displays in the advertising field. Advertising agencies at home and abroad will certainly cherish the business opportunities brought by these events, and increase their revenue from advertising displays, thus facilitating the development of the display field.
Furthermore, these important events will be accompanied by a great many large activities, and the government, the media and other organizations will probably hold related activities during the Olympic Games and the World Expo. Some of these activities may require the application of large LED displays, thus promoting the LED display market and the leasing market as well.
In addition to this, the convening of these two sessions will stimulate the demand in government sectors for LED displays. As an effective instrument in the delivery of public news, the LED display is probably adopted by more government sectors such as the transportation and taxation
departments and authorities from industry and commerce.
Stadiums and gymnasiums, and outdoor advertisements are the two largest application fields for LED displays in the Chinese market. Outside of that, LED displays are mainly utilized in some engineering projects. Generally, the LED display projects for stadiums and gymnasiums, as well as the advertising industry, are primarily paid for through open tender, while some display projects for enterprises mainly adopt bidding to accrue revenue.
Owing to the distinct properties of engineering, LED display projects often confront funding problems. As most stadiums and gymnasiums are government projects, featuring relatively abundant capital, LED display manufacturers suffer less pressure to lower the price. While in the field of advertising, another important application field for LED displays, LED display enterprises suffer strong pressure to decrease prices because project investors vary in economic strength and mainly rely on the advertising income from displays to maintain the normal operation of the company. Post investors have a lot of flexibility in advertising income from LED displays. Investors have no guarantee of sufficient funds so LED display enterprises often wrestle with funding advertising projects.
Meanwhile, there are plenty of LED display enterprises in China. Some enterprises wage price wars to seize market shares. Sometimes there have been low quotations for bids. The interindustrial pressure of competition is increasing. In order to guarantee sound development, reduce credit risk and the amount of bad and doubtful debts, some important LED display enterprises in China are usually prudential in undertaking advertisement projects.
Currently domestic LED display enterprises are dominant in the Chinese market for their greater number and lower price. Domestically-funded and produced LED display enterprises not only meet domestic market demand but also export goods to the overseas markets. In recent years, some internationally- known LED display enterprises have gradually transferred their production bases to China due to cost pressure. For example, Barco set up a production base for displays in Beijing; Lighthouse has a production base in Huizhuo; Daktronics set up their own production plant in China. As for some display enterprises like Mitsubishi, who have not yet entered the Chinese market, have also witnessed the potential development of the Chinese market and are preparing to enter into it. With the increasing number of production bases in China set up by international LED display enterprises, together with the considerable number of domestic LED display enterprises, China is growing to be the key production base of LED displays globally.