Hong Kong International Lighting Fair 2002 A Beacon of Lighting
2003/04/25 | By
The numbers of both exhibitors and visitors at the lighting show continued the upward trend of earlier years. The lighting fair, which ran from Oct. 11-14, attracted 469 exhibitors, up by 7.8% from 2001's 435, and 22,557 buyers, up 13.8%. Nearly 13,000 buyers came from overseas, a 21% increase from the year before. In addition to Hong Kong's 214 exhibitors, there were 130 participants from the Chinese mainland and 99 from Taiwan.
Greater China Shopping Center The large turnout of exhibitors from the Greater China area reflects in part the complementary relations and cross-border connections among lighting manufacturers in the areas making up the region. The owner of a Hong Kong- registered lighting firm may be a Chinese mainlander or Taiwanese, or a lighting factory in the mainland may be owned by a Hong Kong or Taiwan entrepreneur. Despite these ties, there is plenty of rivalry among these firms, as was amply evident at the lighting show, which offered a kind of one-stop shopping mall for lighting products made in the three areas.
In 2003, the Hong Kong International Lighting Fair will be spun off and be held concurrently with the Hong Kong International Hardware and Home Improvement Fair, from Oct. 27 to 30. The new arrangement will allow more room for the lighting fair to expand and accommodate the growing ranks of expectant exhibitors, according to Benjamin Chau, exhibition director of the Hong Kong Trade Development Council, the main organizer of the fair.
Benefiting from its broader international scope, efficient management, and geographical proximity to mainland China, the Hong Kong International Lighting Fair has gradually outpaced its counterparts in Asia and attracted increasing attention from buyers around the world. "We attend the lighting fair in Hong Kong because we want to reach European buyers and promote our new products," says Paul Lin, special assistant to the chairman of Ever Bright Group, a leading lighting manufacturer in both Taiwan and mainland China.
A Bright Future
Ever Bright started to invest in the production of decorative lamps and other lighting products in the mainland about 13 years ago to access the abundant cheap land and labor there. "The company moved its production lines to the mainland in the early '90s when Taiwan's manufacturing environment was no longer suitable for the development of low-end lighting products," Lin notes. "All of our mainland production is exported to markets around the world. However, in recent years we have felt increasing pressure from the rush of new local mainland competitors."
By learning from the know-how and experience of Taiwan manufacturers, mainland Chinese lighting makers have vastly improved their operations over the last several years, making them major rivals of Taiwan lighting makers in the world market. If Taiwan's lighting-industry players hope to survive this onslaught, Lin says, it will have to tap the mainland market. Often, however, this is easier said than done.
"Market regulations in the mainland are still quite chaotic, and sales channels are hard to establish due to difficulties with trust-building there. There is also the problem of transporting products over the vast distances of that sprawling, infrastructure-segmented market," Lin says. "Nevertheless, Taiwanese manufacturers have no choice but to vie for a share of the mainland market, and the sooner the better," he says.
Ceramic Creations
Attending the fair for the second year running, Mayfair Lighting Industries Inc. gives its seal of approval to the show. "The fair has a broad international reach which enables us to meet many buyers from around the world," says Alex Hsu, sales manager of the company. Ten years ago Mayfair moved all of its production lines from Taiwan to Dongguan, Guangdong Province. In addition to general lighting products, the company began rolling out a series of ceramic track lights in the second half of 2002. Mayfair exports all of its output, mainly to the United States and Europe.
"Currently more than half of Taiwan's lighting manufacturers in mainland China are located in Dongguan, which is near Hong Kong and surface/sea transportation routes," Hsu explains.
Attracting customers with its state-of-the-art designs, Peter Creative Inc. is new to the lighting industry; however, Peter Hsu, president of the company, has been creating ceramic products for more than 25 years.
For years Hsu has cooperated with European clients to turn out ceramic products, which are mostly sold to Europe, the U.S., and Japan. About two years ago, an Italian shareholder in his firm suggested that Hsu produce artistic lamps, launching his company in a new direction. "We produce mainly decorative table lamps made with bone china," Hsu explains. "I never expected that our lamps would become so popular."
To meet rising demand, Peter Creative has a lighting plant in mainland China with about 300 ceramic artisans to design lamps and 50 workers handling assembly. "We cooperate with Italian designers to jointly develop our line-up, adding an average of eight new models each month," Hsu says. "We can develop new molds for a customer for only US$300 with a minimal order of 200 lamps." The company currently ships around US$10-15 million worth of lamps a year.
