The Indian LED lighting market is evolving at a fast pace. This change is being steered by an increasing number of Indian manufacturers foraying into the LED space. In an interaction with Baishakhi Dutta of Electronics Bazaar, Mahesh Bellad, director, Online Instruments (Orange LED Plus), talks of how the company is aiming to increase its share in the Indian lighting market.
EB: What are the major business challenges in the Indian LED industry?
The LED lighting industry has evolved over the past decade and continues to grow rapidly only because of the many advantages of LEDs compared to the older technology. While the demand for a smart and connected lifestyle is the driving force behind the LED lighting industry, the industry faces numerous challenges. Chinese players offer intense competition, as their products are available at cheaper price points though they are not of substantial quality. And the market is mainly driven by price, with the end customer being unable to distinguish between high and low quality products.
Also, the absence of technical guidance and product standardisation is resulting in low quality products flooding the market. With so many LED brands emerging over the past few years, there is an unhealthy price competition which has unfortunately encouraged brands to compromise on quality, resulting in higher occurrences of product failure. Lastly, the inability to make LED chips and microchips in India has resulted in excessive imports and a high cost of production. Overall, the local manufacturers are facing major challenges.
EB: How much does your LED product portfolio contribute to your overall turnover?
Our LED product portfolio contributes about 10 per cent to our overall business. But this is gradually increasing. Standalone LED turnover has been growing year on year. In the last two years, we have seen a growth of over 20 per cent in this turnover.
EB: What growth do you foresee in the LED lighting segment over the next three years and what are the plans you have for your LED brand, Orange Plus?
We foresee tremendous growth in the global lighting segment. Declining LED prices coupled with favourable government initiatives will drive the Indian LED lighting market until 2020. On the other hand, rising consumer awareness about the cost-effectiveness and eco-friendliness of LED lights will continue to drive sales from the residential as well as commercial sectors.
To penetrate this growing market, Orange Plus has developed several innovative lighting solutions based on consumer insights. We have a dedicated team of researchers and our key focus is on technology, R&D and the supply chain dynamics. We aim to build LED lighting solutions that are a class apart and technologically superior. Orange is a strong advocate of the government’s Make in India initiative and has invested significant resources to build these solutions. The future of the LED market is very exciting for lighting players who possess the right kind of technologies. Talking about Orange Plus LEDs, we should be able to reach a turnover of ₹ 1.5 billion by 2020.
EB: What are your strategies to increase your market share in the coming years?
We plan to expand our Experience Zones not just in Bengaluru, but at a pan-India level. These will offer customers ecologically-advanced LED lighting solutions. We also plan to introduce an interesting range of 23 new models in this fiscal year, apart from our tailor-made solutions. Our new product line-up in residential LED lighting comprises large and compact LED ceiling lights.
To increase our presence in the market we have also been scaling up our distribution channels. We continue to expand the breadth and depth of our network team to build an omni-channel presence with the help of dealers. So our major focus is on technology and on strengthening the channels in cities and towns to address the untapped market for growth. For Orange Plus to achieve its goals, we strongly believe that tapping into Tier-II and Tier-III cities is crucial.
EB: How are the small and medium players across the country adapting to the newer lighting technologies, given the cost-sensitive nature of the market?
It is well known that the SMEs are driving the LED manufacturing segment and currently dominate manufacturing market share. In order to sustain themselves over the long term in this cost-sensitive market, innovation is key. In spite of the cost-sensitive nature of the market, SMEs strive to be known for performance and quality.
EB: What further technological innovation awaits us in lighting?
The LED lighting industry is constantly evolving and a lot of innovation is yet to happen. LEDs have become mainstream today, although this has taken time. Energy and cost savings continue to be the primary force behind innovation in the lighting industry.
Both institutional and government entities are challenging the industry with solutions that will both reduce energy and maintenance costs. Technologies such as Li-Fi are basically like Wi-Fi, which is based on visible light communication. The industry is also becoming more conscious about the impact of lighting on humans. Products that enhance human performance and comfort will soon be the order of the day.