Insight Thrive or Struggle: Can Zhejiang Yankon Lighting Survive the Evolving Market?

In 1975, Chen Senjie founded the predecessor of Yankon Group—Lidong Light Bulb Factory—by relying on fourteen simple rooms as factory buildings and working with fellow villagers. As the technical lead and primary driving force, Chen oversaw the development of a low-power, straight-tube fluorescent lamp, gradually opening up the market. With keen insight, he recognized that energy-saving lamps were the most promising product and would inevitably play a central role in energy conservation. After more than a hundred days of dedicated research, the factory successfully produced China's first H-shaped tricolor rare-earth compact fluorescent lamp (CFL), pioneering the green lighting industry. Subsequently, various models of energy-saving lamps were developed, and "Yankon" energy-saving lamps were exported to Southeast Asia, Europe, and the United States. The small workshop-style factory evolved into a fully operational manufacturing facility.

Establishment and Expansion​

In 1994, Zhejiang Yankon Group was formally established. The following year, the company's headquarters relocated from Lidong Town to Baiguan, the city's administrative center. In 1996, Yankon Group became the first domestic lighting manufacturer to obtain ISO9001 quality system certification. Chen Senjie quickly identified the potential of T5 fluorescent tubes and led a research team in developing the third-generation energy-saving straight-tube fluorescent lamps. By the end of 1996, the first T5 sample was produced, and its appearance at the 1997 Energy-Saving Lamp Expo attracted international attention. This milestone firmly placed Yankon at the forefront of global lighting technology. Additionally, in 1997, the company transitioned to a shareholding structure under Chen's leadership.

IPO and Growth Challenges​

In July 2000, Yankon Lighting was officially listed on the Shanghai Stock Exchange, becoming the first A-share listed company in China's lighting industry with high-tech enterprise status. At the time of its listing, Yankon Lighting was China's largest CFL lamp manufacturer. However, the company faced a challenge: its reliance on a single major client. A significant portion of Yankon's business involved OEM production for Philips (now Signify), with 50% of its energy-saving lamp business dedicated to this partnership. This high dependency on a single client underscored the need to develop new customers and explore new markets. As LED technology gained traction, Yankon gradually entered the LED lighting industry, expanding its LED light production capacity and securing major clients like OSRAM and Lowe's, thus mitigating its reliance on Philips. Through strategic overseas expansion, the company successfully diversified its market reach. In 2018, Yankon's revenue reached 5.616 billion RMB, and in 2020, its net profit hit 485 million RMB, setting historical records.

Product Diversification and Global Expansion​

As a privately controlled, publicly listed lighting company, Yankon Lighting focuses on the research, development, production, and sales of lighting products while providing comprehensive lighting solutions. The company's main products include LED lights and lighting control systems, covering commercial, residential, office, industrial, and educational lighting. Additionally, Yankon has expanded into emergency lighting, horticultural lighting, and electrical appliances. The company has an annual production capacity of 400 million LED lamps and 120 million LED fixtures, with four major production bases in Shangyu (Zhejiang), Xiamen (Fujian), Yujiang (Jiangxi), and Jinzhai (Anhui), achieving a large-scale manufacturing effect. Each base serves different markets: Shangyu focuses on the Americas and retail clients, Xiamen serves Europe, Oceania, and major international brands, Jiangxi caters to the Asia-Pacific region, and Anhui primarily supports domestic customers.

Revenue Decline and Strategic Shift​

Due to market conditions and operational factors, Yankon Lighting's revenue has been declining since 2018. In 2021 and 2022, revenue fell to 4.264 billion RMB and 3.731 billion RMB, marking year-on-year decreases of 11.55% and 12.50%, respectively. Net profit also dropped to 316 million RMB and 184 million RMB, down 34.82% and 41.78% year-on-year. The 2022 net profit was equivalent to the company's earnings in 2010, effectively rolling back 12 years of progress. This decline posed a significant challenge, signaling the limitations of the OEM model. Consequently, shifting towards self-branded products became a critical decision for Yankon's sustainable development.

The Dual Transition: Reinventing the Future​

Determined to transform, Yankon Lighting embarked on a dual transition—from an OEM-focused model to self-branded sales and from lamp production to luminaire manufacturing.

Strategic Overseas Growth​

Yankon Lighting has consistently pursued global expansion. With a balanced international marketing strategy, the company has established sales offices in Belgium, Germany, the United States, France, Denmark, Canada, Australia, and Singapore. Through both OEM and direct sales, it has successfully penetrated markets across the Asia-Pacific, Europe, the Americas, the Middle East, and South Africa.

