Osram encapsulates China's factory to compete for LED lighting channels

[Text / Long Zonghui] With the three "swords" of products, technology and brand, multinational companies have entered the Chinese market at the beginning, the days can be very moist, but with the follow-up of other companies, they are inevitably facing competition. pressure. Lighting giant Osram has encountered such a situation, but it is seeking change.

On May 21st, the OSRAM Wuxi plant was officially put into operation. This is the third Osram plant in the world with a total investment of 250 million euros. It is expected to reach an annual output value of 500 million euros after it is put into production.

Wolfgang Dehen, Chairman and CEO of Osram Germany GmbH, said at the launching ceremony that the Chinese market is the largest single lighting market in OSRAM, and OSRAM hopes to better understand and integrate into the Chinese market through the investment capacity of Wuxi. “Osram Opto Semiconductors has achieved impressive results in the past 40 years and has its own unique position.

Osram insisted that the self-built back-end factory is still more strategically considered. They insist that most of the chips come from their own factories, trying to control the entire lighting product from the chip end. At the same time, they believe that only by controlling the entire value chain, can we optimize the product as much as possible and ensure the best in terms of performance, quality and reliability.

Wolfgang Dehen said that Osram’s firm presence in China was due to his rapid development in the Chinese market. "China's lighting market will continue to maintain a growth rate of nearly 10%, surpassing the growth rate of other markets. It is expected that China's LED lighting market share will exceed 60% in 2019, compared with less than 30% last year. Osram Asia Pacific market share It is lower than our global market share, so we have great potential in the Asia Pacific region, especially in China.” In the long run, the potential of the Chinese market is equivalent to the entire North American market. From the financial report released by OSRAM, Osram's revenues in the world including Europe, the Middle East, Africa and the United States all declined, but the Chinese market grew by 0.2%.

Wu Shengbo, President and CEO of Osram Asia Pacific Asia Pacific, expects that by 2017, the Chinese market will account for 45% of the Asia Pacific market, and the Asia Pacific region will account for 47% of the global market. From this point of view, the Chinese market will account for 1% of the global market. 4, so the Chinese market is very important from a strategic perspective. The Chinese lighting market is not exactly the same as many markets in the world. The market share of the lighting companies that have done the best in the Chinese market is only about 3%. Therefore, no company has an absolute monopoly in the market. China's lighting channels are also very fragmented. The largest 10 dealers in the world have more than half of the channel resources, but these do not exist in China. In the Chinese market, as long as there are suitable products, appropriate marketing strategies, appropriate costs and value strategies, there will be great growth opportunities.

“Over the past two years, OSRAM has made a lot of adjustments in management and products. In June, we launched a number of products suitable for channel development. With the launch of new products, our channel construction is also very fast.” Wu Shengbo said. Last year, OSRAM moved its Asia Pacific headquarters from Hong Kong to Shanghai, which fully demonstrates that OSRAM has already regarded China as a local market. In the past few years, they have also established strong cooperative relationships with Chinese customers. Especially during the construction of the Shanghai Center, OSRAM provided lighting equipment for its façade. Now, the Wuxi factory will cooperate with Chinese partners. Push forward further. “It’s impossible for the German headquarters to do everything. We have corporate executives in every region. They can communicate with regional customers on behalf of regional customers from the regional market, and China is not.” Wolfgang Dehen said.

Osram is proud of its LED lights in the global market almost monopolized. Germany's several high-end automakers, including BMW and Mercedes-Benz, are Osram's customers. Although the volume is not as large as the general market, the gross profit is very high. In addition, OSRAM has a considerable market share in many areas such as smartphones and smart office. However, its retail access and engineering orders in China are slightly inferior to those of Philips Lighting. The industry speculates that it is reasonable to jointly develop the domestic market through the establishment of a government relationship in Wuxi.


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