Korean SMEs Face Bankruptcy as Low Priced Chinese LED Bulbs Flood the Market.
The influx of affordable, but good quality LED bulbs from Chinese manufacturers into the Korean market is causing concern among small and medium size companies (SMEs), according to a recent report by Korean media.
Currently, LED bulbs by Korean SMEs have a market price of around KRW 7,000 (US $6.8), said a representative from a Gyeonggi Providence company. Chinese manufacturers however, are marketing bulbs in large Korean supermarkets, such as EMART and LOTTE Mart, for below KRW 5,000 (US $4.8). Several Chinese manufacturers are even offering 50 percent discount deals. Unable to compete with such low prices, Korean products are gradually being booted from the shelves.
Moreover, several Korean supermarkets have started branding Chinese products with their own label and retailing them at low prices. This has created a win-win situation for Korean distributors and Chinese manufacturers by raising distributor’s income, while meeting manufacturers Korean market expansion goals. However, this is creating new challenges for Korean SMEs. Korean companies are also being threatened by the arrival of other countries products on the market. If Korean SMEs are unable to increase market competitiveness, they face the possibility of bankruptcy and foreclosure in the near future.