Industry Development Overview
1. Urban Road Lighting Industry
In recent years, China has experienced rapid social and economic development, with a continual rise in urbanization rates. In 2021, the urbanization rate in China reached 65.22%. Although this is relatively low compared to developed countries around the world, under the large cycle of urbanization in China, it is expected that over the next decade, the urban market size in the country will continue to grow steadily. This will lay a solid market foundation for the sustained development of China's urban lighting industry. With the implementation of the 14th Five-Year Plan, which promotes new urbanization construction and clearly encourages and supports the construction of transportation networks, there is an aim to improve the coverage of highways in cities, providing new development opportunities for the expansion and industrial upgrading of urban road and city lighting markets.
Affected by macroeconomic fluctuations and economic downturns, some domestic infrastructure and municipal projects have been halted or even canceled. However, with the progression of the "Two New and One Heavy" (new infrastructure, new urbanization construction, and major projects such as transportation and water conservancy) and the construction of smart cities, the smart light pole industry market is continuously expanding. China's urban road lighting industry is entering a new stage of intelligent development.
2. Urban Landscape Lighting Industry
Urban landscape lighting is a combination of art and science, involving the comprehensive application of multiple disciplines such as optics, aesthetics, electrical engineering, architecture, and computer science. It is a comprehensive and systematic engineering project. With China's economic development and the improvement of residents' living standards, urban lighting has evolved beyond the simple process of illuminating objects. Excellent urban lighting schemes are capable of integrating art, technology, and urban cultural characteristics through lighting, allowing the city's unique features to be reshaped and represented at night, showcasing the city's unique nighttime scenery.
As the national "two new and one heavy" construction projects unfold, the urban landscape lighting industry has entered a new normal of rational construction. Relevant enterprises in the urban landscape lighting industry have entered the track of transformation, with some transitioning to cultural and tourism night tour projects, while others are transitioning to smart city construction. Consequently, "small and beautiful" cultural and tourism night tour projects have emerged in large numbers, and urban landscape lighting continues to play an important role in the urban lighting industry.
Industry-Related Technical Conditions
1. Scheme Design Technology
Whether the design of an urban lighting scheme is reasonable directly determines the level of subsequent product production, engineering construction, and management maintenance. Different enterprises have their own design styles, and there are significant differences in technical levels. In recent years, urban lighting no longer pursues only lighting functions but also seeks aesthetic, environmental, and cultural functions. This requires that the design of urban lighting schemes be more culturally oriented and reflect local characteristics, posing higher technical demands on the scheme design of urban lighting. Emphasizing aesthetics, environmental protection, and integration with the city's own cultural characteristics will be the trend for future urban lighting design.
2. Product Manufacturing Technology
The product manufacturing phase of the urban lighting industry involves transforming the designed scheme into industrial products, covering numerous technical areas such as process flow design, mold design, product prototyping, and mass production. Currently, standardized production technology in the industry has matured. The technical aspects of urban lighting product manufacturing are mainly reflected in the manufacturing of mechanical components and high-tech, high-requirement sectors like LED lighting. The trend in mechanical component manufacturing mainly focuses on process flow transformation and the research, development, introduction, and use of new equipment. LED lighting is moving towards intelligent lighting, human-centric lighting, and a circular economy. In the future, the lighting industry will pay more attention to smart technology, focus more on human needs, and emphasize green environmental protection.
3. Intelligent Urban Lighting Technology
Intelligent urban lighting plays a significant role in the construction of smart cities, and smart light poles are one of the foundational infrastructures of smart city development. Smart light poles can function as "multi-functional poles," serving multiple purposes simultaneously, such as communication poles, street lights, traffic monitoring, security, traffic signs, and roadside billboards. Combined with sensory interaction technology and big data algorithm technology, these poles can provide decision-making factors for modern urban management. Consequently, technologies from many other fields are beginning to integrate with the technology related to urban road lighting. The trend for the future development of this industry lies in the combination of urban lighting with various cutting-edge technologies to achieve intelligent advancement.
