MLS Aims to Become a Lighting Brand and Will Reduce the Role of LED Packages in Its Business Portfolio

In a recent interview with a market research firm, China-based LED manufacturer MLS announced that it is fully committed to become a brand in finished lighting products and will be scaling back the role of LED packages in its business portfolio over the next few years.

MLS currently owns two brand names: “MLS” and “LEDVANCE”. Its strategy going forward will be primarily about building up brand recognition and opening new sales channels.

MLS said that it has been laying the groundwork for the transition during these recent years. To establish itself as a major lighting brand, the company has accumulated related expertise and studied the various strategies adopted by other players in the market. MLS has found that each product category requires the assignment of a specialist that can help develop a flexible strategy for finding client partners and distribution channels. Currently, sales of branded products account for around 70% of the company’s overall revenue.

MLS pointed out that even though the market for branded lighting products has a relatively low degree of concentration at this moment, this situation will change due to the trend of rapid urbanization and the introduction of regulations for ensuring product quality. The rise in both the expectations from consumers and the specification requirements will raise the entry barriers pertaining to technologies and innovations. Hence, MLS anticipates that the market will eventually become more concentrated and dominated by a few major brands.

When discussing the complementary relationship between channel management and product development, MLS said that branding offers two advantages. First, it assists the company in selling products of premium quality to end users. Second, it creates avenues for profit sharing among participants in the distribution and sales network, thereby forming mutually beneficial relations between the manufacturer and its channel partners.

MLS will be allocating a lot of resources into online commerce and has hired a team with an impressive track record in this area to formulate a strategy that guarantees future success.

In the aspect of product development, MLS intends to build on its existing advantages so as to create products that differentiate from competitions, deliver high additional values, and possess substantial technological content. Another important part of its product development process is the empowerment of the brand.

Regarding the state of the LED market, MLS said that the demand related to lighting applications is expanding steadily. The global market for LEDs used in lighting products has been showing annual growth rates of 10-20% in the recent years. MLS also noted that the demand for LED packages has been surging in the recent months. Many products are in short supply, and prices on the whole are on a stable but also slightly upward trend.

Additionally, MLS mentioned its strategic investment project with Xiaomi. The project is currently in the pre-application stage, and further progress will have to wait until certain policies are in place. Nevertheless, the two parties have begun initial discussion on how to proceed with cross-industry collaboration in the future.

(The above article is an English translation of Chinese content provided by LEDinside. Image credit: MLS.)

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