Case Study on Business Model Innovation: How Hardoll Lighting Explored New Markets through Subscription Service Model

In recent years, the global lighting industry has undergone profound changes - shifting from traditional hardware sales to an integrated solution of 'products + services + data'. Against this backdrop, Chinese intelligent lighting technology enterprise Hardoll Lighting Technology Co., Ltd. (hereinafter referred to as Hardoll Lighting) took the lead in launching the 'Light-as-a-Service' (LaaS, lighting as a service) subscription model in the domestic commercial lighting sector in 2023. It became the first local brand in the industry to successfully implement this model on a large scale, attracting widespread attention from the industry. 
Unlike the traditional one-time purchase method of lighting fixtures, Hardoll Lighting's subscription service covers all-round services throughout the entire cycle, including LED smart lighting fixtures, IoT cloud platform management, AI energy efficiency optimization algorithms, 7×24-hour remote operation and maintenance, and on-demand upgrades. Customers pay a fixed monthly or annual fee to obtain the full usage rights of the lighting system and continuous technical support. They do not have to bear the high upfront equipment investment or the subsequent maintenance costs. Currently, this model has been successfully applied to over 30 benchmark projects, including Shenzhen Bay Technology Ecological Park, Hangzhou Xixi Wetland Smart Park, and several chain office spaces in Suzhou Industrial Park. On average, it helps customers reduce lighting energy consumption by 38% and improves the response time for maintenance to within 15 minutes. 
This innovation does not merely convert sales into leasing. Instead, it is based on the service platform built by Hardoll using its self-developed H-Link edge computing gateway and LightOS cloud operating system. The system can collect real-time data such as light intensity, human movement patterns, and equipment status, dynamically adjust color temperature and brightness, and generate energy efficiency reports and carbon footprint analyses, helping customers achieve ESG goals. The company has also established a 'subscription credit assessment model', and in collaboration with third-party credit assessment institutions, has provided light entry service solutions for small and medium-sized commercial customers, further expanding the market coverage boundaries. 
According to Li Zhe, the CEO of Hardoll Lighting, in his keynote speech at the 2024 Shanghai International Lighting Exhibition, the subscription business now accounts for 41% of its commercial revenue, with a repeat purchase rate of 92%. At the same time, it has driven a 217% increase in the company's software service revenue and raised the overall gross profit margin by 6.3 percentage points. Industry experts pointed out that Hardoll Lighting is reconfiguring the value chain of the lighting industry through a three-step strategy of 'standardization of hardware, modularization of services, and assetization of data', providing a replicable practical model for China's manufacturing industry to shift from 'selling products' to 'selling capabilities'. 
In the future, Hardoll Lighting plans to expand the LaaS model to educational, medical and urban public lighting scenarios, and will open the LightOS API interface. It will collaborate with ecosystem partners such as building automation and smart energy to jointly build a SaaS service matrix, continuously unleashing the growth potential of the subscription economy in the field of intelligent hardware.