The late Guangzhou International Lighting Exhibition 2011 won supports from 2, 600 enterprises, including ESTO Lighting (Australia), General Electric (US), Osram (Germany), Philips (Holland), QSSI (US), Reggiani (Italy) and received visitors and exhibitor groups from Korea, Japan, Singapore, UK and the US. During the exhibition, LEDinside was honored to interview Mr. Xiaoning Lin, Deputy General Manager of Unilumin Technology Co. Ltd, who introduced their unique market strategy and sales channels which had led the Unilumin’s sales growth to almost double every year.                    

              
The net profit compound annual growth rate as high as 83%

Mr. Lin told us that Unilumin, founded on October 26th, 2004, is a leading LED supplier of LED products and application solutions in China. With integrated R&D, manufacturing, sales and service systems, Unilumin is engaged in providing high-quality and good-performance LED application products and solutions for both professional channel customers and terminal customers. Its main products fall into two categories: energy-saving full color HD displays and energy-saving LED lighting series.

Since its foundation 7 years ago, the sales compound growth rate is able to reach 45.5% and the net profit compound annual growth rate as high as 83% in the past three years. In 2010, displays accounted for 92% of Unilumin’s total sales while LED products took up 8%. Although sales of LED lighting are quite small compared with LED displays at current stage, Mr. Lin predicted that Unilumin’s LED lighting will overtake display in sales within 4 years.

Investment Oriented by Customers and Product Characteristics

Mr. Lin stressed the fact that Unilumin is able to realize almost double CAGR mainly benefits from the right market orientation as well as the proper and forward-looking development strategy.
 
In choosing materials like LED wafers and chips, Unilumin will take full account of customers’ needs and characteristics of the required products. Meanwhile, it will accordingly make appropriate assessment with advanced domestic and foreign test equipment based on its own complete testing evaluation standards to ensure the good performance of LED chips.

In package, Unilumin has its own R&D and production technologies. Its wholly-owned subsidiary AOGLED specializes in developing, producing and marketing SMD LED and can meet 20% of Unilumin’s order commitment.

In market sales, according to Mr. Lin, due to the national promotion of energy saving, emission reduction and green lighting project, Unilumin has won a series of government bidding projects, including high tech LED displays for Tiananmen Square, LED Displays for Shanghai World Expo 2010; Shenzhen’s local projects such as street lights in Guangming District, 60W warm white LED street lights in Futian Village, street lights around the Civic Center.

As Unilumin also pays attention to oversea market development, its products have passed the national and international quality certification, including CE, FCC, ETL, GOST, CCC, UL, GS, CUL and relevant ROHS certification. Besides, it is also the first Chinese company to be certified in accordance with AS/NZ 1158.6. These certificates not only fully recognize the company’s LED product performance but also open the door to oversea markets like the Europe and America. Currently, Unilumin has completed some LED street lamp bids outside China such as Florida, Indiana in the USA, Spain, Germany and Australia. In the Guangzhou International Lighting Exhibition, many foreign customers showed strong interests in Unilumin’s products and tested street lamps, indoor replacement lamps and bulb lamps by themselves in the pavilion.

LED Industrial Design to Endow Products with Character for Survival

Mr. Lin said that the unique LED design also plays an important role in attracting customers from home and abroad. He believed that LED product package design equals to a person’s character. A product without character will finally be eliminated from the market competition.

In his opinion, China’s LED makers still have many shortfalls in comparison with foreign giants, which is largely related to current development of LED lighting market and lighting enterprises in China.

The majority of lighting enterprises are copycat businesses so eager for quick success and instant benefits that the whole market appears impetuous. On the other hand, there are about 10,000 lighting companies in China, 99% being small and medium-sized ones. Large-scale ones with market value over RMB 1 billion or market share over 1% are very few. Most enterprises basically don’t have any strength for R&D and technical storage, some even unable to carry out a long-term development strategy. In this case, it is hard for them to make a good LED industrial design.

In order to overcome the problem, Unilumin has been closely following the market development and has invested a large amount of human resources and capital in the establishment of long-term university-industry collaboration with top Chinese universities like Tsunghua and Fudan. Based on its own strength, it further relies on the R&D and design ability of higher institutions, presenting a relatively satisfying solution.

Seeking Cooperation with Various Parties and Focusing Investment on LED Lighting

According to Mr. Lin, in terms of display, Unilumin not only takes the lead in China but also ranks top 10 in the world but it will not stop its advancing steps because of the achievement. He remarked that new LED applications are continuously being developed as LED technologies are upgrading. In the future, the company will keep market-oriented and continue following the development of LED industry and technologies, the trends of government policies and LED markets to consolidate its leading advantages both at home and abroad. Since Unilumin is optimistic about LED lighting, future investment will be focused on lighting products development.

Besides, he also mentioned that with the development of new LED technologies and applications, customer needs will be so diversified that Unilumin alone cannot meet all the needs. Thus the company will become more open to cooperate with other industry players.

Optimistic about “10 cities 10,000 lights” Phase II Project in the Hope of Government Subsidies for LED Purchase

China has been encouraging LED green lighting development to boost the energy saving and emission reduction. As a positive response to the government appeal, Unilumin is conducting related product tests and certification. Although it is recognized industry-wide that the Phase I pilot project of “10 cities 10,000 lights” program may not well be called a success, Mr. Lin believed that certain LED application technologies in China as well as part of LED street lamp technologies had become very mature. With continuous technical progress, the promotion of Phase II project of the “10 cities 10,000 lights” program will come out better than the previous one. Unilumin will keep close attention to and take part in the project.

Mr. Lin added that there are government measures on purchase subsidies for CFLs so LED lighting promotion can be carried out with subsidy supports. He regarded government subsidies as one way to cultivate LED lighting market and predicted the fall of LED price in future. Furthermore, with cost reduction, LED lighting is likely to realize full marketization.

Unilumin Experiences

Mr. Lin said at present, many people from lighting or other industries have changed their careers into the LED lighting industry. However, they soon found out the LED market a chaotic and difficult one after entering it. In this case, Mr. Lin suggested that the enterprise should be guided by market orientation, follow proper order to make steady progress and keep up with LED technology development if it seeks long-term development and some achievement in the LED lighting industry. This is also an important principle in Unilumin’s rapid development.

Besides, it was also his idea that the characteristics of LED lighting market and channels are different from those of traditional lighting. Traditional lighting products can be sold through traditional distribution channels but LED lighting products can be promoted through new channels like replacement project or government subsidies. Following the market law of LED lighting development, enterprise development will yield twice the result with half the effort. Otherwise, business development is expected to meet many obstacles ahead.

Insights from LEDinside
 
The “10 cities 10,000 lights” program, i.e., the application demonstration project of LED municipal lighting will enter the second phase in 2012, covering 50 cities such as Beijing, Shanghai, Shenzhen, Wuhan, expected to stimulate the demand of 2 million LED street lights. Plus the launch of new green policies by local government at various levels, LED will gradually lighten up the market in Asia.