According to Philips Lighting, lighting sector in India is an open market and everybody with their expanded offerings is free to participate, with consumers being the ultimate judge in deciding where to buy from. Philips Lighting’s leadership in LEDs is getting concrete and looks unabated as the global lighting giant targets to cater to every segment of the market with its unique and innovative myriad range of products and system offerings. Under its futuristic strategy, the company aims to usher in an era of smart connected lighting, while also focusing on eradicating light poverty across the world. Philips Lighting – an undisputed market leader in India – is manufacturing products that resonate with evolving consumer needs.
In the lookout for further details, LED World met Harshavardhan Chitale, Vice Chairman & Managing Director, Philips Lighting India, who in an hour-long exclusive chat with us, shares how the company perceives the country’s current state of lighting and what all it has in store to illuminate the future. Prior to joining Philips Lighting, Chitale served as MD & CEO of HCL Infosystems and led multiple set of businesses including IT Products, solutions & services and distribution of IT/telecom and consumer electronics products. He has also held senior positions at Tata Honeywell and Honeywell Automation in the past. Edited excerpts of the chat are here to follow:
How has Philips Lighting strategized its growth in India?
We have three broad focus areas in India. The first area is growth in lighting products; where the penetration of LEDs is growing irrespective of application -consumers, retailers, hospitality, offices, municipal corporations, stadiums, etc. We have suitable offerings in our LED portfolio for each segment. Furthermore, leading in LED – technologically and commercially – is one of the pillars of our strategy where we will continue to innovate and keep coming up with new products to cater to the varied needs of lighting consumers – be it a rural villager who wants low cost lighting just for one room or an affluent Indian who wants a modern smart connected LED lighting system for his home.
Second one is to enhance the value proposition in lighting and offer connected/smart lighting for every segment – homes, monuments, offices, stadiums, streets, etc. Smart connected lighting multiplies the benefits offered by LED’s by taking them beyond energy-efficiency and includes reliability, safety, human productivity, better health, etc., all of these attributes are now better demonstrable owing to the advancements taking place in the modulation and measurement of modern lighting systems.
The third area of focus for us is the underprivileged segments of the society who don’t have access to reliable and affordable lighting solutions. We want to make sure that we make quality lights available to them. This is part of our overall belief that access to light is access to development and these people must not get deprived of development benefits. And hence, as a company we are wedded to one major goal of eradicating light poverty not only from India but also across the world by making lights available to all those who don’t have access to reliable lighting.
Which all categories of underprivileged are you going to address while on the way to the objective of eradicating light poverty?
There are two categories of light poverty. The first category is where consumers have access to electricity but they need good affordable light sources. For this segment of the underprivileged, we will continue to manufacture and supply affordable and high quality incandescent bulbs. Being a market leader, we don’t want to impose our LED-based lighting solutions on this section of economically deprived people, where even a seemingly small sum of 10 rupees for an incandescent bulb matters. Therefore, we will continue to innovate to make high-quality conventional lights especially for those who are not finding LEDs affordable yet. We know that one day they will, and so we are working towards it. Till that happens, we will continue with what we can and enable them to make their lives brighter through access to lighting which opens up more opportunities for development.
The second category encompasses those who don’t even have access to electricity. Unfortunately, a big chunk of the population in India, comprising nearly 25 crore people, falls under this category. For this category, we are offering Solar LED lighting solutions that are affordable to them, especially for their schools, farms, village streets, houses, etc. For instance, as a part of the Lohiya Awas affordable housing program of UP, Philips Lighting along with its partners has powered more than 45,000 rural homes with Solar LED lighting. Each house is powered with 3 LED tubes of 3W and 5W. The light distribution is sufficient to carry out daily activities of cooking, reading, etc. UP-NEDA (Non-Conventional Energy Development Agency) is now extending this program to cover more than 1,00,000 homes. Similar programs have also been implemented in Manipur and Tamil Nadu. We do CSR for the same cause but the scale of the Government program is much larger.
How is urbanisation helping Philips Lighting India grow?
Urbanisation plays a major role in our growth story, as it expands the panorama of lighting needs in a city, for the planned tunnels, stadiums, parks, illumination in streets, etc. Ideally in any city, lighting contributes to almost 20 to 30% of electricity consumption. As urbanisation increases, it will escalate the demand for lighting and consequently increase electricity consumption. Through our smart LED lighting solutions, we strive to reduce the electric load and help manage the rapidly increasing demand for lighting.
Notably, lighting is not just about energy-saving and illumination, but also it helps improve the quality of life by making the city safer, more liveable, productive and tourist-friendly simply by lighting up monuments like we have done for several Indian monuments like Gateway of India, Victoria Memorial, etc.
How has Philips Lighting India’s association been with EESL?
