According to the report, “2021 Global Lighting LED and LED Lighting Market Outlook-2H21,” published by TrendForce, the LED lighting market size in China will surge by 8.9% to $5.75 billion in 2021 mainly because of various government support policies and investment dividends derived from infrastructure construction. Recently, the Chinese government mentioned that—in its 14th Five-Year Plan—the mechanism promoting the use of energy-efficient lighting products must be improved. Such announcement will further boost the penetration of LED lighting in China, which is expected to reach 75% in 2021. In the future, the Chinese lighting market will turn to focus on product segmentation and specialization as well as smart system establishment.

Such a promising market has no doubt garnered multinational lighting companies’ attention and interest, including GE Current, a Daintree company (hereinafter “GE Current”).

The North American brand GE Lighting needs no introduction. In 2015, GE, using its own lighting, digital, and energy management technologies, founded Current, Powered by GE, which is a separate company from GE Lighting. In 2016, due to the strategic adjustment decision made by GE Lighting’s executives, GE Lighting withdrew its lighting business from Asian markets including China. Two years later, GE Group sold its subsidiary Current to American Industrial Partners, a New York-based private equity firm. Today, Current has again returned to China, but why? Also, to win customers’ trust, how will Current plan its market strategies and what are its expectations for this gigantic Asian market?

To find the answers, TrendForce’s optoelectronic research division LEDinside interviewed Mr. Jacky Shen, Sales General Manager in the Asia-Pacific of GE Current, where Mr. Shen answered the said questions one by one.

Starting Over to Provide Better Services in Chinese Markets

As a typical economy where production and consumption coexist, Chinese markets are highly complex and diverse. Regarding production, China has become the world’s factory of lighting products. As the data compiled by TrendForce indicate, more than 70% of lighting products are now made in China; the country’s supply chain advantage is further highlighted after the COVID-19 outbreak. Additionally, there are a variety of products in China, where various manufacturers promote differentiated products to distinguish themselves from other competitors. Regarding consumption, Chinese consumers are having greater purchasing power with the economic rise of their country, hence the demand for better lighting products in both the B2B and B2C markets.

“The 2016 withdrawal of GE Lighting from China, which is a highly promising market, was not a defeat. Instead, the withdrawal decision was made to adjust group-level strategies based on internal product integration,” said Shen. In fact, GE only pulled its business out of the consumer lighting market in the Asia Pacific but has remained active in the professional lighting market across the region.

At the same time, other multinational lighting giants also adjusted and transformed their business models because of the pressure arising from their LED business transformation.

“To GE Current, pulling back from China gave the company a chance for a major and real transformation with regard to its organizational structure and customer networks, not just some trivial changes. Such a big evolution is advantageous to GE Current for better development. Starting over is more effective than slight adjustments,” Shen continued. He added that what executives of GE Current wanted was to fully break down the original organizational structure and rebuild it according to the new strategic plans.

Mr. Shen believes that GE Current is experienced in lighting applications; the original team serving in China comprises senior members doing research in the lighting field for years, which is the most valuable asset for the company. As long as the lighting giant finds its position and adopts appropriate strategies, any time is good for GE Current to re-enter Chinese markets.

Focusing on Professional, Segmented Lighting Solutions to Accurately Meet Chinese Customers’ Needs

TrendForce’s research shows that Chinese markets are heading for product segmentation and product specialization, such as high-end commercial lighting, smart lighting, human centric lighting and agricultural lighting.

Presently, GE Current intends to focus on segments of industrial, outdoor, agricultural and disinfection lighting once it re-enters Chinese markets. Shen specified that, in each segment, the enterprise has to provide professional, large-scale, flexible and diverse services. Through various product portfolios, the lighting company will offer professional products that meet the needs of segmented markets. Therefore, it can strengthen customer stickiness and loyalty and then become the closest lighting consultant for architects, designers, and proprietors.

Source: GE Current, a Daintree company; summarized by TrendForce

GE, as a brand, has long been known for its high reliability and adaptability for various application scenarios in industrial and outdoor lighting markets, where the brand enjoys high reputation and market shares, particularly in North America. Shen is also optimistic about GE’s development in China and expects double-digit growth in industrial and outdoor lighting markets between 2021 and 2022, which is much higher than other regions. Shen’s opinion suggests that GE Current has high expectations for the said lighting sectors in China.

Concerning outdoor lighting, as LEDinside reported, GE Current has launched an integrated street light with corresponding solutions in China. The integrated street fixture is conducive to modern industrial design and eliminates uncertainties caused by illumination functionality and reliability, thereby satisfying customers’ demand for the combination of lighting aesthetics and industrial manufacturing. The product not only inspires designers (e.g., design institute) but creates a new image for smart city construction.

Regarding agricultural lighting, GE Current has performed well in North American and European markets as horticultural lighting thrived in 2020. However, the US-based company will not just copy the business model that made it successful in Europe and North America to China; instead, the company will rationally develop suitable strategies.

GE Current also released disinfection lighting products in China. The products—serving simultaneously as a light and sterilizer—are targeted at hospitals and nursing homes.

GE Current is now striving to expand its business in first-tier coastal cities as well as the emerging Central China and Southwest China; the company attempts to work with professional partners of different segments and be more open-minded while concentrating on lighting business . After its major shareholder AIP takes over, GE Current will have more resources to achieve its goals in Chinese markets, where the company can establish a whole-new brand image emphasizing win-win cooperation and resume its glory.

(Written by Christine Liu, analyst of TrendForce)