Foshan Lighting announced it signed a RMB 400 million (US $64.24 million) agreement with a distributor, according to a company announcement on Monday.

The above contract is a procurement plan, and will have no impact on the company’s future operations.

According to understanding, at a recent meeting with 500 distributors, company representatives including Foshan Lighting Chairman Jie Pan, largest shareholder Zhuang Jianyi, and company president Xinming Liu and others all attended.

Foshan Lighting Upgrades to LED 2.0

In recent years, through trial and error Foshan Lighting upgraded to generation LED 1.0, said Pan during the meeting’s opening remarks. The company is entering another phase of metamorphosis, but this window of change is very short and will occur in the next three to five years. The sliding economy in recent years, and the emergence of new technologies have impacted existing business models. As the environment becomes increasingly competitive, Foshan Lighting is facing the challenges of upgrading to LED 2.0.

In the future, Foshan Lighting will be making adjustments based on consumer purchase habits and methods. The company aims to promote distribution channels in local communities to improve end market services. E-commerce has become a major trend right now, companies will need to have strong product cost/performance (C/P) ratio and offline presence. Foshan Lighting has advantages in both online and offline markets. Therefore, in the e-commerce era manufacturers can no longer passively wait for business opportunities, but need to proactively install products and offer experience shops.

In 2014, Foshan Lighting established its e-commerce department, and has made adjustments in R&D, production, and sales to adapt to changing market demands. The company will continue to invest in brand building and market research in 2015.

In the rapidly transforming technology era, manufacturers will be easily eliminated if they do not follow market trends and slow to react, said Liu. Past technology giants Nokia, Motorola and Kodak quick demise serve as good reminders of the consequences of a company’s inability to adapt.

Company reaches 2014 sales target earlier than expected

In 2014, Foshan Lighting had strengthened the establishment of exclusive retail stores. The country held a meeting with 200 distributors to set up its commercial lighting department, and released its major distribution channel “Renowned Craftsman Association.” The company has reached its 2014 sales target earlier than expected, and with strong investment and manufacturing capacity, Foshan Lighting’s market performance was outstanding.

In 2015, the company’s Mingjianghui products were classified, and Foshan Lighting started to focus on luminaire promotions.

Foshan Lighting 2015 development plan

In 2014, Foshan Lighting’s overall sales performance in distribution, exclusive retail shop, e-commerce and professional construction all had excellent sales performance, said Liang Guang, General Manager, Sales, Foshan Lighting.

Companies that excel in market analysis usually share three major characteristics: Establishing a strong sales team, emphasizing differentiation of distribution channels, and strengthening LED end market. Therefore, distributors need to actively adjust.

LED lighting market is similar to the world of Chinese kungfu, where different manufacturers have formed various factions, said the company’s LED business general manager Wenji Chen. The homogenous LED lighting product market reflects companies lack market position strategies, and long term development plans. “Most just want to invest large sums of money to achieve quick success,” said Chen. Foshan Lighting’s “arsenal” of LED products include T8 tubes, bulbs, shadowless T5 tubes, downlights, troffers, and floodlights.