Despite the stagnant outlook for the global LED market, CiviLight’s oversea orders see a sharp surge in 2012 – the company’s oversea LED light bulbs orders exceeded 1 million units for July alone. Recently, LEDinside conducted an interview with Mr. Irving Pan, Director of Corporate Strategy and Global Markets Development of CiviLight, in which he shed light on the company’s experiences in the LED indoor lighting market and shared his opinions on the current LED market development.
Mr. Irving Pun, Director of Corporate Strategy and Global Markets Development of CiviLight
Self-owned Brands and Distribution Channels are Most Integral
Since the establishment of CiviLight’s two major lighting brands CIVILIGHT and V-LIGHT, the company has stood firmly by its global-based strategy, succeeding in pushing its self-owned brand products into the EU, Eastern Europe, Northern America, Southern America, Japan, Southeast Asia, South Africa, and Asia Pacific region. Presently the company owns more than 200 LED patents worldwide, including 9 international patents and 27 invention patents.
Mr. Pun stressed that CiviLight always believes self-own brands and distribution channels are most crucial to a company’s development. At present, strengthening the brand awareness is even more important than establishing distribution channels. Just like the traditional lighting market, the LED lighting market also needs a wide variety of products. Therefore, brands and channels will play the key role in the LED lighting market. In order to succeed in the commercial lighting market, a company needs to first succeed in the household lighting sector. Due to the fact that the clients in the commercial lighting market usually need their orders to be specialized and customized, a company should first improve its products and solutions and build a good reputation in the industry in order to acquire large market share.
Focus on LED Indoor Lighting, Target Both Chinese and Global Market
Given the climbing market demand over the recent years, with more than a decade of experience in LED lighting R&D, manufacture, and sales and a focus on LED indoor lighting, CiviLight has a very specific vision and goal as far as the development of LED lighting products are concerned. The company not only has been improving its products’ specifications, but also always sees the LED lighting products’ luminous efficacy as the basic requirement. The company holds themselves to high standards in terms of luminous efficacy, light perception, and color rendering index, in the hope of reaching the international benchmark.
Mr. Pun noted that aside from CiviLight’s continuous effort in expanding its distribution channels in the oversea LED lighting market, the company also begins to target the Chinese market. On account of the fact that there has not been a dominant brand in China’s LED lighting market, it is the perfect timing to make inroads into China and establish distribution channels. With the focus remaining on the R&D of indoor lighting products, the company plans to release more new products catering to the needs of Chinese clients. In the meantime, the company is seeking joint efforts with respected Chinese firms, aiming to establishing CiviLight as a big-name and influential brand in the Chinese and global LED lighting market.
Outlook for LED Lighting Market Looking Up, High Prices Remain the Biggest Obstacle
As far as LED lighting products are concerned, Mr. Pun believes that light bulb, spotlight, light tube and PAR light are the stars in the market, while downlight and some new LED panels light’s popularity in various regions has also been hiking. With respect to the fast developing LED light bulb market, 60W equivalent LED light bulb will become the star for 2012. However, prices of 60W equivalent LED light bulbs (with a luminous efficacy of 800lm) are around US$25 in the end market, which is still relatively high compared to those of traditional lighting products. The high prices in the end market are the main reason why LED lighting has yet to reach a wide adoption around the world.
On the other hand, Mr. Pun stated that in the night clubs, commercial shops, offices, assorted industries, and households, LED lighting should incorporate smart control and become a part of interior lighting, transforming into a safer and more user-friendly lighting solution.
Competition in Chinese LED Market Intensifies, Optimum Competition in Dire Need
According to LEDinside research, the amount of Chinese LED companies has increased rapidly from 200 to 8000. Due to that LED lighting market has not hit the mature stage and that the Chinese LED lighting industry is still in development, global big-name lighting firms’ entries into the Chinese market intensify the already cutthroat competition. As a result, LED companies around the world have yet to really turn the great prospects of LED lighting market into substantial profits.
Mr. Pun further noted that with global major lighting firms’ proactively making inroads into the Chinese lighting market, Chinese LED companies have to analyze their own strengths and weak points as well as the LED market trends rationally.
Pun believed that as Europe and U.S.’ economic outlooks worsen, Chinese LED lighting companies will be facing a severe challenge given that oversea orders account for a bulk of their businesses.
Pun also stressed that Chinese LED companies need to continue bettering themselves in terms of core technology, quality assurance, market strategy, company operation, distribution channels, and after-sales service. Furthermore, the companies need to assure their corporate social responsibility (CSR), optimize the product specifications and market positions, strengthen cooperation with global and domestic companies, respect the fellow companies’ patents to avoid engaging the whole industry in a vicious competition. The companies should jointly strive to maximize the value of LED industry and set up their self-owned brands. Only with a healthy development of the LED industry can Chinese LED-related firms stand on their feet and become more competitive.
LED Lighting Market Hit Saturation, Flexible Marketing Strategy Becomes Crucial
The establishment of distribution channels and market position is a time-consuming process. Therefore, given that the LED lighting market is still in the initial stage where most companies have yet to develop their own brands, traditional lighting companies which own distribution channels have a very obvious edge. Presently, most firms lack of distribution channels, so they are forced to start a price war, which in turn incurs a vicious price competition before the LED lighting even reaches a wide adoption. If this price war continues to dominate, it will greatly hurt the future development of the LED industry.
Mr. Pun suggested that every Chinese LED lighting firm should face the challenge head on and seize the opportunity of making inroads into the global market. The companies should research the preferences, traits, and import rules of different markets and conduct in-depth analyses on them to determine their own strategies. Also, the companies should have an adequate product strategy according to their respective strengths, improve yield rate and quality assurance, set up an effective strategy for making way into the global market, set up a competent sales team, and most importantly, seek joint efforts with companies in the target markets.