Thai LED Manufacturers Turn to EMC Models as Luminaire Prices Tumble

Plummeting LED bulb prices has been a major issue around the globe, and the brunt has been felt by Thai LED manufacturers in a way more than ever before. LED bulb and tube prices have fallen drastically over the past year, as much as 50% for LED T8 tube lights. With prices hitting rock bottom, growing number of LED manufacturers are switching to EMC models, according to LEDinside interviews at Ecolight Tech Asia 2015, which took place from Nov. 19-21, 2015 at Queen Sirikit National Convention Center (QSNCC) in Bangkok, Thailand.

Eve Lighting staff at the booth posing for a photo shoot. Joep de Vries, International Sales Director of Eve Lighting is standing in the center of the picture. (All photos courtesy of LEDinside) 

In Thailand LED prices are nearing that of traditional lights, due to very cheap Chinese products flooding the market. 7W LED bulb prices have reached about 100-200 Thai baht in local TESCO retail shops, said Joep de Vries, International Sales Director of Eve Lighting. The market in Thailand is still largely a replacement lighting market similar to Thailand, Malaysia, Philippines, India, and Indonesia, he added. The Thai market remains largely price driven. 

Joep de Vries, who has been in the lighting industry for two decades and a former Philips employee, observed the LED market was following the same path as incandescent’s swap to CFL. “The changes are mostly by force, through government policies,” he explained. A trend that has been consistently observed in the Thai LED market in the last two years. 

PEA Encom's LED T8 tube lights backed by the PEA are being priced at around 399 Thai baht each. 

LED T8 prices plummet more than 50%

The best selling products in Thailand has been T8 LED tube lights this year. “Last year it was about 50-50 for LED T8 tube lights and LED T5 tube lights,” said R. Scott Kern, Vice President and General Manager of Soitec Lighting. Yet, fewer consumers are purchasing T5 LED tube lights this year. “This is mainly because government subsidies for T8 tube light transition to T5 LED tube lights have ended,” said Howard Huang, Managing Director of TP Lighting. Prices for the most common LED product seen in Thailand were down about 50%. Last year the LED T8 tube lights with 100 lm/w efficiency were being sold for 700 Thai Baht (US $19.06), but this year retail prices have been marked down to 400 Thai baht, said Naphat Akkharinpalust,Sales Manager, Unistar Opto. 

Other manufacturers noted the LED T8 tube light previously retailed for around 1,000 Thai baht last year are now selling around 400 Thai baht. Products priced at around 700 Thai baht are no longer competitive on the market, as growing number of manufacturers slash LED tube prices to about 400 Thai baht.

John Yang, Manager, Lighting Business Department, Sweoo, Laster Tech posing in front of the company's highlighted residential and retail lighting products at this year's show. Smart dimmable and color tunable lights left of Yang are the products the company are promoting in the Thai market this year.

At the trade show, Taiwanese LED manufacturer Sweoo slashed LED T8 tube prices from to 100 Thai baht in a promotion stunt. “We are selling the products at a lower price than market retail price to attract buyers at the show, and boost our brand recognition,” said John Yang, Manager, Lighting Business Department, Sweoo, Laster Tech. “The aim is to attract people to buy and try out the tube lights.”

Narongchai Kitrangsikul, Marketing Director, Specailty Tech Corporation, a distributor for PEA Encom.

Growing numbers of Chinese imports have driven down LED bulb prices in Thailand, but local Provincial Energy Agency (PEA) policies of promoting consumers usage of LED T8 tube lights on the market has further contributed to the price decline. PEA Encom, a subsidiary of PEA, has partnered with TP Halo to launch LED T8 tube lights priced at 399 Thai baht on the market this year, said Huang and Narongchai Kitrangsikul, Marketing Director, Specailty Tech Corporation, a distributor for PEA Encom.

Consumers remain very price sensitive in the Thai LED market. Prices were cited as consumers main concern, followed by the luminaries efficiency. Most consumers are looking for luminaries with higher efficiency, and warranty of at least three to five years for tube lights in commercial projects, said manufacturers at the show. Clients are also asking for LED tube lights with wider beam angles, said Akkharinpalust. The company which imports its products from Taiwan pointed out beam angle in their tube lights have increased from 120 degree beam angle to 180 degree beam angle to meet client demands. Other manufacturers on the market are even adding more LED chips to achieve omnidirectional lighting in tube lights, she added.

