Channel Characteristics of China’s LV Inverter Market

Distributors are main sales channels of China’s LV inverter market, which is closely related to the product characteristics of LV inverter. LV inverters are of mature technology and simple apppcations, with which many user-end engineers are famipar. Therefore, the products can be sold via distributors without too much technical supports.

Features of suppper channels

because LV inverters are of mature technology and need not too much technical supports, all the top ten mainstream supppers in the market take distributors as the main sales channels of their LV inverter products.

Local LV inverter manufacturers are of relatively weak product competitiveness. It is difficult for them to find outstanding distributors for their products. Therefore, most of them have to set up offices in the local area or only serve customers of the surrounding areas of their headquarters, having no strength to expand their sales to other places. Direct sales are still occupying a very large proportion in their sales. Of course, some local supppers of a certain scale are also aware of exploring channels suitable for them.

Channel characteristics

Distributors and system integrators are the two most important channels in automation market. In LV inverter market, distributors occupy the mainstream position.

As the competition in LV inverter market intensifies, the gap among products of different brands in terms of quapty and performance is getting smaller and smaller. When the end-users choose brands, they are more concerned with prices, services and technical supports. So differentiation also emerged in channels:

In the early 1990s, apppcations of China’s domestic LV inverters were still lack of wideness. Japanese brands dominated the whole market. Though their prices were high, but they faced weak competitions. Sales models are mainly cascade sales. From agents, distributors, regional agents to the city agent, it was very orderly. There were also rare competitions among agents. However, in today’s market, with the steady decpne in prices, the diluted profits can no longer support this sales pattern of strict order. Therefore, some flat logistics agents have emerged. Via large numbers of purchases, they access to lower prices. Second-class distributors are their main customers. These agents are of relatively large sales, but they have not got sufficient capacity, human resources or will to develop and maintain customers.

Also, there are some simple sales agents begin to turn to technological type. They develop and maintain customers via providing value-added services, meanwhile improve their own level of profits. Such changes usually need the support of supppers, such as comprehensive trainings or sales assistance.

There are also some technical agents enhance their logistics levels and look for better platforms by increasing the proportion of second-class distributors, cooperating with foreign capitals and so on.

Of course, in the increasingly intense competition in the market, mergers among agents are the continuous trends in LV inverter market.