Origin of Strategy: Taking an Alternative Approach
Against the background of fierce competition in the inverter track, DEYE has taken an alternative route, choosing the then-neglected emerging markets of Asia, Africa and Latin America. This strategic choice is a textbook market insight.
Key strategic judgement
l Abandon the fiercely competitive continental, European and American markets
l Aim at the under-exploited household and energy storage markets
l Entering the emerging markets with low cost and cost-effectiveness
Market breakthrough: first to explode
In 2023-2024, DEYE seized the key market window:
Rapid rise of South Africa market
Accelerated release of India and Pakistan markets
Surging demand in the Middle East and Southeast Asia
While peers are still mired in European de-stocking difficulties, DEYE has taken the lead in traversing the global household storage cycle and achieved leapfrog growth.
Competitive Advantage Analysis
1. Cost control
l SBT localisation rate over 50%
l Low cost of institutional lines
l R&D and sales expense ratio is controlled at 23.94%.
l Gross Profit Rate 52.33%
2. Market penetration
Ranked top three in South Africa, Brazil, India and other markets
Initially adopt low price strategy to build up the brand quickly
Deeply bonded with large local distributors
Overseas localisation: a breakthrough
Going overseas is not the same as exporting, and globalisation is not the same as internationalisation.
On 17th December this year, DEYE announced a major strategic initiative:
l Invest up to US$150 million
l Establish localised production capacity in Malaysia
l Proactive response to changes in trade patterns
This decision reflects the company’s strategic thinking about the global market.
Market Map and Growth Expectations
Emerging Markets Growth Rate
l PV demand growth rate in Asia: 37%
l South American PV demand growth rate: 26%.
l Demand growth in Africa: 128%
Outlook
According to the annual report of 2023, DEYE’s PV business achieved revenue of 5.314 billion yuan, up 31.54% year-on-year, of which, inverters achieved revenue of 4.429 billion yuan, up 11.95% year-on-year, accounting for 59.22% of the company’s total revenue; and energy storage battery packs achieved revenue of 884 million yuan, up 965.43% year-on-year, accounting for 11.82% of the company’s total revenue.
Strategic points
As we all know, the Asia-Africa-Latin America region has maintained rapid economic development in recent years, with great market activity and potential. For enterprises seeking market expansion and growth, the Asia-Africa-Latin America region is undoubtedly a market worth paying attention to and looking forward to, and the company has already begun its layout in the region, and the company will continue to tap the Asia-Africa-Latin America market opportunities in the future.
Strategic underpinning: beyond the manufacturer
In the global new energy track, DEYE illustrates the strategic wisdom of ‘taking a different path’ with its actions. By avoiding the red sea market, entering the emerging market and continuously promoting the localisation strategy, DEYE is writing a unique growth story in the global new energy market, transforming from a single manufacturer to a systematic solution provider, and building a differentiated competitive advantage in the new energy track.
l Sharp market insight
l Forward-looking strategic layout
l Rapid Response Execution Capability
Post time: Jan-03-2025