led bulb adoption simulations (october 2014)
DESCRIPTION
Research objectives: understand LED lamps price sensitivity in key markets -Determine end-user price sensitivity to LED pricing -Understand consumer attitudes toward LED brands -Identify competitive differentiation based on brand? - Assess the end-user value of LED features such as lifetime, wireless controlability & dimmingTRANSCRIPT
LED Bulbs Adoption Simulations Based on B2C Conjoint analysis in Germany, China and the US
October 2014
www.gemseek.com
Table of contents
Research objectives & survey set-up
Q: Which brands of light bulbs do you usually purchase for your home?
Global findings
Germany
China
United States
Appendix
www.gemseek.com
Research objectives: understand LED lamps price
sensitivity in key markets
Determine end-user price sensitivity to LED pricing
Understand consumer attitudes toward LED brands
Identify competitive differentiation based on brand?
Assess the end-user value of LED features such as lifetime,
wireless controlability & dimming
Research consumer purchase behavior
Determine most often-used bulb brands
Measure customer loyalty across brands
Analyze differences across key demographics
Non-conjoint research
Conjoint research
www.gemseek.com
Survey set-up: Choice-based conjoint analysis to
simulate real-life market options
Price
LED lifetime
Dimming Product attributes
Wireless control
Brand
Respondents are asked to choose between a number of available options on the
screen with varying product attributes
Based on their choice, the importance of each attribute can be measured
Using the derived importance, what-if scenarios are simulated to understand how the
market will react to price shifts
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Survey set-up: Multiple levels are tested for each
attribute in order to construct demand curves
Price
Dimming
Wireless control
LED Lifetime
Bulb types
Yes
No
30,000 hrs
20,000 hrs
10,000 hrs
€30
€5
$20
$4
150 CNY
22 CNY
… … …
Brands Top brands
Incandescent
Halogen
LED Compact Fluo
Sample size: 200 respondents per country
www.gemseek.com
Survey set-up: Partnership between GemSeek and
Lightspeed GMI
GemSeek is a global research & consulting firm with a specialized practice in the lighting
industry
We have teamed-up with Lightspeed GMI –an award-winning global digital data collection
enterprise with more than four million online research respondents in 40+ countries.
GemSeek took responsibility for questionnaire design, project scope definitions, market
simulations
Lightspeed GMI carried out survey programming, data collection fieldwork, data processing &
quality control, translations
Sample: 200 respondents per country; the sample was spread across gender, age and
region
Metropolitan areas, Tier 1 and Tier 2 cities in China covered.
Market simulations run in Sawtooth Software environment.
www.gemseek.com
Table of contents
Research objectives & survey set-up
Global findings
Germany
China
United States
Appendix
www.gemseek.com
Product attributes
Price
Lifetime
Brand
Wireless / dimming
10-15%
price is a determining
attribute
the brand matters
10-15% of consumers
shop online for bulbs
Top tier brands can
command a 15% price
premium
€15
¥45
$7
50%
adoption @
Key findings: A dynamic market…
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… where pricing drives adoption…
Research findings
LED Bulbs penetration
Key conjoint simulation assumptions
CFLi & Halogen prices don’t change significantly
LED lamp lifetime: 30,000 hrs
LED wireless controlability: No
LED energy savings: 85%
% LED adoption
LED RSP
60W equivalent products
78%76%65%
57%50%
42%34%30%25%
10%10%20%
27%33%
39%47%51%55%
12%13%15%17%17%18%19%19%19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
€ 13 € 10 € 5 € 7 € 15 € 17 € 20 € 25 € 30
LED
CFLi
Halogen
77%76%72%68%
45%32%
23%21%18%
17%17%21%25%
47%60%
69%72%74%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% 5% 5%
¥50 ¥22 ¥31 ¥125 ¥70 ¥35 ¥100
5% 5% 5%
¥150 ¥27
5%
3% 3% 3% 2% 3% 3% 3% 2% 2%
5% 5% 5% Halogen
CFLi
LED
GLS
54%53%45%
38%33%28%27%26%25%
21%22%30%
36%40%44%45%46%47%
25%25%25%27%27%28%28%27%28%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$20 $8 $6 $4 $13 $12 $10 $15 $17
Halogen
CFL
LED
LED RSP
LED RSP
Dimming: No
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… but product lifetime & brands matter as well…
Research findings
LED bulb attribute importance
5%
7%
20%
21%
48%
0% 10% 20% 30% 40% 50%
Wireless control
Dimming
Brand
Lifetime
LED price
6%
10%
28%
18%
39%
0% 10% 20% 30% 40% 50%
5%
8%
22%
17%
47%
0% 10% 20% 30% 40% 50%
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… thus allowing Top Tier brands to command a price
premium in all three studied markets
Research findings
Gap in adoption between Tier 1 and Tier 2 brands, pp
Key conjoint simulation assumptions
LED lamp lifetime: 30,000 hrs
LED wireless controlability: No
LED energy savings: 85%
60W equivalent products
4
77776
0
5
10
15
20
25
30
$10 $13 $7 $20 $17 $4 LED RSP
566
101111
0
5
10
15
20
25
30
€ 30 € 20 € 25 € 5 € 10 € 15
LED RSP
5555
12
20
0
5
10
15
20
25
30
¥50 ¥35 ¥70 ¥100 ¥125 ¥150 LED RSP
Dimming: No
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Fragmented market with a few leading players,
where…
Research findings
Competitive usage share
Philips
Osram
IKEA
32%
20%
9%
28% Others
Opple
Philips
NVC
19%
17%
9%
44% Others
Philips
GE
Osram-Sylvania
32%
17%
5%
45% Others
Q: Which brands of light bulbs do you usually purchase for your home?
