LED and e-tailing on the rise: the Spring 2014 Hong Kong Lighting Fair Survey
15 May 2014
LED applications have proliferated in both commercial and household lighting areas, amid the expectation that LED prices – at both the retail and ex-factory level – will fall further. Meanwhile, e-tailing has become an increasingly important sales channel for lighting products, particularly with regard to medium-priced items.
The above sentiments were widely expressed at the April 2014 Hong Kong International Lighting Fair (Spring Edition). In all, HKTDC Research canvassed 204 buyers and 120 of the exhibitors attending the Fair with regard to market prospects and product trends. On the whole, there was a decided consensus that the demand will remain steady this year.
Lighting market continues to be steady
In total, 89% of the canvassed buyers and 92% of the canvassed exhibitors at the Fair predicted that their sales would either remain unchanged or increase in 2014. When compared with the opinions expressed at the October 2013 iteration of the Fair, it seems that buyers are now slightly more conservative in their outlook, while exhibitors are more optimistic. The overall opinion, however, remained that demand will continue to be steady.
Some 90% of the respondents forecast that their sales would remain unchanged or increase in 2014.
Remark: Figures in brackets were the respondents’ forecast for 2014 obtained from the Lighting Fair held in October 2013.
Source: HKTDC Survey
In line with the October 2013 results, the Chinese mainland and ASEAN were, once again, considered the most promising of the emerging markets over the next two-year period. The two were rated by 73% and 56% of all the respondents, respectively, as “promising” or “very promising” markets. In terms of the traditional markets, 62% and 59% of the respondents rated Western Europe and Australia/Pacific respectively as “promising” or “very promising” markets for the next two-year period.
Proliferation of LED applications
A substantial number of respondents (45%) identified LED and green lighting as the product category with the highest sales growth potential for 2014. This was followed by commercial lighting (21%), household lighting (18%), outdoor lighting (6%) and smart lighting (6%).
With particular regard to LED lighting, many respondents expect that sales will be stimulated by falling prices over the next few years. Notably, 90% of the buyers believe that LED retail prices will fall by as much as 20% in the next 12 months. When asked for a longer-term perspective, 31% of the buyers said they expected retail prices to fall by 21%-40% over the next 1-3 years, while 56% of them maintained that retail prices would fall by 0%-20%.
In additional findings, 92% of the exhibitors polled expected LED ex-factory prices to fall by 0%-20% over the next 12 months, while 6% of exhibitors expected a drop of 21%-40%. These respective views changed to 71% and 21% when asked their views on likely ex-factory prices over the next 1-3 years. This indicates that LED prices are expected to fall further as time goes by.
Both the buyers and exhibitors canvassed expected that LED prices will fall further over the long-term.
Remark: Prices of LED lamps are taken as the reference for indication purposes.
Source: HKTDC Survey
Given the likelihood of falling prices, indoor office and commercial lighting, as well as indoor household lighting, were viewed as the likely best-performing LED application areas. These two applications were each rated by 27% of all respondents as the LED application areas most likely to enjoy the highest sales growth over the next 1-3 years. The next most likely were seen as outdoor lighting (11%), smart lighting system (11%) and indoor industrial lighting (9%).
At the exhibition site, a representative of EFG Co Ltd told HKTDC Research that indoor LED applications had become the “cash cow” for the company, including those related to commercial and industrial lighting requirements. EFG is a Guangzhou-based company, producing a wide range of LED products and solutions. It currently services markets in China, Japan, Korea, Malaysia and the US.
Meanwhile, the Shenzhen Crescent Optoelectronic Co Ltd advised that, as well as commercial applications (such as LED track lights for shopping malls and showrooms) being in demand globally, its sales of household LED items are also on the rise, a development spurred by falling prices. Another business, Hong Kong Hongrun Co indicated that its LED decoration lighting products, such as its LED candles, were enjoying steady demand overseas, notably in the US and European markets. This was despite the keen price competition.
Increasing popularity of e-tailing
In another key development, e-tailing has become an increasingly important sales channel for the lighting industry. More than half (53%) of the respondents indicated that they were currently engaged in e-tailing. Of those not currently utilising this channel, 26% revealed that they plan to start doing so over the next 12 months.
The Chinese mainland – according to 77% of respondents – remains the primary supplier of lighting products sold via e-tailing. Notably, the majority (69%) of the products sourced for e-tailing sales are medium-priced products, with low-priced items accounting for only some 9% of total. This contradicts the perception that consumers typically purchase low-priced goods via online platforms, although “low price” here does not necessarily imply “low quality”.
Profile of respondents
There were 204 buyers canvassed, with 40% based in Hong Kong and the rest based in overseas countries/regions. Their major selling/export markets were Asia (41%), Europe (28%), North America (16%) and Australia/Pacific Islands (5%).
Of the 120 surveyed exhibitors, 20% were based in Hong Kong and the rest based in overseas countries/regions. Their major selling/export markets were Europe (61%), Asia (17%), North America (9%) and Central/South America (6%).
- Electronics & Electrical Appliances
- Household Products
- Lighting Products
- Hong Kong
- Hong Kong