Made in the Shade
Classic Lighting Co. speaks highly of the Hong Kong lighting show, of which it has been a faithful participant since its inception. "This lighting show is well organized, efficient, and international," notes Joyce Tsai, general manager of the company. "It is especially suited for lighting manufacturers located in Dongguan because buyers can easily visit their plants from Hong Kong."
Classic, a leading lampshade manufacturer, moved its production lines from Taiwan to mainland China in 1992, following in the footsteps of Taiwan lamp manufacturers. "Today more than 90% of Taiwan's lighting manufacturers have moved to the mainland, so many of them prefer to source lampshades there," Tsai says.
In addition, the company also sells its products to clients in Europe, the United States, and Japan.
"Half of our lampshades are sold to lamp makers and half to general customers," Tsai adds. Today the company has two lampshade plants in Guangzhou, Guangdong Province, and a third plant being erected in the same area is expected to begin production in March this year. Shipments are currently some 60 40-ft cargo containers a month. Other than lampshades, the enterprise is now also producing complete lamps.
Tsai believes that the mainland market has strong potential and will prove a major magnet for Taiwan lighting manufacturers in the near future. "The mainland market is quite complicated," Tsai concedes, "but it also has tremendous potential." In order to tap this potential, Classic has established sales outlets in Shanghai and Hangzhou in Zhejiang Province.
Wall Lamps
Halogen wall-lamp supplier Win-Derly Corp. has over the past two years moved almost all of its production to mainland China, leaving only a liaison office in Taiwan. Today the company has two plants in Dongguan with a total workforce of more than 400 persons. "Our Taiwan office is in charge of order-taking, while our plants in the mainland take care of manufacturing," says Melody Huang, the company's manager.
"In order to run the business, I have to fly across the Taiwan Strait at least a couple times a month, and during the busy fourth quarter of last year I spend most of my time in the mainland to inspect products," Huang says. "It is much harder to operate a business in the mainland since we have to compete not only with our Taiwanese counterparts, but also with mainland Chinese manufacturers that have been growing very fast, particularly in recent years."
Win-Derly focuses on the production of high- end wall lamps. It develops its own products, but customer designs are also welcome. The company exports all of its lamps, mainly to Europe.
Energy Saving Lamps
Established in 1983, Energy Research is a Dutch company focusing on the development of energy-saving products. About 15 years ago, Henk Janssen, general manager of the company, found that his design for an energy-saving lamp sold in the Netherlands had been copied from his design by a Taiwan lighting manufacturer. Instead of filing a lawsuit against the copycat, however, he contacted the manufacturer to discuss possible cooperation because of the excellent workmanship of the copied products.
Janssen says that the manufacturing quality of Taiwan's lamps is very good, which is why he decided to cooperate with the island supplier. "I do the design work and our Taiwan partner is in charge of manufacturing. We have been cooperating very well," he says. Today the partnership has two manufacturing plants in mainland China, one in Shanghai and the other in Shenzhen, and maintains an office in Amsterdam with 12 employees handling design and marketing.
"We sell 75% of our products to Europe, 10% to mainland China, and the remaining 15% to other countries," Janssen notes. "Since I am European, I have a good understanding of market trends in Europe. I have attended almost every biennial Light Focus conference staged by the European Lighting Designers' Association (ELDA) and collected information of the latest design trends and market know- how."
"A designer has to be open-minded and quickly respond to new styles and trends," Janssen emphasizes. "From one lamp, a good designer can develop a series of different models. And a family of lamps offers an elegant solution for home decoration."
Over the past five years, Energy Research has grown by 10% a year. Although in the second half of 2002 the company's sales in Europe dropped by 20%-30%, Janssen predicts that the market there will turn upward in 2003. He also expects mainland China to become an important market within two to three years.
Private Enterprise
Golden Sunray (Hong Kong) Ltd., on behalf of Shenyang Golden Sunray Decorative Lighting Co., a mainland Chinese lighting manufacturer, attended the Hong Kong lighting show for the second time. Li Cuili, chairman of the Golden Group, says that Hong Kong is like a window for mainland manufacturers to efficiently reach the outside world. "It was really difficult before for mainland Chinese to engage in private business, particularly international trade, " Li admits. "International trade used to be run by the government or state-owned companies, and any individuals or private-sector firms interested in this area needed to overcome a lot of red tape and meet complex requirements."