Streetlights prices slide 10-20%

Compared to general lighting products, LED streetlight prices decline was less steep. The price fall ranged between 10% to 20%, according to manufacturers. At the moment a 110 lm/W LED streetlight with 5-year warranty ranges from 10,000 Thai baht or US $300 to 37,000 Thai baht. Most manufacturers are collaborating with governments, factories, and industrial parks on these projects. Racer Electric, which sold its 110 lm/W LED streetlight with 5-year warranty at a premium price of 30,000 Thai baht also offered clients that ordered in bulk a discount of up to 30%, said a Racer Electric product design specialist.

Precise Green Product marketing specialist LEDinside spoke to holding the company's LED bulbs and other products. The company's streetlight prices have gone down about 20% this year.

LED streetlights with a shorter lifespan of 110 lm/w efficiency and around 3-year warranty have seen prices decline the about 20% from January to present this year, said a marketing specialist from Precise Green Product. PEA has been the company’s main client, and they have installed their streetlights in Nakhonnayok and Pathumthani provinces, and PEA’s 77 branches throughout Thailand.

Pimonpat Singhapuck, Project Manager, Acrolux posing next to the company's IP-68 rated LED streetlights.

Most of the streetlights seen at the show were conventional LED lights, with an emphasis on weather proof designs. Thai LED manufacturer Acrolux, showcased its best selling IP-68 rated LED streetlight. The streetlight has an energy efficiency of 120-150 lm/W, and was retailing its lights from a price range of 9,000 Thai baht to 15,000 Thai baht. Depending on the spec of the lights. “Previous product prices have dropped as much as 50%, but newer product prices are much higher,” said Pimonpat Singhapuck, Project Manager, Acrolux.

Panuwat Chavalit, Marketing Supervisor, Civic Media posing next to the company's IP-66 rated LED streetlights.

Civic Media displayed its in-house designed IP-66 rated LED streetlights that use Cree LED chips, and have a three year warranty, said Panuwat Chavalit, Marketing Supervisor, Civic Media. The company also launched an in-house designed new streetlight product with better thermal dissipation design, using aluminium extrustia, said Chavalit. Compared to aluminium streetlights using aluminium bracket thermal dissipation was much lower.

AOD's 3-in-1 LED streetlight product integrates security cameras and wireless Internet hot spot functions into the LED luminaire.

Chinese LED luminaire manufacturer AOD distributor, Thaixin Resources, displayed a very interesting 3-in-1 LED streetlight product at the show, that has not been installed in any Thailand projects yet. The LED streetlight imported from China integrated security cameras with wireless Internet hot spot functions. “The 2-in-1 LED streetlight that integrates LED streetlight with Internet hot spot, has already been installed in China,” said Initira Busayaonont of Thaixin Resources.

Manufacturers switching to EMC models

Low LED prices on the Thai market has led to manufacturers choosing strategies to divest risks from solely investing in general LED lighting products, but there are high risks involved in making innovative products that might not meet market demands. Interestingly, more LED manufacturers are preferring to sign Energy Management Contracts (EMC) or also known as Energy Performance Contracts (EPC) in Thailand with clients for large scale commercial and government projects. 

R. Scott Kern, Vice President and General Manager of Soitec Lighting (left) and Christina Yeo, Sales and Business Development Manager Asia Pacific, Soitec Lighting (right) pose in front of the company's Digimeg product that integrates LEDs into glass panels for archtainment and advertisment applications.

Soitec, a France based company, has divested its product portfolio with archtainment by integrating LED lights into glass building materials and retail sector. However, for its LED T8 tube light products it prefers using EMC models, where a million dollar project can be instantly quadrupled into four million dollar revenue. Return of Investment (ROI) and payback time for end users are often six to nine months for these projects, said Kern. By using 150 lm/W LED tube light retrofits in Paris metro, Soitec was able to shorten authorities targeted ROI period by halve, from five years to three years, he added.

Countries with higher power prices are able to reach their targeted ROI in a much shorter period than in Thailand where power prices are lower. In Thailand the projected period is often close to one year for LED T8 tube light retrofits using the EMC model.

Initira Busayaonont of Thaixin Resources posing next to the company's LED streetlight projct for PEA. The company is considering to shift its business model to Energy Management Contract (EMC) based in the future, she said.

In the streetlight sector in Thailand several manufacturers are also using EMC models instead, such as Precise Lighting, while others such as AUO are aiming to adopt the same model. Manufacturers are preferring EMC models because they are able to deliver consumer’s targeted low price, and profit at the same time. 

For the time being is less costly and involves lower risks compared to investing huge resources in R&D, and facing uncertainties in the ROI. With the uncertain economic outlook situation still present in Thailand, many manufacturers are trying to reduce risks and taking more conservative measures to secure revenues. 

(Author: Judy Lin, Chief Editor, LEDinside)

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