Yiguang Technology

Entrepreneurs in the LED industry know that the LED home market is an important market for future profitability, but they have yet to conquer the field of home lighting for multiple reasons.

First of all, at present, the target market of LED enterprises is mainly concentrated in government procurement, hotels and other specialized markets, with high profits, but after all, the number is limited, and the market is in a situation of more monks than porridge.

Secondly, currently there are not many domestic LED companies entering the civilian market, mainly focusing on outdoor lighting and commercial lighting. Compared to LED home lighting, these fields are more easily profitable for LED companies in terms of price acceptance.

LED lights are not selling well because there is a significant price difference between LED lights and energy-saving and incandescent bulbs. For example, a 3W LED light costs 20 yuan, a 7W one costs 90 yuan, while an energy-saving light costs only about 10 yuan, and an incandescent light costs only 1 yuan. In the household field, LED lights currently have a good reputation but no market.

The National Development and Reform Commission has officially issued a document stating that "China will basically eliminate incandescent lamps in 5 years". According to industry insiders' estimates, the market size formed after phasing out incandescent bulbs will reach several hundred billion yuan. As the best alternative, the LED lighting industry is expected to double within five years.

The outdoor lighting such as street lights and advertising lights operated by LED companies are all order based products, and customers generally have personalized needs. Even in the same city, the brightness, color rendering, and appearance of street lights on two roads are not exactly the same.

So, how can we enter the vast market of household lighting? Firstly, it is important to understand that one of the major reasons why LED home lighting has not yet been overcome is the issue of expensive lighting fixtures. The main reason for the high price of LED is the high cost of chips, which account for at least one-third of the cost of LED lights. However, two years ago, the price of a 1W LED chip was around $3, but now it has dropped to below $1. With the decrease in chip prices, the problem of high LED prices is expected to be resolved within the next five years.

Only by reducing costs can we gain an advantage in the market. So, what can we rely on to reduce costs? Experts have pointed out that if one does research and development on their own, it does require significant investment, which small businesses cannot afford. In order to reduce costs and at the same time make the product have high technological content, it is possible to choose to cooperate with scientific research institutions. (Editor: LEDxume）