US trade war pushing foreign lighting companies to shift focus of China production to serve domestic market
- Lighting producers are targeting an increasingly wealthy and educated Chinese population with value-added products such as Bluetooth enabled appliances
- Next driver of consumption in world's second largest economy will be services and leisure experiences, says researcher TS Lombard
Foreign factories in China are increasingly turning their focus to the mainland’s huge domestic market given the considerable challenges posed by trying to relocate production out of China to avoid American tariffs.
It has been 27 years since Panasonic, the Japanese maker of consumer electronics, established a lighting factory in Beijing, joining General Electric, Bayer and Beijing Mercedes in the first batch of foreign firms investing in the Economic Technological Development Zone of the nation’s capital city. There, they enjoyed lower tax rates and other preferential treatment.
First, we are focusing more on China’s huge domestic market. Second, we are connecting our products together to create a wholesome scheme used in households, nursing homes and hospitals
Panasonic, which started in 1918 as a manufacturer of light bulb sockets and wiring instruments in the Japanese city of Osaka, is now shifting its attention to smart household technologies to address an ageing and increasingly health conscious Chinese population. It currently has 66 manufacturing plants in China’s eastern coastal regions for the production of products ranging from rice cookers to automatic subway doors to electric vehicle batteries.
“First, we are focusing more on China’s huge domestic market,” said Masayuki Fukazawa, senior manager of the company’s lighting global business planning division in Guangzhou. “Second, we are connecting our products together to create a wholesome scheme used in households, nursing homes and hospitals.”
The biggest opportunities in China’s domestic market of 1.4 billion people are likely to be for companies that can supply useful services and leisure activities in the future, said Rory Green, China economist at TS Lombard.