As a traditional foreign trade enterprise, Yankon Lighting initially relied on shipping agents to deliver goods to customers. Once an order was received, the company would ship the goods and complete the transaction upon receiving the bill of lading. However, this approach proved costly for small orders. In early 2008, Yankon invested $18 million to establish its first overseas warehouse in Los Angeles, covering nearly 10,000 square meters. This allowed products to be stored locally, ensuring faster delivery to overseas customers. The overseas warehouse model solved the "last-mile" delivery challenge for traditional exporters. Later, Yankon expanded its warehouse network through acquisitions in Belgium, Germany, and France, further strengthening its international market presence.

Domestic Market Expansion​

Meanwhile, Yankon Lighting has been increasing its domestic market share and investing in distribution channels. Since 2014, the company has been actively expanding in China, focusing on self-branded sales and channel-driven growth. The strategy prioritizes second-tier cities while gradually expanding into third- and fourth-tier cities and rural areas. Today, Yankon has over 2,000 distributors and 1,500 branded stores across China, solidifying its position as a leading lighting product and system provider. Through strategic meetings and retail channel initiatives, the company continues to drive domestic market growth.

Competitive Challenges and Future Outlook​

By 2023, self-branded sales accounted for 57.28% of Yankon's total sales, reflecting a 7% increase year-on-year. The company also implemented a multi-brand strategy for international markets, leveraging brands such as "Energetic," "MEGAMAN," and "Nordlux." This strategy led to significant growth in e-commerce sales across multiple regions, with the Americas business unit reporting a 22% year-on-year increase in Amazon sales. Additionally, Yankon successfully transitioned from a light source-focused business to a fixture-based company, with fixture sales reaching 76.93% of total revenue. Several divisions surpassed 70% in fixture sales, including Australia (91.3%), Denmark (82.1%), China channel projects (82.9%), and American engineering projects (85.5%).

Looking forward, Yankon is expanding its product lines into integrated lighting solutions, offgrid lighting systems, and smart lighting to drive sales growth. The company aims to enhance product quality and efficiency while improving user experience. Yankon Lighting's CEO, Wu Guoming, emphasized the company's commitment to market expansion, brand development, product innovation, intelligent manufacturing, supply chain management, customer service, and talent development to maintain its industry leadership and ensure steady growth.

Challenges in Yankon Lighting’s Competitive Advantage​

Yankon Lighting's core strength in the international market lies in large-scale production and cost control, enabling it to compete in price-sensitive traditional lighting segments. However, this advantage is now facing structural challenges. The company’s product portfolio is highly concentrated in general LED lighting, characterized by slow technological iteration and a lack of differentiation. This has placed Yankon in a "sandwich" dilemma—unable to dominate the high-end market through technological innovation and brand premium like Signify, while also struggling to compete with low-cost Southeast Asian manufacturers. Its dependence on bulk orders from large European and American retail chains or wholesalers has made it vulnerable to major clients gaining greater bargaining power, squeezing profit margins. Furthermore, geopolitical risks and supply chain disruptions pose additional threats to its business stability.

Missed Opportunities in High-Value and Niche Markets​

Yankon Lighting has not fully capitalized on high-value and niche market opportunities, further weakening its international competitiveness. The global lighting industry is evolving beyond basic functional lighting to scene-based, health-focused, smart, and cross-industry solutions. Sectors like automotive lighting, medical lighting, horticultural lighting, hazardous location lighting, boat and marine lighting, aircraft lighting, and cultural tourism lighting are experiencing strong growth. However, Yankon continues to prioritize mass production of standardized products without investing in dedicated R&D teams or customized service systems for niche markets. This "broad but shallow" approach has led to weak positioning in emerging high-margin segments. For example, in smart lighting and human-centric lighting, Yankon lacks technological collaboration with IoT platforms. Additionally, its reluctance to engage with smaller initial orders results in missed opportunities to validate market demand and develop strategic partnerships. The company’s short-term, volume-driven customer management strategy hinders its ability to build a long-term ecosystem in high-growth niche markets.

Challenges in Foreign Trade Operations and Market Expansion​

Yankon Lighting's foreign trade team has amplified these challenges due to its reliance on existing large customers, leading to a passive, order-taking mentality and a decline in proactive market expansion capabilities. Sales personnel often rely on traditional digital marketing methods, responding mechanically to inquiries without leveraging social media for lead generation or using content marketing to establish a strong brand image. This passive approach is rooted in both incentive structure flaws and skill gaps—performance evaluations focus excessively on short-term transaction volume while neglecting customer lifecycle value management. Team training still emphasizes traditional trade processes, with insufficient focus on data-driven product selection and cross-border brand promotion.

A particularly short-sighted strategy is the neglect of "small and scattered" customers. Many niche market leaders start with micro-scale demand, and early-stage collaborations based on trust can later develop into significant competitive advantages as markets and technologies evolve. Without restructuring its team’s mindset and capability framework, Yankon risks falling into a cycle of "over-reliance on major clients" and "low-profit margins," ultimately leaving it vulnerable to more agile and market-savvy competitors.