In recent years, the LED lighting market has flourished in emerging countries, with traditional international brands occupying positions in mature markets such as Europe, America, and Japan; In highly competitive countries such as China, where money is visible but not profitable, developing emerging markets has become an important step for manufacturers to formulate expansion strategies.
Russia has a total area of 17 million square kilometers, making it the largest country in the world; The population is 143 million, ranking ninth in the world; GDP ranks eighth in the world. It seems to be a huge market for lighting products. According to LEDinside analyst Chu Yuchao's estimation, the overall market share of the Russian lighting market in 2014 was close to 7.8 billion US dollars, and LED product applications were not inferior to the most advanced countries in the world, with a high market penetration rate of 32%, and it is estimated that it will reach a market penetration rate of 44% in 2016. Regardless of the overall growth rate of lighting and the penetration rate of LED, Russia is the most promising region in the niche market.
In addition, the Russian market is different from other emerging market countries. In terms of market dispersion, Russia has shown good performance. According to LEDinside's actual visits and verification, over 60% of outdoor lighting fixtures in Russia are controlled by specific manufacturers. Compared to other emerging markets, such as Southeast Asia, in addition to international brands such as Philips and Panasonic, the largest local brands also have a market share of up to 30% for specific field applications. The unique market characteristics of Russia require analysts to flexibly apply more models and add more variables when observing this market, in order to obtain objective and highly reliable market information.
According to the observation of LEDinisde analysts, there are many key elements in the entire Russian LED lighting market. Here, three most representative projects are proposed:
I. The industrial chain is highly dependent on imports
99% of the supply chain of LED lighting products, whether it is LED packaging, power drivers, or heat dissipation modules, is imported from abroad, and more than 50% of the entire lighting part also comes from other countries. In such a huge market demand, but without a complete supply chain, manufacturers in Greater China or European and American countries with technology should better grasp this market and deepen their operations, We have obtained a relationship with import partners.
II. Current Economic Situation in Russia
When the news reports that the depreciation of the Japanese yen has exceeded 17%, the Russian ruble has depreciated by over 55% this year. The reason for depreciation comes from the sanctions imposed by Europe and the United States on Ukraine, as well as the effects of the significant decline in oil prices. However, in this highly dependent market on imports, it will lead to an increase in import costs, resulting in high costs for local lamp sales in Russia. It is precisely for this reason that LEDinside analysts believe that local Russian companies are motivated to support the local supply chain, and foreign manufacturers with technical expertise can seize this opportunity to establish strategic alliances.
III. Career development highly relies on "partnerships"
You are facing the Russians, a proud and resilient fighting nation. Forget about the business models of "finding customers", "trial production samples", and "early introduction"; The Russians do not value your product or your price, they value your "partnership"! How good is your relationship with the government? How good are your relationships with financial institutions? Do you have any connections with companies supported by national sovereign funds? This is the key to attracting Russians to do business with you. The most important thing is that when Russians recognize you as a partner, they will not easily transfer orders, but firmly establish a deep cooperative relationship.
It seems that although the Russian market is large, efforts must be made to deepen cooperation. The duation of the ruble, the Ukrainian issue, European and American economic sanctions, and transportation issues all need to be resolved.