From the very beginning of the DELP, we have been participating in the scheme along with all major lighting players. But its share in our business is much lesser than our overall share in the consumer market. Yes, we have been winning some share of EESL’s requirements but that’s a part of the on-going Ledification wave in the country. In India, today the LED lighting market stands at around Rs. 8,000 crore that includes all the types of lighting like LED bulbs, tube lights, down lights, battens, stadium lights, consumer lights, retail lights, etc., while EESL pushed only for a small portion of the total requirements. However, we must acknowledge the contribution of EESL which helped in bringing down the cost for the industry besides localising the LED lighting by making it available to the large critical mass which was deprived of good lighting. The project is still under way as India is a huge country and a large part of the geography is yet to be illuminated.
How has been the company’s growth trajectory amidst the call for countrywide Ledification?
We have been registering double digit growth since the LED wave has started in India. As I mentioned, we are the number one lighting company in the world as well as in India. Almost 2/3rd of our lighting business comes from LED lighting. No doubt that it’s been a very big opportunity through which we have been able to ride through. We are getting our businesses from all the segments – Consumer, professional and public lighting. Our B2B business is as big as our B2C business indicating that our LED lighting sales to offices, cities, street lights, industries, etc., is as big as LED sales to home. Whatever goes to retail is for the consumer market, which is about half of the total lighting market while the other half is sold through our value-added partners who are in to projects.
How has been Philips Lighting’s manufacturing infrastructure and distribution network in India especially for LEDs?
We have a strong manufacturing footprint in India which includes both direct and indirect units spread across India. Philips Lighting manufacturing facilities in Mohali and Vadodara are amongst the largest Philips Lighting facilities in the world and are the cornerstone of our local for local strategy, in addition to exporting products to 24 countries across the globe. These two sites are complemented by our strong network of 41 contract manufacturers whom we have supported and built in the country.
Philips Lighting has also established large global R&D units – Philips Lighting Innovation Centre (PLIC) in Noida (NCR) and Philips Innovation campus (PIC) in Bangalore to work on emerging LED and Solar lighting technologies not just for India but also for global markets. As a result, we design and manufacture in India more than 90% of what we sell in India.
We have an extensive distribution/channel partner network in India, with close to 1,200 channel partners and 8,500 Bandhan (Priority) outlets spanning almost every Taluk in the country. As a result, our lights today are available in close to 1,50,000 retail shops including rural and urban, and more than 170 exclusive Philips Light Lounges across India. We have recently set up separate Philips Lighting entities in Sri Lanka and Bangladesh, which are very fast growing markets for both LED and connected lighting systems.
What do you envision as the future of lighting?
Connected lighting is the next big thing in lighting. Every technology comes across a point of inflection, which happens to be the right time for it. LED has been in talk for many years till that inflection came. LED was used for general lighting purposes for the first time in 1994. However, they did not become popular due to certain limitations at that time. Then there came the inflection following some technology development, cost reduction, and above all, the acceptance all three put together constitute consumers’ side. And when these three come together, we can clearly observe what can happen. We envisage that the same thing would ensue in connected lighting.
This is similar to what had happened to cell phones. Just a decade back, everybody had just a feature phone. But there came the inflection point when data charges became low, smart phones became cheaper, network connectivity improved significantly, app-ecosystem entered, etc., which together put the growth of smart phones almost onto a steep trajectory.
When it comes to LED, it is about energy-efficiency; while connected lighting is a concept that encompasses a gamut of benefits bringing a lot of other areas under its purview. For instance, it would offer better environment for children to study, induce better healing of a patient, enhance productivity, makes the city safer, reduces the real estate cost, etc., all these come bundled with the smart connected lighting towards which we are striding forward. As more and more value propositions emerge with connected lighting and people start using it and experiencing the attached benefits, smart connected lighting would become default just like smart phones.
Is connected lighting affordable?
It is a wrong notion that LED will be promoted only if it becomes cheap. Mobile phones didn’t reach out to 100 crore of Indians because they were priced low, rather they became costlier but with added advantages like camera, music system, GPS, a computer, etc. So the learning is that Indian consumers don’t buy something because it becomes cheap, they buy products that deliver value. LED has numerous components that includes controls, software, optics and the domain knowledge, and all of these have become important for today’s lighting requirements.
Any specific application that Philips Lighting has recently introduced in its bouquet of connected lighting?
Our research has indicated that correct lighting has a significant impact on healing of patients and helps them recover faster in hospitals. Therefore, we have come with a solution called HealWell. Lighting is now used in hospitals as a tool to help the patient heal better and faster. It is based on a research that highlights how the human body heals in natural light and how this lighting environment can be recreated in the nursing room.
We have also developed lighting solutions for indoor horticulture where a lighting recipe has been prepared to help grow vegetables better. This is possible because LED brings us many advantages such as controlling intensity, colour, duration, modulation, etc. LED has in fact allowed us to control lighting in the way we want to use it, with various different applications.