LED Lighting Market Size, Share & Trends, Market Research and Industry Forecast Report, 2020-2027 (Includes Business Impact of COVID-19)

                                          
Industry Insights, Market Size, CAGR, High-Level Analysis: LED Lighting Market


The global LED lighting market size was valued at USD 54.00 billion in 2019 and is projected to expand at a CAGR of 10.8% over the forecast period. Growing stringency of regulations in terms of inefficient lighting technologies and rising government efforts toward sustainable development are the key growth drivers. An aggressive decline in the prices of Light-Emitting Diode (LED), coupled with the transformation in energy policies across the world, has been driving the market growth. Moreover, attractive incentives and rebates provided by the governments for the use of LED lighting in several countries will leverage the demand.

LEDs are highly efficient, reliable, and they yield a longer life span, which is anticipated to boost their application in both indoor and outdoor settings. These lights are cost-effective compared to incandescent lights, delivering around 50,000 hours of illumination with a small amount of energy consumed. Their lower cost of operation and reduced heat losses also make them a suitable replacement for incandescent lights. Technological advancements shift from conventional to green lighting, enhanced energy efficiency standards, and declining prices have also spurred the product demand.

In addition, strict regulatory policies regarding conventional lighting and energy consumption across U.S., European Union, China, and Canada are anticipated to favor the product demand in the forthcoming years. Corresponding ratings and design standards categorizing energy efficiency, such as CASBEE in Japan, BREEAM in EU, and standards for green construction in China, are projected to bode well for the light emitting diode lighting market growth. Moreover, in U.S. all LED lighting products must meet regulations including Energy Star Program, United Nations Environment Programme (UNEP), and National Electric Code (NEC).

Governments offer incentives and rebates on replacement of traditional lamps with LED products, and this enables to improve adoption of LED products worldwide. Smart illuminations are also anticipated to offer lucrative opportunities for application in industrial and commercial areas. They have the capability to adjust light using control zones. Smart city schemes have become predominant in U.S. and several European nations with rising focus on strategies to lessen peak power demand and overall energy consumption.

Product Insights of LED Lighting Market

Based on the product, the LED lighting market has been bifurcated into lamps and luminaires. LED luminaires emerged as the largest segment in 2019. Luminaires are widely used in commercial and industrial lighting segments. They are costlier than typical LED lamps; thus, luminaires account for more significant market share than LED lamps. New installations predominantly drive the market for LED luminaires. It includes lights used in streetlights, high bays, downlights, track lights, troffers, and suspended pendants for various applications. LED luminaires deliver more light per output power. They are easier to control and permit optic designers to use them more proficiently and use less light to illuminate the same area. According to the National Electrical Manufacturers Association (NEMA), LED lighting constituted approximately 23% of the overall lighting market in 2017. The U.S Environment Protection Agency (EPA) predicts that LED will be the dominating light bulb technology in the upcoming years provided the awareness and promotion of LED bulbs remain strong by manufacturers, distributors, and retailers.

The LED lamps segment is anticipated to expand at the fastest CAGR of 11.8 % over the forecast period, owing to increasing adoption in developing countries. These lamps have various advantages over incandescent ones, including robustness, energy efficiency, and right temporal stability. Moreover, they are available in multiple designs and applications, such as T-Lamps, reflectors, A-Lamps, and MR-16 lamps. In European countries, the expected to decline in prices is anticipated to create growth opportunities for the segment over the Compact Florescent Lamps (CFLs). This factor is anticipated to speed up the shift from CFLs to light-emitting diodes. In addition, accentuated regulation roadmaps to phase out incompetent lightbulbs shall contribute to demand in residential and commercial applications.

End-use Insights

The commercial segment emerged as one of the leading segments in 2019. The demand for LED troffers, downlights is driving growth of the commercial segment. The high-end commercial lighting market mainly includes galleries, museums, and other exhibition lighting applications that primarily use reflectors, projectors, and downlights. High brightness LED lights is anticipated to witness a high demand from the industrial lighting segment. These lights must comply with industrial lighting standards and regulations defined by various governments. For instance, in the U.S. Occupational Safety and Health Administration (OSHA) has announced a standard for illumination in offices and commercial spaces.

The residential application consists of portable plug-in fixtures such as table lamps, pendants, and floor lamps as well as permanently installed fixtures such as under recessed sconces and cabinet lights. The residential lighting segment has witnessed high growth in the last few years as the adoption of LED A-type lamps has grown exponentially owing to lowered product prices and subsidy programs by various governments and agencies. Price is a decisive factor driving the demand from residential the segment.

