What Are The Major Challenges Faced By The Outdoor LED Display Market

Lets have a look to the major challenges faced by the outdoor LED display market

 

Outdoor LED displays have literally revamped the entire look of our cities. Our cities and streets now show more glitz and glam than ever before. It’s all because of the endless LED display possibilities. You may easily forget to blink an eye when seeing the mesmerizing content delivered through these nice and savvy outdoor digital displays.

 

The modern world is a global village today. There are hardly few countries that produce and consume local products. Else it’s a teamwork. Sophisticated components are acquired from various parts of the world and then the assembly unit is somewhere else. Later finished items and products are traded in other parts of the world. It’s basically a complex mechanism and involves exposure to different risks and challenges. LED display market is no exception. It is equally vulnerable to potential risks and challenges like other industries. In this article, we will discuss the major challenges faced by the outdoor LED display market.

 

Procurement of raw materials

 

Procurement is the initial prerequisite for outdoor LED display manufacturing process. Many countries like China, Japan, and India are striving to produce cheap LEDs and other related components. Besides this, the digital displays also require other electronic components. If the country is manufacturing by itself its good enough or else they need to rely on imports. One of the main challenges in international procurement is forex fluctuation. Since the forex rate is controlled by other dynamics, the problem persists no matter what. Inflation and money devaluation keeps the cost of FOP (factors of production) staggering. Moreover, note that emerging demand for LED display components also poses demand and supply issue. So, it is quite possible that even you have finance still the components are unavailable.

 

Finances

 

                      Outdoor led display

 

 

Big businesses strongly rely on banks for capital injection. In fact, they are the regular customers for any bank. International trade and imports, of course, need huge finances. Banks ensure every possible step to cut credit risk. For that matter, they specify certain stringent terms and conditions. Digital display manufacturing companies are bound to comply with the policies to obtain finances. And this is surely a big challenge in itself. Additionally, regular interest payments affect cash flows.

 

Most LED display companies fence their risk via hedging techniques. The payments remain locked to the mentioned rate for a certain contractual period. However, sooner or later forex fluctuation remains an issue for outdoor LED display market.

 

Political change

 

Do you know that China and USA have deployed approximately 4900 DOOH displays in the recent year? What if both countries encounter a rift? Any change in international politics, government, or governing policy massively affects international trade.

 

At the domestic or local level, any change in statutory policy can result in regulatory reforms of the digital display market. It can possibly alter business support packages. This has a clear impact on the supply chain system of the company, quality control, regulation and compliance with tax, and health& safety policies.

 

On the international front, declining relations with the supplier country may literally put the trade at the halt. Any change in international trade policies or government can pose supplier and financial management, and compliance issue. The supply chain remains at a constant stake to political activities. Any political revolt, disjoint or collapse can tear apart the growing outdoor digital display industry. Contrary to this an open market is a hub of opportunities.

 

Frequent technology update

 

The Outdoor LED display market needs to keep pace with time. The industry norms and technology is evolving with each passing day. To keep the competition going LED display market need plenty of resources. Frequent technology update means more finances are needed for fresh equipment. Training and refresher courses to update the skills of the staff also demand money. Additionally, it is a tough job to switch manufacturing technology. It is not easy to adopt state of the art technology as soon as it’s available.

 

                                             Outdoor led display

 

Unfortunately to sustain the LED display industry pressure this technology part can’t be neglected. It is a must thing. Outdoor LED display market is under strong pressure to provide LED solutions that offer the latest updates. Today augmented reality, 3D features and creative installation are getting popular. Motion sensor technology and interactive displays are also in demand. Renowned and reliable digital display manufacturers are playing their part in providing up to date LED displays and LED billboards. The company holds a sound reputation in China. With strong goodwill, DAKCO has established more than 5000 successful clients in 80+ countries.

 

Transportation

Since LED display manufacturers are shipping LED solution across the globe the whole process is challenging. Firstly the sensitive display screens are hard to pack and unpack. However, the risk of broken screens remains there. A slight wrong move can literally ruin the screens. Sometimes a permanent yellow spot may occur.

Also Read:  What Are The Ways To Promote Business With Outdoor Advertising Signs

Import tariffs

 

Besides this, the licensing and import tariffs are other grave issues. Remember all countries want to make money so they squeeze the buyer pocket as much as possible. Import permits and import tariffs are an unavoidable part of outdoor LED display industry. Again the rates may go higher any time according to prevailing economic conditions.

 

Import tariffs increase the price. When there is a strong competition among market players and every competitor is trying to keep the price down import tariffs is a problem. Due to varying custom duties, the same product may have a different price in different regions of the world. Because of such duties, the prices of LED products go up. There is a constant pressure in the LED display market, the customer wants the best price but tariffs are causing extra charges. Ultimately either the customer leaves or pick lower quality.

 

The pressure of continuous innovation

 

Recent innovations have really set the bar high for the customers. Now they don’t settle for anything less than the best. They really aspire what’s coming next. So, digital display manufacturers are facing undue pressure to keep on innovating.

