Dutch lighting specialist helps advance smart city initiative with lower energy use and reduced operating costs
Ahead of the inaugural China International Import Expo last year, the Bund, Shanghai's famous waterfront, was given a dramatic face-lift when it was illuminated along with three bridges and more than 40 buildings in the financial and tourist districts.
Dutch lighting specialist Signify, formerly known as Philips Lighting, was responsible for the illumination. The company said it is the largest, single, architectural lighting project in Signify's 127-year history and illustrates the company's leadership in unlocking the potential of connected lighting to transform cities.
"The upgraded lighting system helps demonstrate Shanghai's cultural heritage in a more vivid way, creating impressive night scenes in an energy efficient way," said Eric Rondolat, CEO of Signify.
With more than 44 million connected light points and 6.4 billion euros ($7.21 billion) in sales last year, Signify is rated by multiple market agencies including the Dow Jones Sustainability Index as the top player in conventional lighting, LED and connected lighting.
Rondolat said Signify is committed to helping Chinese cities to develop more eco-friendly business and tourist landmarks by using connected LED lighting to lower energy use and reduce operating costs. The new lighting is expected to save the city 50-70 percent of its annual lighting costs compared to areas using conventional lighting.
Some of Signify's exhibits during the last CIIE underscored its ambition to help advance China's smart city initiative, such as Li-Fi lighting, horticultural products for city farms, a newly launched internet of things platform and the Philips Hue, a smart lighting system for homes.
China Daily spoke to Rondolat about the firm's growth strategy in China, product debuts and its participation in the second CIIE.
What are the biggest changes China has made since your first trip here?
China has the world's largest population and the second-largest economy. Together with an improvement in living standards, we see an astonishing achievement in the biggest high-speed railway network, the biggest highway network and the largest internet population in the world. China is an important market for Signify. After nearly a century of development, China has become Signify's second homeland. With more than 127 years of innovations, Signify's Philips brand lighting products entered China in 1920s. We established our first joint venture in Shanghai in 1985. Now, Signify's China headquarters and its second-largest R&D center are located in Shanghai.
What's your take on China's improved business environment for foreign businesses?
We encourage and support discussion about the upcoming new laws on foreign investment that would further reinforce the importance of a fair playing field in terms of investment. Signify had the opportunity to be a part of the first CIIE. We welcome initiatives that help people to do business together. As a business community, we see the world developing in a flat way. There are opportunities around the world. We need to adapt to different cultures to promote business. Is Signify a Chinese company or a foreign company? It's difficult to say. Most of our employees in China are Chinese. In this country, we recruit people, we pay all our taxes, we invest in R&D, we transfer technology, we invest in manufacturing, and we also continue to develop business with Chinese customers. So maybe we'd rather say we are Chinese investors. Because while we are creating wealth in China, we are also contributing to its development. We regard China as a global manufacturing and R&D base.
How do you think China should further open up its economy?
We welcome open trade and believe in open innovation as a means to foster mutual benefits and prosperity. History shows that an open, inclusive approach is the basis for developments and prosperity. We have seen this in the past and witness it in our daily lives. We know the technological innovation capacity of a country is an important factor affecting the competitiveness of international trade. In the wave of the fourth Industrial Revolution, this influence is becoming increasingly important and outstanding. We look forward to extending our partnership with China by exploring an open approach to trade and innovation, particularly for the fourth Industrial Revolution and the IoT, contributing to the success of the Belt and Road Initiative and to the transition toward smart cities in China.
Your conventional lighting income continues to decline. How soon do you think the LED business can compensate for this shrinking in revenue?
The conventional bulb market is indeed declining, but we are declining less than the market. Instead we are increasing our market share, so it's still quite a sizable business for us. We are keeping our profitability high and the cash flow is still good. The other businesses are growing in a complicated market because the Chinese economy is not (growing) the same as before, and neither is Europe. The rest of the growth engines have grown in both sales and profits. It proves their contribution to profits.
What's your take on the current global economic uncertainty especially in US-China trade? How will this affect your company's business?
The world has become a much more complex place to do business. Although the trade friction hasn't had a real impact on us yet, we have of course paid attention to the two big superpowers in the world that not only have an impact on bilateral relationships, but also worldwide. We believe in free markets, and global market uncertainty is detrimental to business activities. We think the world is global, technology is global, and knowledge is global. We will continue to invest quite a lot worldwide, and of course in China. We have made two acquisitions, LiteMagic and WiZ. We continue to invest here because we believe in the potential of the Chinese economy.
You had a big presence during last year's CIIE. What about this year?
We plan to make our exhibition space 50 percent bigger at about 300 square meters. Meanwhile, we will showcase our latest innovations, including Li-Fi to Li-Fi Generation 2, Zigbee based Hue, Wi-Fi-based WiZ, horticulture lighting, animal lighting, 3D printing and other new applications.
Last time we talked about Li-Fia two-way, high-speed wireless technology similar to Wi-Fi, which uses light waves instead of radio waves to transmit data. Signify's Li-Fi products could provide a broadband internet connection through light waves without compromising lighting quality. But it was the beginning of it. Now we can say that we have four pilots in China for Li-Fi - one with the China Academy of Building Research, where they're testing and improving the capacity of that technology. So, we've moved from presenting the technology to application, finding customers and developing pilots. So this is the big change from last time.
Do you have any plans especially in the Yangtze River Delta region?
We don't only look at our investment from a geographic perspective. We have invested in research and development and China is home to the second biggest R&D center that we have. We develop not only for China but also for the world. It's mostly in Shanghai but also in Shenzhen. With that company, we are "potentializing" it, which is increasing sales in China, but also helping the products that company has worldwide. We believe in investment, and we're going to invest more.
Can you share with us your R&D efforts in China?
A lot of what we do worldwide is developed here. We've developed software. We talked about Interact City (CityTouch flex), applications for smart lighting. We have developed SunStay, a solar integrated luminaire and some of the down-lights that we have developed worldwide. A lot of applications are developed here and used worldwide. We develop components used in different finished products. The standards around the world are different. Our components can be used everywhere, but the end products are sometime different. In terms of lamps, LED lamps, about 90 percent of the world's LED-related research and development is completed in China. Not only manufactured in China, but also developed here.
What is the rationale behind Signify's "Lighting up Shanghai Landmarks" initiative?
Signify is committed to helping Chinese cities to develop more eco-friendly business and tourist landmarks by using connected LED lighting to lower energy use and reduce operating costs. The new lighting is expected to save the city 50 to 70 percent of its annual lighting costs when compared to areas lit by conventional lighting. The switch-on of the massive display was witnessed by President Xi Jinping and foreign heads of state attending the opening of the CIIE held for the first time in Shanghai. Interact Landmark provides dynamic lighting where each luminaire can be remotely monitored and controlled individually or in groups to create unique, dynamic night scenes on weekdays, weekends or holidays. Also, a late-night mode can be switched easily to facilitate energy saving and further extend the life of the lights. Furthermore, the Interact Landmark system is used to detect and manage faults, improve asset management and thereby reduce costs.