QSTECH: Three-Wheel Driving Force of Overseas Market Development---Technology, Service and Solution

Abstract:

Simon Chen(also known as Chen Haoyu in Chinese), vice president of QSTECH Co.,ltd, shared his insights on present development and prospects on LED industry when interviewed by a popular industry magazine.

http://www.qs-tech.com/english/news-details-456.html

Due to serious homogeneity in LED display products and continually compressed profit margin for crowed domestic LED display manufacturers in China,overseas market becomes another arena of competition for many Chinese LED screen providers.

Unlike any other LED manufacturers, QSTECH Co,ltd, is remarked as modest and steady, or even labeled as conserved. Though QSTECH usually downplay its accomplishments(though QSTECH does not squeak on its accomplishment), it seizes a large share of overseas market with one and another classic installations. Today, with this interview, we hope to have the reasons behind QSTECH’s success unveiled.

Development Strategic: Seeking progress in stability

In the recent years, QSTECH has resorted to overseas market for the increasing overseas demand

For the increasing overseas demand for LED displays in recent years, QSTECH has transferred its development focus to overseas market, mapping out and expanding distribution channels. It has been disclosed that QSTECH has established stable cooperative relationship with distributors and agents in more than 80 countries around the world, and surely this distribution map is continuously extending and enlarging. The vice president, Simon introduces to the World of LED Display that QSTECH mainly focuses on the development of overseas distributors and newly founded office in Mexico will be soon in operation and this office is intended to radiate throughout the Americas region. “Moreover, the establishment of an office in Europe is under consideration of the company, and probably actions would be taken out in coming months”, Simon added.

        So far QSTECH explores international market mainly by developing distributors. Simon commented:“ There surely are limitations of such marketing practice, however, the company still intends to adopt moderate measures to step into the market, in that the company wishes to establish long-term and stable cooperative relationship with local agents and dealers, which is the company’s basic idea,strategy and positioning for overseas market all about for the present. QSTECH would not pursue leaps in overseas business at the cost of solid partnership with local distributors.

A stable team, technical strength, and strong capacity to provide services and solutions

Compared with the coastal city Shenzhen where relevant industries of LED displays are densely located, Xi’an lies in the Northwest China, being faced up with with many disadvantages, such as supply chains are far away from the facility,delayed information, labor cost and transportation inconvenience. On the contrary, the location brings about many advantages at the same time. Unlike the coastal cities suffering from high turnover, Xi’an benefits from lower risk of the drainage and outflow of R&D and technical talents. As a result, the manufacturers and producers in Xi’an are R&D oriented and technology driven instead of mass production.
        QSTECH maximizes the utilization of this advantage.Simon thinks that the core competitive edge of QSTECH lies in its stable team, strong technical strength and the reliable capacity to provide services and solutions. “Many employees has worked as a stable team for QSTECH for 15 to 20 years, and to a a certain degree, this makes QSTECH like a home for everyone working here, and it is the home-like working environment that encourages everyone’s to strive for our shared goals,”said Simon.

“Xi’an, rich in technical resources, has witnessed the maturity of industrial development, which offers QSTECH priority to screen and recruit elites from many key universities and the possibility to join hands with research institutes and government to develop new technology and products,”Simon added.

Simon Chen mentioned Xi'an NovaStar in the interview particularly. He commented that QSTECH and NovaStar are both located in Xi’an. Many R&D talents of the two companies are schoolmates and friends, which makes technical information exchange and discussions not only possible but also joyful experiences.

As a matter of fact, many multinational corporations, like Huawei, ZTE and Samsung, have set up R&D institutes and branches in Xi’an under the strong support of the local government policy, which further explains the advantages on R&D, technology development and labor cost in Xi’an.

LED display industry has transferred from rapid development to maturity, therefore companies are to pick out and focus on the areas that they are best at. This requires enterprises to properly position themselves to pursue further development. QSTECH has determined to serve several fields, like permanent installation for Ads and media, retail and sport courts and so on. Simon has also remarked that QSTECH would pay more attention to specific areas to fully demonstrate QSTECH’s specialty and provide one-stop service for customers with premium user experience, objective and helpful information,worry-free installation and after-sales maintenance and monitoring.

QSTECH’s development strategy is to provide complete and tailored solution based on the practical demand and technical resources of customers.Simon accounted that this strategy has been adopted since the establishment of International Business Department. For example, QSTECH supplies not only LED displays, but also framework, player, intercommunication and diagnosing system and cloud service as  a complete solution.

Opportunities and Challenges

Apparently overseas market appeals more attention compared with the saturated domestic market where competition is getting fiercer and particularly Russia, Southeast ASIA, Africa, and Latin America and some prospering regions offer brighter prospect with commercial opportunities. In the meanwhile, political turmoils in certain areas, like Turkey, Egypt do concern many corporation.“Admittedly, there are still much room left in domestic market, but judged internationally, overseas market offers more opportunities. In addition, the profit margin in domestic market has been greatly reduced due to serious products homogeneity and fierce competition. In my opinion, overseas market has been growing steadily due to strong risk resistance capacity and more maneuver room. Domestic manufactures of LED displays have to resort to international market to maintain stable growth,”said Simon.
        Though the prospect of overseas market is optimistic, the risks cannot be ignored in the market exploration. Chinese manufacturers are now leading the LED display industry in the international market. The well-known brands, like Daktronics and Barco, are being faced up with shrinking supply chain. However it does not mean that Chinese LED display enterprises have reached the development zenith of international LED displays industry. Simon remarked,“The greatest contribution that Chinese LED display manufacturers made to the industry is improved supply capability of LED displays, thus the the producing capacity has been greatly increased, and it is good news for customers and market since the price has been lowered. Good thing is products of Chinese manufacturers are widely used around the world, but we need to think about how to ensure and increase profitability in the decades coming. Profit determines if there is prospering future of LED display industry. Therefore, I suggest Chinese suppliers to join hands and form unions to maintain profitability and, on the other hand to regulate the market to maintain good impression of ‘Made in China’ ”.

“In addition, the middle and small-sized enterprises, like us, should also pay attention to risks of political turbulence and laws and regulations in order to shun them. “ Chen Haoyu added.

        Psychology and purchasing habit of our customers are directly influenced by business environment, culture and economic development when purchasing display screen. As a result, for the customers from different countries, different strategies shall be employed accordingly. Simon Chen believes, for example, that Europeans and Americans (the major customers of QSTECH) value the integrity, transparent communication, responsible attitude, positive response and similar way of thinking. That is to say, for them, quality is the core factor which decides the price of our products. Relatively speaking, for the customers in Latin America, Eastern Europe and Southeast Asia , performance price ratio is key factor. Thus, different strategies are required for different markets.

Simon thinks that the smart move for LED displays suppliers, including QSTECH, would be to serve and invest in both domestic and overseas market in the decades coming. As to the matter how to balance time and energy investment in these two markets and determining the development focus needs to be considered carefully.