© luchschen Analysis | July 14, 2014

Global lighting market expected to reach €110 billion by 2020

The lighting industry, particularly the Light-Emitting Diode (LED) segment is becoming an increasingly predominant business with steady market growth of 12.4% being realized year-on-year from 2010 through to 2013.
The thriving LED industry is fuelled by a combination of increasing light consumption, decreasing production costs and new application sources as well as regulatory activities.

The changing needs of the industry is a major driving force for LED lighting growth, which is anticipated to continue growing till 2020. Commercial lighting has been one of the fastest growing segments in the LED lighting market with several new application fields such as churches, museums, hotels and retailers requiring a cost effective and energy efficient lighting medium.

Moreover, research has supported that lighting plays a significant role in setting atmosphere and crafting consumer behavior decisions and attention. Certainly, the residential and industrial lighting segments closely follow behind, however features such as cost, performance, luminosity and lifespan are features that dictate the segments development. Additionally, good progress in the advancement and sale of LED converters and modules have been achieved which offsets the substantial decline in the demand for magnetic and electronic ballasts.

While the European market still leads in the LED sector, the emerging markets are vigorously pacing behind by annually increasing their market share proportion. China accounts for more than 20% of the world’s lighting market and has recorded a fast growth over the past years, particularly in terms of the uptake of LED lighting technologies. The ban of incandescent light bulbs particularly in the EU is a primary initiative to reduce national energy bills and combat global warming.

The electricity used over the lifetime of a single incandescent bulb costs 5 to 10 times the original purchase price of the bulb itself whereas replacing one incandescent light bulb with LED will save 70 kgs of carbon per year. Nevertheless, such an initiative can be viewed as technique to inflate the performance of the European LED market both from a producer and consumer perspective.

Aside from the LED market, the smart lighting market is estimated to be worth €41 billion by 2020, whereas in comparison the LED market is expected to be worth €31 billion by 2020. Clearly, other segments within the lighting industry along with the creation of new lighting technologies will reposition the segments thus allowing for M&A activity to be stimulated through market consolidation across geographies and product offerings as well as with fully integrated vertical business models.

The “International LED expo 2014” that took place in South Korea between 24th-27th June confirms the strengthening importance of LED lighting across all business segments with the primary focus of providing increasingly eco-friendly products.


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