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…Top Tier brands enjoy sufficient customer loyalty
(NPS*)
Research findings
NET Promoter Score
Philips 22% 48% 30%
Osram 21% 45% 34%
IKEA 28% 53% 19%
Promoters Passives Detractors
13%
9%
-9%
NPS
16% 49% 36%
Opple 19% 46% 35%
GE
14% 32% 55%
NVC 16% 47% 38%
Osram 10% 47% 43%
Philips 41%
33%
22%
20%
17%
NPS
43%
24% 43% 33%
Philips 16% 41%
GE
22% 22% Osram-Sylvania 56%
28%
10%
0%*
NPS
* Low base
**Q: Based on your experience with your light bulbs, how likely are you to recommend the brand to a friend, relative or colleague on a 1-10
scale? 1-6 = Detractors; 7-8 Passives; 9-10 Promoters. NPS = % Promoters - % Detractors.
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Sales channels vary across countries
Research findings
Q: Where do you usually purchase your light bulbs from?
Others 1%
Electrician 2%
Home accessory store 2%
Consumer electronics store 3%
Lighting specialist 5%
Furniture store 7%
Hypermarket 8%
Consumer electronics chain 8%
Department store 9%
Online 12%
Supermarket 15%
DIY 28%
3%
14%
15%
11%
13%
13%
1%
12%
0%
0%
7%
10%
11%
11%
10%
9%
1%
4%
4%
7%
1%
18%
7%
19%
Sales channels
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Current product experience remains the key source of
information for bulbs customers
Research findings
Q: Which of the following information sources did you use to help you decide what type of light bulb to buy?
Online reviews 5%
Store personnel 6%
Product comparison websites 6%
Friends or family 9%
On-shelf information 10%
Current product experience 29%
5%
Other
3%
Electrician
Manufacturer websites 4%
Product guides 4%
Online marketplace
Newspaper
4%
14%
11%
4%
8%
10%
4%
18%
6%
1%
4%
5%
5%
23%
4%
4%
6%
9%
9%
25%
3%
3%
4%
5%
2%
26%
Information channels
www.gemseek.com
Table of contents
Research objectives & survey set-up
Q: Which brands of light bulbs do you usually purchase for your home?
Global findings
Germany
China
United States
Appendix
www.gemseek.com
Osram and Philips dominate the consumer bulbs
market; LED player have already made inroads
Research findings
Competitive usage share
Philips
Osram
IKEA
32%
20%
9%
9%
4%
4%
3%
3%
2%
2%
1%
Sylvania
Competitor X
Competitor X
Competitor X
Competitor X
Competitor X
Competitor X
Competitor X
Q: Which brands of light bulbs do you usually purchase for your home?
Sylvania
Competitor X
21% 45% 34%
22%
IKEA
Philips
Osram
48% 30%
28% 53% 19%
32% 39% 29%
Competitor X
Competitor X
Competitor X
Competitor X
Competitor X
Competitor X
NET Promoter Score
Promoters Detractors Passives
13%
9%
-9%
-3%
NPS
Q: Based on your experience with your light bulbs, how likely are you to
recommend the brand to a friend, relative or colleague?
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Online is the third most common sales channel already;
current product experience drives bulb type choice
Research findings
Place of purchase
Q: Where do you usually purchase your light bulbs from?
Bulb type choice sources
Q: Which of the following information sources did you use to help you
decide what type of light bulb to buy?
