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Philips expects 50 per cent of total lighting market to be LEDs by 2015

According to reports, this Diwali, a diya lit up the living room of the CEO of world’s largest lighting company,  Royal Philips Electronics.  Eric Rondolat, the global CEO of the Dutch giant’s lighting business, is pretty impressed by his company’s latest innovation – an LED diya developed in India, which creates the glow of a real candle.

“It can share the best place in the living room,” says Rondolat, 46, who joined Philips in April from  Schneider Electric, adding that the company will invest heavily into development of such local technologies and products in India, which will be taken to other global markets.

Rondolat was in India last weekend, in his first visit to the country after taking charge.

“India is one market where Philips will grow its investment since we are extremely confident about the growth potential,” he says.

He has his reasons, from young consumers to huge demand and potential. “The average age of consumer here is 26 years,” Rondolat says. “Almost 32% of people still don’t have access to electricity, and still there is a growing craze for latest technology and energy-efficient products like LEDs.”

India is the seventh largest market for Philips in lighting product sales.

Rondolat, who visited some Indian homes, says fluorescent lamps are used here unlike any other country. He wants to target such homes with Philips’ latest line-up of  luminaireBSE 0.35 % which can create various types of lighting. The stakes are high. The lighting business contributes more than half to Philips India’s overall revenue of 5,579 crore for 15 months ended March 2012, while globally the share of lighting business is just over one-third.

Rondolat says an unique advantage of Philips in India is that it is considered a local brand. Also, its lighting products are sold in more than one million retail points and the company has a strong manufacturing and R&D base here.

Philips hopes to bring down entry-level prices of  LED lamps and shorten the return on investment period for professional LED lights.

“We have recently developed an LED product in India, which would reduce the payback to less than 10 months for office lighting as compared to three years before. Then there are LED street lights which can be powered with  solar energy,” Rondolat says. “We would export such India-developed technology for our global operations.”

Rondolat is confident LEDs lamps will soon start cannibalising compact fluorescent lamps ( CFL) in India, with price gap reducing. “We estimate that 50% of the total lighting market will be LEDs by 2015 and similar trend will be in India as well in a couple of years more,” he says. He points out that Philips’ LED lighting business is growing 51% a year against 4% growth for overall lighting business.

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