Application Insights of LED Lighting Market

The market is classified into indoor and outdoor lighting, based on application. The indoor segment was valued at over USD 37.31 billion in 2019 and is expected to witness stable growth throughout the forecast period. Usage of LED lights in offices, retail stores and malls, hospitals, education buildings, and others has witnessed significant growth over the past few years. High adoption of LEDs as an alternative to fluorescent, High-intensity discharge (HID), and incandescent lamps has paved the way for indoor light-emitting diode lighting on a large scale.

Outdoor applications include airports, corporate campuses, industrial, government, and healthcare infrastructure, highways and roadways, and public places such as signage and traffic signals. Demand can be profoundly affected by public policy interventions and municipality support. Government initiatives, such as the LightSavers program undertaken by The Climate Group are expected to trigger the substitution of traditional lighting solutions. Rising demand for high resolution 10 mm billboards and signs, which are exemplary for high-volume pedestrian traffic zones, and customizable content are anticipated to revolutionize the outdoor display industry over the coming years.
Outdoor light-emitting diodes can be classified into architectural, public places, and others. Architectural illumination emerged as the largest outdoor application in 2019. The segment has been an early adopter of LED lighting wherein the product is widely used in various applications, such as exterior commercial wall lights, ground recessed lights, lamp posts, and architectural exterior floodlights.

Regional Insights of LED Lighting Market

Asia Pacific accounted for the largest market share of 41.8% in 2019 and is likely to continue the dominance in terms of both usage and manufacturing over the forecast period. Taiwan, Japan, and China are the key contributors to regional growth owing to initiatives undertaken by the respective governments for embracing light-emitting diodes coupled with the existence of a large number of market players.

The debt crisis in Europe adversely impacted demand for LED since their production requires enormous capital investments. In recent times, Europe and North America have witnessed a boom owing to government support and growing usage of ultra-modern lighting in several industries. The trade war between U.S. and China has caused a rise in import duties and eventually overall prices of the product. This factor is expected to prove beneficial for the European manufacturers. Significantly increased priority for these manufacturers over American manufacturers, by the Chinese suppliers is expected to fuel the regional growth.

A strong dollar policy is likely to help U.S. become a significant growth driver for the overall demand for LED lighting. The country has also been a strong advocate of light-emitting diode lighting with announcements of new policies and guidelines regarding the use of light-emitting diode technology, investments in R&D of energy-efficient lighting solutions, expanded use in commercial, industrial, and residential applications, and participated in public-private partnerships to boost local markets. This factor is expected to boost the growth of the regional market in the forthcoming years.

Market Share Insights of LED Lighting Market

The market is highly competitive and concentrated, with the top five companies accounting for the majority revenue share in 2019. Signify Holding; Cree, Inc.; Osram GmbH; Digital Lumens Inc.; and Acuity Brands are some of the dominant market player. New product developments, improvements in the existing product line, and mergers and acquisitions are some of the strategies adopted by the key players to maintain their market share. The practice of forward-integration is trending in the market with semiconductor manufacturers trying to establish themselves as lighting manufacturers.

However, the light manufacturers are looking forward to more significant opportunities through direct selling and building their distribution network, as it is highly essential to achieve economies of scale for improving profitability. The number of assembly units is much higher as compared to core manufacturers; these companies import low-cost components from Chinese suppliers and assemble them at their facilities to gain higher profit. However, in recent years, the stringent compliance regulation has enforced these companies to forbid them from procuring generic components from the Chinese suppliers, as they need to adhere to energy labels.

Segmentations, Sub Segmentations, CAGR, & High-Level Analysis overview of LED Lighting Market Research Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2019 to 2030. For the purpose of this study, this market research report has segmented the global LED lighting market report on the basis of product, application, end use, and region:

Product Outlook (Revenue, USD Billion, 2019 - 2030)

  
Lamps
  
A-Lamps
  
T-Lamps
  
Others
  
Luminaires
  
Streetlights
  
Downlights
  
Troffers
  
Others

Application Outlook (Revenue, USD Billion, 2019 - 2030)

  
Indoor
  
Outdoor

End use Outlook (Revenue, USD Billion, 2019 - 2030)

  
Commercial
  
Residential
  
Industrial
  
Others