Furniture store
2%
28%
7%
8%
Department store
5%
3%
Online
1%
DIY
15% Supermarket
12%
2%
Consumer electronics chain
Home accessory store
Lighting specialist
8%
Electrician
Consumer electronics store
9%
Hypermarket
Others
Online reviews 5%
Store personnel 6%
Product comparison websites 6%
Friends or family 9%
On-shelf information 10%
Current product experience 29%
5%
Other
3%
Electrician
Manufacturer websites 4%
Product guides 4%
Online marketplace
Newspaper
4%
14%
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LED bulbs to reach 50% penetration at €15 RSP for a 60W
equivalent; lifetime loses importance as prices drop
Research findings
LED Bulbs penetration LED Bulbs penetration
Key conjoint simulation assumptions
CFLi & Halogen prices don’t change significantly
LED lamp lifetime: 30,000 hrs
LED wireless controlability: No
LED energy savings: 85%
0
10
20
30
40
50
60
70
80
€ 5
78%
79%
€ 7
76%
75%
€ 10
65%
58%
€ 13
57%
45%
€ 15
50%
40%
€ 17
42%
35%
€ 20
34%
26%
€ 25
30%
23%
€ 30
25%
20%
LED 30,000
LED 10,000
% LED adoption % LED adoption
Key conjoint simulation assumptions
CFLi & Halogen prices don’t change significantly
LED lamp lifetime: 10,000 hrs & 30,000 h
LED wireless controlability: No
LED energy savings: 85% 60W equivalent products 60W equivalent products
78%76%64%
57%49%
42%33%29%24%
10%11%
20%26%
33%40%
48%52%56%
11%13%15%17%18%18%19%19%20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
€ 5 € 7 € 10 € 13 € 15 € 17 € 20 € 25 € 30
LED
Halogen
CFLi
Dimming: No Dimming: No
LED RSP,
Uneven scale
LED RSP,
Uneven scale
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LED RSP,
Uneven scale
Dimming & wireless controlability have no impact on LED
adoption
Research findings
LED Bulbs penetration LED Bulbs penetration
Key conjoint simulation assumptions
CFLi & Halogen prices don’t change significantly
LED lamp lifetime: 30,000 hrs
LED wireless control: Yes vs. No
LED energy savings: 85%
% LED adoption % LED adoption
Key conjoint simulation assumptions
CFLi & Halogen prices don’t change significantly
LED lamp lifetime: 30,000 h
LED wireless controlability: No
LED energy savings: 85% 60W equivalent products 60W equivalent products
0
10
20
30
40
50
60
70
80
€ 5
78%
79%
€ 7
76%
57%
€ 15
50%
50%
€ 17
42%
30%
€ 30
25%
76%
€ 10
65%
65%
€ 13
57%
42%
€ 20
34%
35%
€ 25
30% 26%
LED with dimming
LED no dimming
0
10
20
30
40
50
60
70
8078%
78%
€ 7
76%
76%
€ 10
65%
64%
€ 13
57%
57%
€ 15 € 5
50%
49%
€ 17
42%
42%
€ 20
34%
33%
€ 25
30%
29%
€ 30
25%
24%
LED with wireless
LED no wireless
Dimming: Yes vs. No Dimming: No
LED RSP,
Uneven scale
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Customers willing to pay more for familiar brands; brand
differentiation is low for Tier 2 players
Research findings
Q: Where do you usually purchase your light bulbs from?
LED Bulbs penetration, key players
0
5
10
15
20
25
30
35
40
45
50
€ 15 € 17 € 20 € 25 € 30 € 5 € 7 € 10 € 13
I wouldn’t buy a LED bulb
Philips
Osram
LED Bulbs penetration, emerging players
Key conjoint simulation assumptions
LED lamp lifetime: 30,000 hrs
LED wireless controlability: No
LED energy savings: 85%
0
5
10
15
20
25
30
35
40
45
50
€ 25 € 17 € 5 € 20 € 7 € 13 € 15 € 10 € 30
Toshiba
IKEA
Samsung
I wouldn’t buy a LED bulb
% LED adoption % LED adoption
60W equivalent products
LED RSP,
Uneven scale
LED RSP,
Uneven scale
Dimming: No
www.gemseek.com
Table of contents
Research objectives & survey set-up
Q: Which brands of light bulbs do you usually purchase for your home?
Global findings
Germany
China
United States
Appendix
www.gemseek.com
Additional information
GemSeek is a global research & consulting firm with a specialized practice in the lighting and building
industry.
We have years of experience conducting B2B and B2C research projects in the lighting domain, including
customer loyalty research, brand analytics, pricing research, market forecasting and competitive
analytics.
The goal of this project is to understand how LED bulb attributes (price, brand, lifetime, wireless controls)
impact consumer adoption and model future LED penetration scenarios.
This research will provide lighting companies with answers to tough questions:
- What drives LED adoption?
- When will LED bulbs reach 50% adoption?
- Will there still be a market for CFLi lamps as LED prices drop?
- Does your brand allow you to command a LED price premium over competitors?
- What will happen if you decrease the LED lifetime to 10,000 hours?
www.gemseek.com
For further contacts
Veselin Petkov I Consultant
+359.2.439.1085
Petko Tinchev I Managing Director
+359.2.439.1085