Over the past decade, the mainland authorities have gradually relaxed their control on private businesses and opened up the economy. "In the early '90s when the government began allowing more private businesses to be established, I resigned from a state-owned company and established Golden Sunray with my husband in Shenyang, Liaoning Province in 1992," Li states.
"We started with lighting products as they did not require very sophisticated technology. I am in charge of the company's finances and marketing and my husband handles the manufacturing side of the business. We mainly produce commercial decorative lights, including plastic neon lights, twinkle lights, net lights, electronic scanning lights, and fancy lights, which are turned out by our workforce of 700-800 employees in Shenyang," Li adds.
In the beginning, Golden Sunray exported its products exclusively to Southeast Asia. Today, however, its sales have been expanded to South Africa and Europe. "When we started to contact potential buyers in Western countries, we soon found that we lacked effective English- speaking abilities and knowledge of international standards. We have had to upgrade our products and obtain the various safety certifications demanded in the said countries," Li says.
Cross-Border Operations
Cisinger Industrial Ltd. Moved its lighting operations from Taiwan to mainland China more than ten years ago. The company has a plant producing mainly outdoor lamps, with an office in Hong Kong responsible for taking orders. Cisinger is a typical cross-strait operator, with interests and relations with lighting-industry concerns in Taiwan, Hong Kong, and mainland China. "Our boss is Taiwanese, we have an office in Hong Kong, and we have a plant in mainland China," says Tracy Chan, an official at the company's Hong Kong office. Cisinger turns out lighting products in small-volume runs that nevertheless feature a wide variety of patterns, and exports all of its products to Japan.
With a plant of 100,000 square meters, China Ningbo Lexing Inductor Electronic Co. is one of the leading manufacturers of electronic- sensor products in the mainland. In addition to ceiling-mount sensors, wall-mount sensors, and stand-alone sensors, the company has in recent years expanded its product line to include outdoor lamps, infrared doorbells, light-control switches, and smoke alarms.
China Ningbo Lexing is a private company located at Ninghai, near Ningbo Harbor, Zhejiang Province. "It's very difficult to run a private company in the mainland," says Wang Rongqing, managing director of the company. "A person needs a strong will and flexible mindset to handle the ambiguous commercial rules and cope with both cutthroat local competitors and potent foreign rivals."
Mainland China's lighting manufacturers have significantly improved their manufacturing ability over the past number of years, though they still trail their counterparts from Taiwan and Hong Kong in management and R&D skills, Wang says. Currently his company exports 80% of its products. "We tapped the market in Europe first and then the U.S. We turn out a wide variety of high-tech lighting products in small volumes. Most of the models are small-sized and lightweight," Wang says.
BIG Ambitions
Bright International Group (BIG) touted its products with a spacious and eye-catching display at the Hong Kong lighting show this year. "One of the major reasons we attend the show is to enhance our image in the international lighting market," says Cary Chung, marketing manager of BIG. "It's a good opportunity for us to contact our old clients and also meet new customers."
Chung says that the Hong Kong lighting show is growing in popularity due to market opening measures in neighboring mainland China. "Hong Kong's cosmopolitan nature and proximity to the mainland has made it appealing to Western business people. This is one reason that the lighting show has been able to attract so many Western buyers. Some of them, mostly Americans, visit Dongguan further to see the products they are interested in," Chung notes.
Established in 1983 in Taiwan, BIG moved most of its production lines to mainland China in the early '90s. Today it has three lighting plants in Dongguan, and one in Shanghai. In addition, the group has established a seven- floor headquarters in Shanghai and a large exhibition center in Beijing. It now employs more than 2,000 people in the mainland.
BIG exports 80% of its products, mainly to Europe and the U. S. "Most of our clients in the U.S. are importers, for whom we make lighting products on an ODM (original design manufacture) basis. In Europe, most of our customers are retailers," Chung says.
Although the threat from mainland China is growing, Taiwanese lighting manufacturers have so far still outpaced their rivals to the west in terms of experience, diligence, and industrial know-how. "Lighting products made by Taiwanese manufacturers are more popular in overseas markets than those produced by Hong Kong and mainland Chinese suppliers," Chung remarks.
From 1995 to 2000, BIG enjoyed an annual growth rate of around 10%. Its business expansion slowed slightly in 2001, but recovered to previous levels in 2002. Eyeing the rosy prospects of the mainland market, BIG has established sales offices there and has contracted some 40 local lighting stores to carry its products. BIG is determined to make further inroads into the mainland market in the near future.