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Being Newcomer Works in Favor of Tsannkuen in LED Lighting

Another advantage is knowing consumer needs exactly based on decades of retail

2012/05/23 | By

In Tsannkuen (Shzng Zhou) Enterprise Co., Ltd.'s booth at the Hong Kong International Lighting Fair (Spring Edition) 2012, staged Apr. 6-9, Panco Pan, general manager, introduced its line of proprietary LED lights: “These lights feature simple, slim design to maximize roominess in any living space.”

Tsannkuen displays feature-laden LED lamps at 2012 Hong Kong International Lighting Fair (Spring Edition)
Tsannkuen displays feature-laden LED lamps at 2012 Hong Kong International Lighting Fair (Spring Edition)

Holding a dual-functional lamp weighing less than 200 grams and not much bigger than one's palm, Pan showed the item as a desk lamp and then retracted it into an emergency light, which works for five consecutive hours on battery power. Noting a well-known advantage of LEDs, Pan says that LED lamps can be flexibly designed due to the compactness of the emitters, a characteristic Tsannkuen taps fully to develop slim, versatile lighting that are minimally intrusive in any living space, says Pan.

The parent company, the Tsannkuen Electric Appliances Group, is a retailer of electrical appliances, so knows exactly consumer needs based on decades of customer service, Pan stresses.

“With a design team made up of specialists in industrial design, mechanical refinement, electronics, electromechanics and materials, our engineers put themselves in the shoes of consumers when designing new products, visualizing abstract concepts that are developed with computer-aided design programs and made into prototypes. Finally, designs are commercialized after verification,” says Pan.

The company diversified into LED lighting eight years ago. “The group's sustainable development people saw LED as an eco-friendly product and eco-friendly products would dominate the consumer market, which motivated the group to plunge into LED lighting,” says Pan, adding that the company's advantages in LED lighting include design strength the group has built, the group's well developed retail distribution network, and the cooperation between the LED lighting subsidiary and Taiwan's LED packaging industry.

Advantage of Newcomer
Tsannkuen was a newcomer in lighting, which allows designers to think outside the box. That's why the company can come up with unconventional designs, says Pan, who pulled out a compact LED flashlight from a table lamp, which also doubles as a decorative light and an emergency light, making it a multi-patented item. The company has won iF, reddot and Good Design awards for lighting design.

One must have competitive advantages in LED lighting manufacturing in terms of manufacturing scale, product standard and design. But in most cases design is decisive because consumers choose good design, Pan says. The company also achieves economy of scale with factories in China and high standards by using lamps with color rendering index (CRI) above 85. The higher the CRI the better colors of objects are seen under a lamp. Standard incandescent lamps have CRI of 100, with fluorescent lamps in the range of 52 to 95, depending on the lamp.

Coupled with the company's solid design capability, Taiwan's well developed LED industry provides the company with quality, cost effective LED devices. “We use Taiwan-made LED packages because Taiwan's LED industry is known for the world's highest defect-free rate and competitive cost, as well as partner with the best LED packagers in Taiwan, which is our formula to build competitive strength,” Pan says.

PANDORA lantern highlights Tsannkuen’s unconventional designs.
PANDORA lantern highlights Tsannkuen’s unconventional designs.

Top-rated in Japan
Trendy Magazine of Japan's Best Buy Survey rates Tsannkuen's Urbane-brand 7W light bulbs as the most popular replacements for incandescent bulbs due to high quality and affordability, outdoing equivalents from Sharp and Matsushita. “Trendy Magazine rates our products with the highest price/performance ratio of all competing products,” says Pan.

Uncertain if by foresight or fortuity, Japan is Tsannkuen's first overseas market mainly due to the nation's inherent shortcoming: general scarcity in natural energy resources. And demand for energy-saving products has escalated in Japan after the March 11, 2011 earthquake and tsunami, which crippled a nuclear power plant and energized national opposition to nuclear power, with data showing that Japan has become the world's biggest market for LED lamps.

In overseas markets, the company is seeking to partner with mega retailers to boost shipment volume that enables the company to better negotiate price with LED suppliers. “That's why we partner with retailer Yamada Denki in Japan,” Pan stresses. The company's lamps are available at over 80% of Japanese retailers, with Costco being one of the company's retail partners in Europe.

The company also builds brand with retail volume. Besides Urbane, Tsannkuen has Fora as its LED brand, which is mainly sold by Yamada Denki. “Brands cannot be built with money alone, one needs also high quality and low prices. Most of all, huge retail volume enables brands to be popular faster,” Pan says.

Pan says that the group is vigorously promoting LED lighting products, aiming to generate LED lighting sales equal that of its household appliance turnover in five years and double as much in 10 years. The group's online data shows it had total revenue of around US$976 million last year, of which 5% came from lighting operations.

Tsannkuen has a two-phase product scheme: roll out indoor lights before outdoor lights. Its indoor line is mainly composed of ceiling lights, recessed lights, floor lights, PAR lamps and projector lights for residences, offices and stores; while the outdoor line, scheduled for launch once its indoor business secures steady market share, will target commercial-lighting purposes. Such strategy is backed by introducing 60 new lamp designs a year.