The Effect of LED Growth on the CFL Market in India


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The report elaborates on the probable effect of LEDs growth on the CFL market in India; given CLFs are the current dominant technology and how it will change in the coming years with a wider acceptance of newer technology, the LEDs.

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The Effect of LED Growth on the CFL Market in India

  1. 1. December 2012 The Effect of LED growth on the CFL market in India Contents: 1. Current scenario | Dominance of CFLs 2. Future Scenario | Impact of LEDs 2.1 State of LEDs Manufacturing in India 2.2 Growth Drivers of LEDs 2.3 Impact on sale of CFLs 2.4 Impact on End User Segments 2.5 Impact on geographical usage 3. Conclusion 4. Technical AnnexCopyright © 2012 ValueNotes - All rights reserved
  2. 2. Current scenario | Dominance of CFLsUntil about 10 years ago, the lighting market in India was dominated by fluorescent tube lights (FTLs) andincandescent bulbs (ICLs). They were easily available, cheaper when compared to other lighting sources andwere easy to install and maintain. But the biggest drawback of using these light sources was their inefficiency.If we talk about ICLs, only 20% of the energy consumed by these lamps gets converted into light, while therest turns into heat. Despite the issue of poor conversion, FTLs and ICLs continued to grow and dominate themarket in the absence of a cost efficient alternative. However, given the poor conversion ratio and theconstant focus on power consumption, as high as 17% for lighting, meant such a situation was unlikely tocontinue.Therefore the government started taking initiatives to promote the ‘then feasible’ energy efficient lightingsource, that is, the compact fluorescent lights (CFLs). Initially these lamps were quite expensive whencompared to the age old ICLs and FTLs, but with spreading awareness and special subsidies by thegovernment, the prices of CFLs came down drastically in the last few years, and therefore the demandincreased substantially. According to the industry figures published by Electrical Lamp and ComponentManufacturers Association (ELCOMA), the manufacturing of CFLs in India has grown manifolds from a mere20 million pieces in 2002 to a massive 340 million pieces in 2011.CFLs find their application across all end user segments but the biggest reasonfor CFL dominance is its wide acceptance by the residential segment. Todayalmost 60% of Indian households use CFLs, whether urban, semi urban orrural. Also, CFLs are up to four times more energy efficient when it comes tolumens/watt output. If we can replace a 100 watt ICL with a 22 watt CFL, we getthe same lumen output but the CFL will use70-80% less energy. The life of anICL is 1,000 hours but for a CFL it goes up to 8,000 hours. They are alsoaesthetically more appealing than the ICLs as they come in different shapesand sizes. 2 Copyright © 2012 ValueNotes - All rights reserved
  3. 3. Current scenario | Dominance of CFLsThe government has been one of the biggest contributors to the overall CFLs market, as for the last 10years they have been trying to push CFLs as against older technologies. For example, Punjab State PowerCorporation (Powercom) replaced almost two crore ICL bulbs with CFLs across the state under BachatLamp Yojna in 2009. Similarly, Karnataka government also planned a phase out plan for ICLs where theywere giving free CFLs in exchange of ICL bulbs. But in the last two to three years, the growth of CFL lampshas slowed down a little bit. Diagram 1: Declining growth of CFLs manufactured (in volume) in the last four years To download the entire Whitepaper ‘The Effect of LED growth on the CFL market in India’ follow the link : 3 Copyright © 2012 ValueNotes - All rights reserved
  4. 4. BAG Electronics ( BAG Electronics is known across the world as a premier partner in the lighting industry. They create innovative solutions and new ideas for more efficiency and lower energy consumption, and as such are active in markets that point to the future. Their corporate group develops, manufactures and markets electronic components for the operation of fluorescent and high pressure discharge lamps as well as for LED applications. They offer not only products but made-to-measure solutions, and they meet such demands with efficient processes and optimal delivery performance. They have approximately 3,000 employees around the world. In addition to their headquarters in Arnsberg, Germany, they also maintain sales and development locations in Europe and Asia as well as production sites in China, India and in the Philippines. BAG offers a wide spectrum of electronic control gear for the operation of LED modules with the ZITARES product family. Long term BAG experience in the sector of electronic ballasts was implemented for development of the ZITARES control gear in order to achieve maximum quality and reliability for the various applications. Because LED today offers an efficient alternative to conventional light sources in many applications, the ECG is also an essential factor for considering total system efficiency. ZITARES in this respect offers a selection of products with an above average efficiency of up to 93%.ValueNotes ( ValueNotes is an India-based provider of business research and intelligence. Over the past ten years, ValueNotes has specialized in the management of research, business intelligence, and information. We work with leading global corporations, consulting firms, research and B2B publishers, PE and VC firms, and money managers.  India market entry studies (opportunity assessment, market sizing and segmentation, competitive landscaping, partner selection and due diligence)  Vertical Expertise (BFSI, Pharma, Healthcare, Engineering, Manufacturing, Infrastructure, Industrial, Automotive, Retail, FMCG, Education and Training, Telecom, Media & Internet)  Desk – based / internet research (Data collation and synthesis, financial analysis, company profiling, internet – based comprehensive research studies)  Marketing Communication Support  Survey modelling and analysis  White label industry reports 4 Copyright © 2012 ValueNotes - All rights reserved
  5. 5. Thank you ValueNotes | Pune, India | T: +91 20 6623 1700 | E: Research & Indian Markets m Consulting Outsourcing IntelligenceCopyright © 2012 ValueNotes - All rights reserved