Industry Competition
The urban lighting industry is mainly divided into urban road lighting and urban landscape lighting, both of which have relatively dispersed market concentrations. The market concentration of the urban road lighting industry is low, but several large-scale enterprises have emerged. At the same time, a few enterprises in the urban road lighting industry focus on research and development, continuously innovating processes and products. Some segmented product markets, such as smart light poles and intelligent control systems, also have a high market concentration.
According to related research on the official website of the China Association of Lighting Appliances, the current competitive landscape of the urban road lighting industry can be summarized as "two concentrations and one dispersion". The "one concentration" refers to the emergence of several leading enterprises in the industry, including Huapu Yongming, Zhouming, Sansi, Longteng, Modern, Samsung Lighting, and other large-scale enterprises. The "other concentration" refers to the formation of manufacturing and supply chain concentrated areas represented by Gaoyou in Jiangsu, driven by leading enterprises such as Longteng and Modern, and the industrial clusters where numerous small and medium-sized enterprises gather. The "one dispersion" refers to the still low market concentration in the urban road lighting industry. In the urban road lighting industry, the aforementioned leading enterprises are still rare, and there are no enterprises with a scale of 1 billion yet, and those with a scale of 500 million are few. Enterprises with sales of tens of millions are numerous and make up the majority. However, as the demand for urban lighting markets evolves towards complexity, customization, and fragmentation, the requirements for enterprises' research and development, manufacturing, service, and brand will be further elevated, and the competitiveness of leading enterprises will also be strengthened.
The market concentration in the urban landscape lighting industry is generally low, with relatively intense competition. In recent years, with the advancement of building a "Beautiful China" and the improvement of urbanization levels, the landscape lighting industry has developed rapidly, and the construction of landscape lighting has gradually moved towards homogenized competition. The competitive field of landscape lighting has gradually extended from competition based on the hard power of landscape lighting construction to competition based on soft power, such as landscape lighting planning and design capabilities, project management abilities, and post-service capabilities. Currently, most enterprises in the industry only possess the hard power for landscape lighting construction, with only a few enterprises having both strong hard and soft power advantages in landscape lighting. These few enterprises, by continuously extending the industry chain, provide users with one-stop, full-cycle landscape lighting solutions, which has promoted the improvement of the industry's competitive landscape.
Industry Barriers
1. Talent Barrier
The high professional technical requirements of the lighting industry necessitate businesses to reserve excellent lighting designers and engineers. Excellent lighting designers need to possess artistic aesthetics, architectural interpretation, LED technology mastery, understanding of human geography environment, and spatial perception. Only with these skills, can they implement lighting design in practice while taking into account the design, functional effects, and quality safety. Furthermore, during the implementation of lighting projects, technical personnel with professional knowledge of lighting engineering are needed to provide technical support throughout the construction phase. Currently, there's no systematic lighting talent training mechanism in place domestically, mainly relying on independent training by enterprises. Simultaneously, the continuous expansion of projects and the increasing complexity, precision, and intelligence of lamp production technology have also raised higher requirements for project management personnel, production management personnel, and technical research and development personnel.
2. Technical Barrier
The urban lighting industry is paying more and more attention to the quality and artistic effect of lighting projects, from project design to construction, all of which have a certain level of technical difficulty. The lighting industry covers fields such as science, technology, culture, and economics. Its research and innovation involve disciplines including electrics, optics, aesthetics, architecture, and computer science. The ability to innovate in technical fields and the ability to integrate related technologies are necessary conditions to ensure the advanced and continuous level of enterprise research and development. Therefore, enterprises in the industry need to possess strong comprehensive research and development capabilities. At the same time, due to different conditions in various places, enterprises need to decide on construction plans based on specific situations, and practical experience becomes the company's unique technology. Therefore, the research and development and construction of urban lighting products have formed a high technical barrier for newcomers.
3. Sales Channel and Brand Barrier
Urban lighting enterprises have a wide distribution of customers, and the development of new clients typically requires a significant investment of resources. It takes a long period of cooperation and accumulation to establish stable relationships. New entrants to the industry have lower visibility and find it challenging to achieve high recognition and win customer trust in a short time. Therefore, new entrants face poor acceptance and encounter obstacles in developing sales channels.
