Philips Lighting ramps up R&D spending in China

Philips' booth at a technology and science fair in Beijing. [Photo provided to China Daily]

Philips Lighting Holding BV, a Royal Philips company, will further accelerate its research and development pace in China to compete with other established rivals over the next five years, a top executive said.

As both domestic and global manufacturers including NVC Lighting, Opple Lighting Co Ltd and GE's light-bulb division push their latest LED and smart lighting products into the world's largest lighting market by revenue, the Dutch company is deploying more than 30 percent of its research and development force in China to improve innovation.

Olivia Qiu, chief innovation officer of Philips Lighting, said fast innovation is the key to compete with others as the Chinese market is extremely sensitive to new products, especially those with more functions.

Eager to bolster its market share, Philips Lighting has set a goal of releasing more than 1,000 lighting products in China each year, a certain portion of them specifically designed for the local market. It has also speeded up its research and development on affordable LED products for homes.

Even though China is a big market for Philips Lighting, Chinese manufacturers accounted for 20 percent of global LED production. Chinese firms produced 177.45 billion LED lamps in the first half of 2015, up 37.33 percent year-on-year, according to the Ministry of Industry and Information Technology.

China's fast-growing 4G network would help build a solid application foundation for both consumers and manufacturers. It will also help reduce the research and development period for new products.

"We will collaborate with more local companies across industries such as Xiaomi Corp and Alibaba Group Holding Ltd to create products with more technical functions and cross-industry elements to further diversify our market presence in China," said Qiu.

Philips Lighting will introduce more advanced products, including connected lighting systems and smart lighting products as well as large-scale lighting equipment for the sport, hospitality and industrial sectors.

The company partnered with Xiaomi, a major smartphone maker in China, to launch a connected desk lamp three months ago. The lamp is able to automatically adjust the light, ensuring users get the right light for the task at hand.

Qiu said Chinese companies are no longer assembly shops for their foreign counterparts since they are now capable of producing most of the components on their own and related research and development have reached a high level too.

As China is Philips Lighting's second-largest overseas market after the United States, it has more than 1,000 researchers in China as well as 13 plants and six research and development centers.

Sun Fuquan, a researcher at the Chinese Academy of Science and Technology for Development in Beijing, said China is already the global leader in applying clean-energy and energy-efficient products as well as making big-ticket investments in this sector.

"LED and smart lighting, electric vehicles, wind power and solar energy, which use less power but also illuminate China's green development, will become a key differentiating factor in determining a country's competitiveness," said Sun.