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Russian lighting industry. Development prospects

27.02.2018
Russian lighting industry. Development prospects

Russian lighting industry. Development prospects 

 

The lighting industry was considered a fairly stable and conservative sector for a long period. Starting from the 19th century when the first light bulb was invented and until the present day several generations of lighting can be identified. LED products are today the standard bearer of the lighting industry. In the opinion of the experts that we managed to contact on the eve of the trade show WorldBuild Moscow/MosBuild 2018, LED products already account for a large share of the market. Furthermore, this segment is likely to continue growing. The replacement of sources of light by more energy-efficient options does not only generate significant profits, but also reduces carbon dioxide emissions into the atmosphere. A light-emitting diode as a source of light is far more durable than bulbs and rules out the need for a replacement. In addition, thanks to the appearance of LED technologies more flexible and varied design options are available.

 

 

 

 

In the opinion of specialists from the lighting industry - participants in the trade show WorldBuild Moscow/MosBuild 2018 - the development prospects of lighting products in Russia are assessed positively. First and foremost, this is due to the appearance of innovative solutions and state initiatives for energy consumption. The high potential of the construction of commercial space, in particular, retail areas, is facilitating development of the market. The main growth driver for the industry will come from the development of LED technologies, and demand growth rates for LED lighting that exceed falling prices for them. In actual fact, the development of LED sources of light represents the main opportunity to increase market share.

 

 

 

 

FAVOURITE, International Lighting Co

 

What would you describe as the strengths and advantages of the WorldBuild Moscow/MosBuild trade show compared to other marketing communications tools?

 

WorldBuild Moscow/ MosBuild offers an extremely broad range of goods and services in the area of decorative finishing materials. As a result it can attract the maximum number of visitors from all over the country, who select goods in different categories for their trading businesses. In other words, we usually participate in the trade show dedicated to our sector Interlight – this is a highly-specialised exhibition showcasing lighting equipment and related products. In general the exhibition is attended by the representatives of stores or companies specialising in lighting equipment. However, stores selling a wide range of finishing materials, for example, wallpaper, flooring materials, bathroom equipment and lights, prefer to visit multi-disciplinary trade shows – such as WorldBuild Moscow/ MosBuild, where they can select immediately all the goods they need for their trading outlets. That is why we decided to participate in this trade show, which has helped us expand our client base significantly.

 

 

 

 

Current state of the Russian market. How will the market change over the next five years?

 

The Russian market is changing rapidly. There is acute competition in the lighting industry. It now so happens that the degree of professionalism and the extent of the range of lighting fixtures in Russia are far higher than in countries in the European Union. The absence of copyright protection might have played a major role, which has enabled companies to adapt European designs to the Russian market at far lower prices. Similarly, in Russia for the time being retailers of decorative finishing materials hold far stronger positions against the backdrop of the explosive development of DIY. Retailers offer a more extensive and diverse range of top quality products, while DIY for its part offers a simpler and cheaper range. This balance in Europe has been undermined in favour of DIY, resulting in the narrowness and simplification of the low price and average price products on offer.  At the same time, the majority of the population in Europe cannot afford products in the higher price band. 

 

 

 

 

In Russia DIY stores continue developing actively. However, there are positive aspects. For example, Leroy Merlin is developing the area of designer products – in the case of lighting fixtures, these products are on offer in the higher pricing category and supported by different, complex and interesting designs. The second market development trend today, which will be even more pronounced over the next five years, concerns the development of online trading. In our lighting segment online sales already account for more than 35% of total turnover. Online trading is moving into the regions – from big cities to smaller ones – this is an area that had not been penetrated a year or two years ago. Accordingly, online trading has major growth prospects. The third market development trend concerns finishing materials, where designers are taking centre stage: the number of designers, their professionalism and influence are increasing. More and more companies in our industry are creating departments to work with designers. Sales in this area are becoming more tailored-made to individual customers, while the sale support service is developing more and more and becoming more complex. Here I am referring to the creation of 3D product models, which facilitates the work of designers creating their interior designs. On occasion this even involves the creation of a new product for a specific design.  

 

Summarising the results, in the next five years I would expect to see the following: 1. Significant expansion in the DIY platform, and here it is important that we don’t lose shops with a more varied range in terms of both design and pricing. 2. Online trading is becoming more accessible in all Russian regions and will become the main competitor to off-line trade. 3. The role of the designer and the individual nature of projects will increase, while designers will become the most important representative of the customer in retail – whoever becomes friends with the designer will win.

 

 

 

 

What recommendations would you give to competitors and companies that want to work on the Russian market?

 

My recommendations to competitors and companies that want to work on the Russian market – study the previous point and move in these directions.  

 

 

Statistically, in your opinion, what lighting products are most popular with Russian customers and why?

 

Statistically, the Russian consumer is flexible when it comes to taste preferences. Whereas in the past lovers of the classical style would prevail, interior lighting fixtures in the loft and country style are also popular these days. Purely technical lighting fixtures are becoming a key component of the lighting for decorative interiors – tracks, recessed lighting fixtures, and spots. More often than not such lights are fitted with an LED light source. However, until now the first question from end consumers has been: “How can I change the bulb?” If the LED module is used, it cannot be changed and the burned out lighting fixture has to be replaced. This is expensive and inconvenient for both sides – the consumer and the seller. That is why we are trying to develop decorative traditional lighting fixtures with a traditional base (Е14, Е27, G9, GU10, etc.). Such bulbs are easy to change – moreover, it is always possible to choose between an incandescent bulb, low-energy bulb or LED.

 

 

 

What technologies used to manufacture/install doors that you have encountered in 2017 do you believe to be most interesting//promising//unusual//progressive? (For example, from the perspective of reliability/environmental performance/design).

 

We did not come across any radically new lighting production technologies in 2017. Lighting adapts to interior design trends very rapidly, but the technologies are not developing as rapidly – to a large extent this represents a continuation of the development of LED technologies – most importantly, in our industry we expect LED technology to become cheaper and improve quality-wise.

 

 

What new products do you plan to showcase at WorldBuild Moscow/MosBuild in 2018?

 

At WorldBuild Moscow/MosBuild in 2018 we plan to showcase the new products of our design bureau in different stylistic areas – a new interpretation of a classic, bright art deco, contemporary lighting fixtures in a range of styles: fusion, country, loft. We plan to substantiate our status as the favourite of designers who will be able to find everything they need from us, most importantly in terms of originality, trends, and an excellent combination of price and quality.   

 

 

Alina Postnova, Business Development Director, FAVOURITE, answered the questions in the interview 

 

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