Foshan Luxmate Optoelectronics Co. Ltd. is one of the leading lighting solution companies in China by combining the R&D facilities capable of producing and selling various kinds of lighting solutions including the latest LED series products. Spread over 10,000 square meters of the area, the facility is fully equipped with the most modern production lines and testing facilities.
The ISO:9001 company carries CE certifications, EMC certifications, domestic quality certification of CCC and energy class standard authentication and supplies its products across the world with the help of its well-established worldwide marketing network and a strong sales team. Owing to the strong infrastructure, followed by excellent quality, reliable performance and reasonable price, the company has won the trust of its customers worldwide.
The company has been in India for over a decade serving as the OEM for quite a few renowned brands. But due to recent changes in the country’s trade panorama, the company is seriously exploring ways to enhance its presence with its own brand. It is now looking for dealers and distributors besides continuing as the OEM. To promote the cause, the company’s General Manager Natty Tan keeps visiting India every now and then. Recently, Tan was here to participate in LED Expo, Mumbai, on the sideline of which, LED World got hold with him to know his market strategy and future plans. Excerpts follow:
How has your experience been in India so far?
For the last 12 years, we worked as the OEM for quite a few Indian companies including Anchor, Surya, Havells, etc. but that was for some special products only as most of them have far more bigger capacities to cater, owing to the escalating demand. However, the past couple of years didn’t go that well for them and their business volumes have slipped considerably. We also had to put a lot of efforts to get the business-visa issued as the rules have become more stringent. In the meantime, while we look for immediate payment for our consignments, clients here ask for at least 90 days of credit. Amidst all this, we are trying to build relationships with companies like Syska and Surya for some products that we specialise in.
You mentioned stringent rules creating bottlenecks in your way. Can you please specify?
Custom issues and the changing procurement policy of the government of India has by far made it tough for manufacturers like us to continue as OEMs. Also, BIS certification has been made mandatory for any product to be marketed in India. This stands same for all irrespective of them being Indian or foreign-origin. The government norm says that no electrical or lighting product can be sold in the country without BIS certification; it is a must for each single brand and for each product the brand is associated with. In short, the focus of the government is to push ‘Make in India’ than encouraging imports, which eventually has made the process of supplying to the Indian customers as an overseas OEM, tougher.
With BIS certification becoming mandatory, what would be your strategy to do away with the odds?
It’s a costly affair but to survive and continue in India, we have got all our items BIS-certified, for which we have paid a hefty, almost two million rupees as the certification fee. The concern is that the one sourcing products from OEM has to get all these products re-certified from BIS following the same process, which has really made the whole process of sourcing not only troublesome, but also expensive too. No doubt that this will restrict overseas OEM practices, and will push the domestic manufacturing up. But in the process, it’s inviting undue infringement else the manufacturers can’t even dream of making profit or saving from the business.
What steps(s) according to you should the government take to rein in the infringement?
The government should introduce policies that can help make production process easy. For instance, quite a few manufacturers source the LED chips and drivers from outside. The government can issue a minimum performance standard criterion for these components i.e. raw materials, drivers and chips, which eventually will make final products at par. Even if, the government is taking so much pain, it won’t be able to control the lumen consistency because once installed it really becomes tough to measure the same over a certain period of time.
What’s the way out? What other options are you looking at?
By virtue of our elongated 13-year stay in India, we understand the local business culture as well as the company structure in India. We have already set up an entity here. We want to meet top level management of Indian lighting companies to explore diversified information. We actually want to gather information on the current trends, market style, pricing and some other info. India is a huge country where tastes and preferences keep changing at every 50 kms radius. Also for different states, the market situation is different and the need is to develop region-specific products. Since we want to expand our presence with our own brand Luxmate, which is a one-year-old kid now, we are eagerly exploring about varied distribution systems, market positioning and strength of different brands, local/regional requirements, market segments, etc.
How do you see the growth prospects for manufacturers like you in India?
India is vital and we have to be sustainable to feed the escalating demand at least for the near future keeping in view the requirements, which may after a certain period, go down because of the extended life guaranteed by these new generation LED bulbs. Meanwhile, the government is also pushing for the replacement of the GLS and CFLs, following which; manufacturers here are continuously enhancing their production capacities. If so continues, the overall production may experience a halt for sometime as the markets would eventually get oversupplied. Nonetheless, other markets in the Asian region are in the making to which the giant manufacturers can make their route.
What changes do you anticipate in the nature of lighting products in time to come?
We need these bulbs as of now as there are consumers for the same. But no one can define the future on the basis of today’s need. With the passage of time, people may get a change in their preferences and tastes, and hence, can switch over to panel light, T5, or some other types of lighting solutions thus eliminating the use of B22 and E27. You know, for instance, 4 billion pieces of LED bulbs with over 3 years of life expectancy are supplied from China every year replacing 7.2 billion pieces of CFLs recorded during 2007-08, which had a life of just 1-1.5 years i.e. half of what LEDs come with. In similar fashion, Indian government is also heading to bulk production of more than 750 million every year. That means life of the bulb has also increased and slowly but steadily the bulb market is contracting.
How do you see the pace of development at the global lighting space?
The world is one circle starting from Europe, US, China, India, Pakistan, Bangladesh, Thailand, Africa, Nepal…and so on. The life of the circle is becoming shorter with the pace at which technological development is taking place. May be, it took 50 years for China to grow like Korea, it would take only 20 years for India to reach that level. If you see, the world’s industry has become like Japanese industries. At one time they were at the top of the list with their renowned global brands Sony, Panasonic, etc. Now they all are bankrupt, because they don’t want to play as most of the components manufacturing have been shifted to Germany, which is indirectly controlling the whole market.