Bright future for Chinese lighting products
Innovation helps keep LED firms atop their game despite overseas sales dip last year
China’s lighting product enterprises should focus on the development of new innovative products to better meet demand from emerging markets, said executives and experts.
“We have developed varieties of new products, which mainly target emerging markets in the Middle East, South America, Southeast Asia and Africa,” said Jiang Ying’ou, a sales manager at XS LED Lighting.
China’s exports of lighting products reached $56.3 billion in 2023, down 7 percent year-on-year, according to the China Association of Lighting Industry.
Among the lighting exports, up to 88 percent are LED light source products, the association said.
The development of new products with cutting-edge technologies would help promote sales and profits for XS LED Lighting, which is based in Guzhen town of Zhongshan, Guangdong province.
“There is potential market demand in emerging markets, especially in the Middle East and North Africa, where construction of infrastructure projects has kept progressing, with surging demand for LED products,” said Jiang.
The company’s sales in North Africa have increased sharply where prices are lower but quantities are very large. “We are developing new products, aiming to increase the unit price of LED products in the African market,” said Jiang.
Sales of the company reached nearly 30 million yuan ($4.15 million) last year, with a lower year-onyear increase due to fierce price competition in the LED market. “Sales and profits are low because of lower prices, although the quantity of products has increased,” the sales manager added.
China’s exports of lighting products to developed markets such as Europe and the US decreased in 2023. However, shipments to emerging markets grew steadily, especially to countries and regions involved in the Belt and Road Initiative, said the association.
“Emerging markets such as Southeast Asia have become important destinations for China’s lighting products,” said Liu Shengping, executive director of the association.
Citing a recent international lighting fair in Frankfurt, Germany, in which a higher number of Chinese lighting companies took part, Liu said the future for Chinese companies looks bright.
“Everyone at the Frankfurt event has not only seen the weakness of developed markets in Europe and the US, but also captured business opportunities for the development of the lighting industry in China,” said Liu.
The number of enterprises above a designated size (those with 20 million yuan or more in annual revenue) in China’s lighting industry increased 4.4 percent year-on-year in 2023, with the number of those specialized in smart lighting appliances up 18 percent, Liu added.
In the domestic market, the sluggish property sector and the rise in supply chain costs have had an impact on the lighting industry. “However, there are still many positive signals, including the government’s support for the transformation of urban villages in megacities and guiding collective lands to enter the real estate market,” said Liu.
Also, the government’s support for small and medium-sized cities to accelerate construction of affordable housing and address the demand for affordable housing for new citizens would help promote development of the lighting industry. “Investment in key infrastructure projects in the Guangdong-Hong Kong-Macao Greater Bay Area, including road expansion, park renovation, road and bridge construction and other investment in public facilities would help provide great business opportunities for lighting companies,” Liu said.
Developing innovative LED products with more variety, high quality and competitive prices is key to sustainable business growth, said Deng Qiuping, general manager of Zhongshan Innovation Valley Co Ltd.
“We have to break through the current situation, which features lower market demand but fierce price competition, through research and development of more innovative LED products,” said Deng.
The company has already invested up to 30 million yuan in research and development of new products in the last six years, which helped it to stop sales from declining in 2023 amid a global downward trend for the LED lighting market.
The company’s older-styled products were mainly sold to Southeast Asia, where unit prices and the market demand were both lower, according to Deng.
Looking at an innovative LED lamp designed by a top-tier designer from the Academy of Arts and Design of Tsinghua University, Deng said the company’s products being promoted this year are totally new and innovative items.
“We need to develop innovative products with competitive prices to seize market opportunities,” said Deng.
In addition to traditional markets in Europe and the US, the Zhongshan-based company has also been looking for new business opportunities in emerging markets. “Market demand in the Middle East and Africa has kept growing in recent years,” said Deng.
To attract more overseas buyers, the company displayed its latest lighting technologies and innovative products at a recent international lighting fair in Guzhen town, dubbed “China’s lighting capital”.
Guzhen’s lighting industrial output value reaches more than 100 billion yuan annually, accounting for 70 percent of China’s lighting market, according to the fair’s organizers.
The fair, held in late March, featured the latest innovative lighting products and technologies from thousands of Chinese companies and drew more than 2,200 international buyers from 132 countries and regions, according to the organizers.
The products in the fair’s main venue covered the entire lighting industrial chain with numerous subcategories ranging from smart, decorative, residential, commercial, outdoor and cultural tourism lighting to lamps and equipment accessories.
The organizers said 21 lighting industrial projects with fixed investments of more than 1.5 billion yuan were signed during the lighting event’s opening ceremony. The projects are expected to generate an annual output value of about 2 billion yuan.
Smart technologies and green elements have become new highlights of exports in the expanding lighting industry in Zhongshan, said Ou Decheng, executive vice-chairman of the local lighting industry association.
“The concentrated smart lighting industry chains are a competitive advantage for Zhongshan’s lighting fixtures in the global market,” said Ou.
The market share of lighting products from Zhongshan in the global market is surging, especially in Southeast Asia, the Middle East and Africa, Ou added.
The export value of lighting products and their components in Zhongshan witnessed a year-onyear increase of 41.5 percent to 3.02 billion yuan in the first two months of this year, mirroring the booming lighting industry in the city, according to local Customs.
The Guzhen government has also actively built platforms, strengthened information exchanges and helped break down trade barriers for local lighting enterprises to tap overseas markets.
“We guide companies to win orders, participate in multiple international exhibitions, and promote financial services such as export credit, export settlement and export insurance for companies,” said Ruan Zhili, mayor of Guzhen.
“We hope to further strengthen the international development of the local lighting industry, especially to lay a better foundation for exports.”