Wall lamps have traditionally been treated as the supporting actors in an industry dominated by other more lucrative lighting products. Yet despite their limited market share--about 10% to 20% of the total lighting market--they play an irreplaceable role as auxiliary and decorative lighting. Consequently, most lamp makers also offer wall lamps along with their other major products, such as floor, table, or pendent lights.

Given their secondary position in the market, wall lamps have been one of the most neglected areas in the industry in terms of investment, innovation, and quality control. Most lamp makers in Taiwan are content to simply modify other types of lamp for wall use, or to adapt popular designs already available on the market. This has led to thin margins and constant pressure from lower-cost copycats in mainland China.

However, some wall-lamp makers in Taiwan are trying to break this cycle with new ways of thinking. Their strategies involve small-scale production in order to give more focus to quality, and heavy doses of investment in either R&D or manufacturing in order to support the development of high-end products. In addition, they concentrate their efforts on exports to industrially advanced nations.

Another shared trait among this new breed of wall-lamp makers is their almost universal decision to keep their operations in Taiwan in order to benefit from the well-developed parts-supply chains on the island. The exceptions have been those companies specializing in Tiffany lamps--a labor-intensive product that is far less costly to make in cheap-labor areas like mainland China.

After years of effort, these producers are beginning to see the fruits of their efforts as their product quality rises, opening lucrative new markets overseas.

Making it Better

Pleo Inc. is one of the firms that has taken this new road. Established in 1982 as a maker of commercial wall, floor and pendent lights, the company has developed a niche in higher-end markets by constantly upgrading its manufacturing techniques, while leaving the effort and cost of product design to its overseas buyers.

Pleo claims that it can make any kind of lamp, using a wide variety of materials and employing different manufacturing methods.

Indeed, manufacturing is where Pleo pulls ahead of the pack. By leaving design and electrical/lighting source integration up to others, the company has been able to focus on maintaining a high level of quality control and developing high-precision manufacturing techniques. These assets, plus its small-batch production mode and superior corporate management, have helped Pleo tap high-end markets in the U.S. and Europe.

Success in international markets has shown Pleo that the returns on upgrading manufacturing capability far outstrip the benefits of constantly developing new items. Thanks to its outstanding manufacturing ability, Pleo has been able to position its products at the level for high-end indoor commercial applications, keeping margins high. In all of its major markets the company provides a three-year parts-change guarantee without qualifications, something few other Taiwanese lamp companies can do.

Specialization has also helped the company achieve the level of quality needed to provide such generous guarantees. The company specializes in making lamp bodies, leaving electrical/lighting-source integration and safety certification to its customers. This frees Pleo to hone its edge in getting new lamp models to market and also allows buyers to customize the company's lamps to better suit their target markets.

Pleo says that fewer than five other companies have adopted this type of operation mode in Taiwan, but all enjoy strong operations.

Tiffany on the Rise

Like Pleo, Tiffany lamp producer Tilit Enterprise Co., Ltd. Has bet its future on high-quality wall lamps rather than trying to compete on price alone. The strategy has helped the company double its sales of wall lamps to account for about 10% of its total revenue, according to company president Ti Ken-shiu, and he expects the figure to reach 15% soon.

According to Ti, one of the benefits of making Tiffany wall lamps is that they have a relatively simple structure and require fewer materials than other types of Tiffany lamp, thus making them cheaper to produce.

"It is an era of new opportunities and fierce competition for Tiffany lamp makers," Ti claims. "As global demand for low-end lamps shrinks, especially in the U.S., the demand for higher-end and more decorative products expands. So the time is ripe for us to move into the growing high-end market."

Ti says that the U.S. market accounts for about 80% of the global demand for Tiffany lamp products, which he says is growing. Part of the rising appeal of Tiffany lamps, he adds, is their falling price as producers learn to make simpler and more cost-effective models.

Ti predicts that Tiffany products will account for about 20% to 30% of the global wall-lamp market in the coming few years. However, he admits that this may be the maximum share Tiffany achieves, as the market is generally limited to middle-aged buyers with medium-to-high incomes.

In the past few years, Tilit has succeeded in selling its lower-cost Tiffany wall lamps through hypermarket chains in the U.S. In the past, Tiffany lamps have been sold almost exclusively through lighting stores as part of lamp sets. But by going through big general-purpose retailers, Tilit has been able to tap into the mass market. Currently, such large volume sales account for about 30% of the company's revenue. Its expansion in the hypermarket channel has been smoothed by the company's ISO9000:2000 certification.

Tilit has also opened up new markets by rolling out lamps made of poly-resin, which greatly cuts costs and frees designers to try new ideas. The cost savings come both from the lower cost of the material itself as well the less-expensive molds needed to form poly-resin parts. For designers, poly-resin is superior to older materials since it enables them to use more brilliant surface coatings and allows for a greater range of shapes.

Though interest in poly-resin lamps is rising, Ti says, a big portion of his company's Tiffany buyers are still interested in traditional and antique-style metal-frame models. Currently, about 75% of Tilit's lamp sales are metal-frame models, 25% poly-resin versions. Ti expects the ratio to change to 50/50 over the coming few years.

Another new niche, Ti says, is that more and more poly-resin accessories for Tiffany lamps are being developed to enrich the appearances of such lamps. These new accessories, though low in price because the material used is not expensive, can effectively upgrade the artistic feeling of such lamps and provide wide room for expression on the part of designers.

Tilit moved its lamp production to mainland China's Guangdong province several years ago. The company now employs about 400 workers there, about 10% of which are in charge of mold and die development.

Tilit exports all of its output, with 75% of the total going to the U.S., 15% to Europe, and 10% to Japan and the Middle East. About 70% of its products are sold through lighting stores and the remainder at home centers.

European Style

Another success story in Taiwan's wall lamp industry is Ziga Co., Ltd., a seven-year-old company co-founded by several experienced professionals in lighting industry and specializing in European style lamps

Ziga says that its focus on European style lamps has helped it win orders in the high-end commercial lighting market in both Taiwan and abroad. Such lamps emphasize simplicity, warmth, elegance, and refinement, giving them a decorative as well as illumination role, the company says.

Ziga has also worked intently to keep its products on the cutting edge of global lighting fashion trends. Through close cooperation with its overseas customers, the company develops an average of 20 to 30 new lamp models each year, about 67% to 70% of which are wall lamps.

In order to concentrate its efforts on design, Ziga contracts production work to long-term partners in Taiwan and has set up parts procurement offices on both sides of the Taiwan Strait. The company claims that its core competitiveness lies mainly in its focus on supplying a large selection of high margin niche products and its flexible development capability.

About half of Ziga's products are exported to up-market lighting stores in the U.S. and Europe while the rest are sold locally to interior designers.