 

Customer specifications

 

Businesses largely earn money through economies of scales. The average cost of factors of production is less for bulk manufacturing. However, outdoor LED display industry is quite different than ordinary industries. It involves a lot of specification. From screen size to pixel pitch resolution, aspect ratio, pixel matrix, and color contrast everything can be customized. Every client wishes to be different from others. Since the target audience, installation place, and purpose of each LED sign is different every LED display is individually crafted. So businesses cannot enjoy much the perks of economies of scales. We can never forget discussing DAKCO here, the ultimate LED display solution. Craft to perfection every digital display is customized and functions best.

 

Low-profit margin

 

                         Outdoor led display

 

 

The outdoor LED display market is facing continuous competition. The cutthroat competition is a healthy sign for the customer as they can have the LED billboard or LED sign at a better price. However, the manufacturers are facing the downside. To be in the race LED display manufacturers sometimes operate on a very low-profit margin. Established manufacturers and countries can lower cost because they have larger access to resources. However, new entrants find it very difficult to sustain within a low margin. Consequently either they exit the LED display market industry or else they use cheaper materials to keep the cost low. This won’t suffice in the long run.

 

Skilled labor means high wages

 

The LED displays, LED signs, and LED billboards all are hi-end products. They are sophisticated and requires a technical hand from manufacturing to installation. Employing ordinary labor is just not an option. Skilled labor definitely means high wages or remuneration. Besides money matters finding the right person for the right job is a difficult task itself. Regular training also requires finances. Since the demand for skilled LED display personnel is increasing their availability is another issue. Developed countries can attract workers at lucrative salaries. By doing so the LED display market in less developed countries may face a hard time growing. They may experience very slow CGAR as compared to other nations.

 

Placement issues

 

Billboards are undoubtedly hefty investments. Not only they are costly the associated costs are high too. The placement spot is the most valuable thing in all billboard advertising game. The prime location is, of course, the apple of the eye for every business. So, this intense demand results in rising prices. The property owner these days are well aware of the worth of prime location. And for that matter, they encash it to the full potential.

Additionally, the rising real estate market is causing billboard advertising expensive. The property prices are not the same as 5 years back.

 

Billboard permits

 

Various Governments are taking strict measures regarding billboard placement. The Highway Beautification Act 1965 in America is such a prime example. The new laws and regulation are very specific about billboard content, size, viewing distance, and installation zones. The strict rules and regulations are hindering the efficacy of new LED billboards. Besides this by doing so their commercial viability is affected. However, if you own or manage to get grandfathered billboards you are lucky indeed. The new legislation applies more stringently to the new entrant. The older permitted billboards are still operational. But their worth has gone up by manifold. Today it is really an uphill task to find confirmed LED billboard location.

 

A clean environment is a major challenge

 

LED displays and all other LED products conserve about 95% of electric current. They conserve energy more than incandescent signs. Also, since it involved no printing process so the paper is conserved and ultimately trees. Again they operate on very less voltage and power so they conserve energy too. The whole concept is clear to us but have you ever thought that establishing an entire outdoor LED display country is a real challenge in itself. Has anyone ever estimated the impact industrialization will have on our globe?

 

The recent years were very fruitful for our planet. Many countries are emphasizing in a green environment. The LED display industry is a very lucrative opportunity for investments but it has environmental consequences as well. The LED display market is under severe pressure to establish more digital display manufacturers but with less carbon footprint.

 

Wear and tear free devices

 

Wear and tear are the part and parcel of life and you can’t ignore it. Rental Outdoor LED billboards and LED signs to face more wear and tear than fixed LED displays. The reasons are apparent and valid. Transportation, mantling and dismantling from place to place deteriorate the useful life of the device. The frequent wear and tear may affect the operational efficiency of the machine and resultantly may damage the company’s repute.

 

Rivalry among potential competitors

 

The rivalry in the LED display market is heating up day by day. Many countries who formerly relied on imported LED signs and LED billboards are now trying to be self-sufficient. The Asia Pacific region is gaining pace at a prolific rate. Although healthy competition helps in industry building, cutthroat competition may manipulate the industry norms.

 

The future is uncertain

 

Despite unending benefits of LED display, the future uncertainties are still there. No doubt LED billboards are appealing due to their crisp image quality, but they are distracting too. The added features literally give real-life feeling. Of course, the charming faces displaying on LED signs and LED video walls are hard to resist. The dynamic content real grab the user attention but this can be fatal for the driver. Many times this distraction has caused accidents. It is also said that billboards tarnish the scenic beauty of the place. Keeping in view the above consequences some states of America like Alaska and Hawaii have altogether banned the billboards. Some countries have restricted the Billboard displays to the commercial area only. They don’t allow it for residential areas. If in future more countries start such restrictions massively than surely it will disturb the outdoor LED billboard market.

 

 

 

 

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