By Liu Baijia (China Daily)
Updated: 2007-08-02 14:31

Tommy Leong, vice-president and general manager for Philips Lighting China, said his company's light bulb sales in the market declined by 20 percent, but those of CFLs rose by 40 percent. About 80 percent of Philips lighting products sold in China are also energy-efficient.

Philips now has nine lighting factories in China and supplies 80 percent of the CFLs to its global customers.

CNLight, a domestic lighting solution provider, saw its 2006 revenues increase by 37 percent to 269 million yuan, while profits grew by 40 percent year-on-year to 43.83 million yuan.

Chai Guosheng, chairman and general manager of the Nanhai, Guangdong Province-based company, attributed the growth to automobile lights and energy efficient products.

"When I set the aim to make the best energy-saving lights in China, in 1992 at the beginning of CNLight, many people thought I was crazy," Chai said. "But just because of the pursuit of this dream made CNLight successful."

With more than a decade of education and promotions, energy lighting has become an ordinary concept for families in large cities like Beijing and Shanghai and the penetration rate is as high as 70 percent, from 47 percent in 1995, according to CIES's Wang.

The focus has turned to smaller cities and rural regions, as well as some commercial uses.

Philips' Leong said the initial cost is still a barrier, because people are more concerned with the initial investment instead of the total cost of ownership.

A light bulb sells at about 1 yuan, but a quality energy-saving product is six times as expensive, which is especially a big factor for people and organizations in smaller cities and rural regions.

One approach Philips has taken is to rely on local development in its lighting research center in China.

Several years ago, the company developed a low-cost CFL product in China. Its price is about one-third of the previous mainstream product with a long life and good lighting effect. The product immediately won recognition from users and now a bulk of the Dutch firm's CFL exports are using that technology.

Leong said there are similar products in the pipeline, which combines cost and quality.

At the same time, it will spend a lot of resources in tier 2 markets. Traditionally, Philips is only strong in four metropolitan cities and 30 tier 1 one cities, but this year, Leong said his company will establish presence in 100 tier 2 cities, where the population is between 500,000 and 2 million.

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