LED Lighting Market Size, Share & Trends Analysis Report By End Use (Residential, Commercial, Industrial, Others), By Design (Lamps, Luminaires), By Application (Indoor, Outdoor), And Segment Forecasts, 2019 - 2025

Industry Insights

The global LED lighting market size was valued at USD 45.57 billion in 2018 and is projected to expand at a CAGR of 11.8% over the forecast period. Increasing demand for power-efficient illuminating systems across residential, commercial, and industrial sectors, rising concern over reduction of non-renewable sources of power, and decreasing price of Light Emitting Diodes (LED) lights are likely to propel the growth.

LEDs are highly efficient, reliable, and they yield 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 makes 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 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 through 2025. 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 market growth in near future.

Governments are offering incentives and rebates on replacement of traditional lamps with LED products, 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 consumption of energy.

Design Insights

Based on design type, the LED lighting market has been bifurcated into lamps and luminaires. LED luminaires emerged as the largest segment in 2018. Luminaires are widely used in commercial and industrial lighting segment, they are costlier than typical LED lamps; thus, luminaires account for greater market share as compared to LED lamps. The market for LED luminaires is predominantly driven by new installations. 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 Department of Energy (DOE), an anticipated 180 million lamps were activated in outdoor stationary lighting installations in 2010. In 2014, a DOE survey found that around 10% of the overall outdoor installations comprised LED solutions.

The LED lamps is anticipated to expand at a high CAGR over the forecast period, owing to increasing adoption in developing countries. These lamps have various advantages over incandescent ones, including robustness, energy efficiency, and good temporal stability. Moreover, they are available in various designs and applications such as T-Lamps, reflectors, A-Lamps, and MR-16 lamps. In European countries, price of LED lamps is anticipated to compete with compact florescent lamps by 2018, which shall further speed up the shift from CFLs to light emitting diodes. In addition, accentuated regulation roadmaps to phase out incompetent lightbulbs shall contribute to demand for light emitting diode lamps in residential as well as commercial applications.

End Use Insights

The commercial segment emerged as one of the top-grossing LED lighting segment in 2018. The demand for LED troffers, downlights is driving growth of commercial LED lighting. High brightness LED lights have a high demand from the industrial lighting segment. These lightings must comply with industrial lighting standards and regulations defined by various governments.

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 cabinet lights and recessed sconces. It also includes guest houses/bed-and-breakfast accommodation and small-scale home office lightings that are analogous in structure to residential houses.

Application Insights

The market is classified on the basis of application into indoor and outdoor lighting. The indoor segment was valued at over USD 31.70 billion in 2018 and is expected to witness stable growth throughout the forecast period. The segment is further classified into residential, commercial, industrial, and others. The commercial sub-segment accounted for the largest market share in 2018. Usage of LED lights in offices, retail stores and malls, hospitals, education buildings, and others has risen significantly over the past few years. High adoption of LEDs as an alternative to florescent, HID, and incandescent lightings 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 highly affected by public policy interventions and municipality support. Government initiatives such as 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 segment. The segment has been an early adopter of LED lightings and is widely used in various applications such as exterior commercial wall lights, ground recessed lights, lamp posts, and architectural exterior floodlights.

Regional Insights

Asia Pacific accounts for the largest market share of 41.3% in 2018 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 couple with existence of a large number of market players.

The debt crisis in Europe adversely impacted demand for LED since their production requires vast capital investments. In recent times, Europe and North America markets have witnessed a boom owing to government support and growing usage of ultra-modern lighting in several industries. Furthermore, from the Chinese supplier’s side the European manufacturers are getting priority over American manufacturers owing to increasing trade-war between U.S. and China which led to sanction of tariffs that caused increase in import duties and eventually overall product price.

Strong dollar policy is likely to help U.S. become a major growth driver for overall demand for LED illumination. The country has also been a strong advocate of light emitting diode lighting. In recent years, U.S. has announced new policies and guidelines regarding the use of light emitting diode technology, invested in R&D of energy-efficient lighting solutions, expanded use in commercial, industrial, and residential applications, and participated in public-private partnerships to boost localmarkets.

LED Lighting Market Share Insights

Key contributors to the market include Signify Holding; Cree, Inc.; Osram GmbH; Digital Lumens Inc.; General Electric; Dialight; and Eaton among others. These players focus on improving technology, developing cost-effective products, and enhancing performance. Product optimization, technology innovation, and product development are crucial for industry participants to maintain a competitive edge.

The practice of forward-integration is trending in the market, and semiconductor manufacturers are trying to establish themselves as lighting manufacturers. However, the light manufacturers are looking forward to greater opportunities through direct selling & establishing 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.

Report Scope

Segments Covered in the 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 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global LED lighting market report on the basis of design, application, end use, and region:

• Design Outlook (Revenue, USD Billion, 2015 - 2025)

  • Lamps

    • A-Lamps

    • T-Lamps

    • Others

  • Luminaires

    • Streetlights

    • Downlights

    • Troffers

    • Others

• Application Outlook (Revenue, USD Billion, 2015 - 2025)

  • Indoor

  • Outdoor

• End use Outlook (Revenue, USD Billion, 2015 - 2025)

  • Commercial

  • Residential

  • Industrial

  • Others

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa