Taiwan market LED lighting pricing strategies and global competition

As global efforts increase to become greener, LED lighting is becoming more pervasive around the world. It was originally estimated that by the end of 2012 mainstream LED light bulbs would be around US$10, but vendors in Taiwan decided not to wait that long in hope of being able to dominate the local market as well as react to increasing demand for energy saving products due to energy hikes that are about to take place. As of now, a LED fixture that can replace a 60 watt incandescent one in Taiwan costs NT$249-299 (US$8.29-9.95) and consumers are purchasing LED fixtures earlier than expected.
Once thought of as overpriced lighting, LED fixtures are now in high demand. Everlight's LED products can be found in 7-11 convenience stores all over Taiwan with 8 watt LED fixtures going for NT$299. Tsan Kuenn, a 3C retail chain that outsources LED lighting products to Unity Opto Technology (UOT), has an own LED product line with a 7.5 watt LED fixture equal to a 60 watt incandescent one going for NT$249. With these prices, LED lighting is becoming the new standard for lighting throughout homes in Taiwan.
According to Digitimes Research, a 40 watt incandescent equivalent LED fixture in South Korea was going for US$12 while a 60 watt one was going for about US$17 in April 2012.LED Work Area Light features hanging bracket mount.In order to compete in South Korea's market, international firms are offering competitive prices with Philips offering a 60 watt LED equivalent at 44.5% cheaper than its price in the US.In comparison, Taiwan's 60 watt equivalent is under US$10 with its 40 watt version priced at US$6.70, making Taiwan the number one nation in the world in terms of LED price drops. In May, Philips introduced its 60 watt LED equivalent to Taiwan's market with a price tag of NT$1,300 (US$43.5), which will pose a strong challenge for Philip's sales where other LED makers are offering much lower prices.
The ex-factory price now for one watt in a LED fixture is roughly US$1. That means LED vendors in Taiwan are hardly making any profits at the current retail price levels.Within the pricing layout in the LED market, price control is a strategy for Taiwan vendors. When the market is in the beginning stages of promotion, lowered costs to boost market share and using strategically made products to raise awareness for brands will indeed show successful sales results in the short term. But it is still up for question whether Everlight can use this strategy to be successful in markets in Europe and the US and overall become known more internationally.