In recent years, with the development of LED industry becoming more and more mature, general lighting market has gradually become saturated, and major lighting brands have launched fierce competition in order to seize market share. Channel layout has become a key part of the competition for lighting companies. It is also an important way for lighting enterprises to improve product coverage, market share and market competitiveness.
EVERLIGHT, as the benchmark for Taiwan’s LED packaging companies, knows the importance of channel distribution for lighting companies. In order to expand lighting sales channels and make up for the lack of European channels, EVERLIGHT acquired German lighting company WOFI in 2013. From then on, WOFI officially became a subsidiary of EVERLIGHT.
After the integration, how is WOFI developing now? How does the company lay out sales channels in Europe? How is the overall lighting market performance in Europe this year? With these questions, LEDinside interviewed Li-Yu Huang, General Manager of WOFI, and asked him to share some of the current trends of WOFI and the overall situation of European lighting market.
♦ WOFI’s General Manager Li-Yu Huang
Based in Europe, WOFI has dedicated to high-end residential lighting
Huang said that WOFI was founded in 1959 and has a long history. The brand has been around for 60 years so far, and in Germany and other parts of Europe, consumers are familiar to the WOFI brand.
In terms of product, at present, WOFI’s main product type is residential lighting, including desk lamp, chandelier, floor lamp and ceiling lamp. The product positioning is high-end. Due to the strong demand for outdoor garden light and kitchen light, WOFI is also planning to increase these applications.
In terms of marketing channel, WOFI’s main market is Europe, with 70% of its revenue in the German-speaking region. Currently, the market share of WOFI in the German residential lighting field is about 8%, which is in the forefront. In 2017, WOFI’s revenue was EUR 60 million, and its gross margin was approximately 60%.
In terms of R&D and product technology, WOFI has a strong design and development team, and its designer team is mainly in Europe. The company has also invested considerable cost in R&D and innovation, with fast product updating. At the same time, WOFI has the DNA of “Made in Germany”. Although it is currently cooperating with Chinese manufacturers in the production process, it is strictly controlled from development to design and manufacture. The product quality is excellent, and the technological level can be effectively guaranteed.
♦ WOFI’s chandelier and floor lamp
Year-end demand of the European lighting market bounces back, and lamp preferences return to the traditional type
Talking about the status of European lighting market this year, Huang said that the performance of the overall European lighting market is relatively flat. Due to Europe’s high latitude, summer is the low season; while the daytime of autumn and winter is short and the required lighting time is correspondingly longer, so the demand for lamps increases and they are the high season of lighting industry. The operating revenue gap between the low and high season is quite obvious, with the proportion of about 4:6.
Yet, this year’s climate is surprisingly good, even hitting the high temperature record of Europe at the same time in the past 100 years. The daytime is significantly longer than in previous years. Therefore, the overall lighting demand is not very good at present, but it has gradually improved since entering Q4.
At the same time, he pointed out that some of the relevantly obvious market trends can be observed in the European lighting market. First, the market has returned to the traditional type and taken the retro route. The development of LED filament lamp with traditional lamp design has been rapid. Secondly, indirect lighting has become more and more popular. In addition, the development of e-commerce has been fast, growing at a rate of 20%-30% per year in Europe. The sales of traditional channels such as furniture stores declined.
Diversified channels are developed, and WOFI plans to develop the Chinese market with high-quality products
Undoubtedly, channel is critical for lighting companies. How to establish a huge sales network and smooth channel layout has become a “threshold” for lighting companies to expand their markets. For different companies, different products and different stages of development, the channel modes are not the same LED high bay factory.
Huang said that the main sales channel of WOFI is “medium- and high-end furniture stores + e-commerce”. Because WOFI’s main product is indoor residential lighting, medium- and high-end furniture stores are an inevitable choice for WOFI’s sales channel. In addition, it can be observed that more and more consumers in Europe prefer to buy lamps in DIY stores such as B&Q. The products in this type of shops are cheaper and more diverse in style. Therefore, the company plans to strengthen the layout of DIY store channels such as the promotion of younger sub-brands in order to improve the popularity of products in various markets.
At the same time, WOFI has also established an outlet in Germany and plans to open three more next year. The products in outlet with high price–performance ratio are popular with consumers. Besides, with the increasing popularity of Internet and the change of consumers’ shopping habits, e-commerce has become a trend. Therefore, WOFI has set up online store for sales of lamps on Amazon.
In addition, through brand and design advantages, WOFI also plans to introduce high-quality lamps and lighting fixtures in the Chinese market from 2019 to provide consumers with high-quality lighting products and lighting decorating services with advanced design concepts to enhance the residential lighting environment and quality of life.
LEDinside believes that in the future, as competition in the lighting industry continues to intensify, channels will be more diversified. Therefore, lighting companies must keep pace with the times to carry out multi-channel operations. WOFI has deeply cultivated the European lighting market and plans to develop the Chinese market with products with high quality and advanced design concept. This development strategy is highly suitable for the current lighting market demand, and its future development is promising.