Bright future for Chinese lighting products

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-on-year 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.