LED Lighting Market Size, Share & Trends Analysis Report By End Use (Residential, Commercial, Industrial, Others), By Product (Lamps, Luminaires), By Application (Indoor, Outdoor), And Segment Forecasts, 2020 - 2027

Report Overview

The global LED lighting market size was valued at USD 54.00 billion in 2019 and is projected to expand at a compound annual growth rate (CAGR) of 13.4% from 2020 to 2027. 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 the 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 efficiencies, 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 the 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 the U.S. and several European nations with a rising focus on strategies to lessen peak power demand and overall energy consumption.

The COVID-19 pandemic has hit the LED lighting market severely by disrupting the supply chain, delaying the manufacturing, and affecting the lighting industry. The construction industry has also witnessed a decline, which has led to a slump in demand for lighting products. While countries such as Australia did not halt the construction, the projects were closed for a considerable period across the U.S., India, and many European countries. Also, the slowdown in retail, manufacturing, and other industries has led to a decline in the demand owing to the reduced budget for a new warehouse or commercial space. The adoption of LED lighting products would further be affected as the vendors are planning to increase the product prices.

Product Insights

The LED luminaires emerged as the largest segment and accounted for 56% share of the global revenue in 2019. Luminaires are widely used in commercial and industrial lighting segments. They are costlier than typical LED lamps; thus, luminaires account for a more significant market share than LED lamps. New installations predominantly drive growth. It includes lights used in streetlights, high bays, downlights, track lights, troffers, and suspended pendants for various applications. The luminaires deliver more light per output power and 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 lights 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. However, given the current pandemic situation, the international lighting events for promoting the products are either canceled or postponed due to COVID-19, online conferences can still serve the purpose of the current pandemic.

The LED lamps segment is anticipated to expand at the fastest CAGR of 14.5 % 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 led the market and accounted for more than 52% share of the global revenue in 2019. The demand for LED troffers, downlights are driving the 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 are anticipated to witness high demand in the industrial lighting segment. These lights must comply with industrial lighting standards and regulations defined by various governments. For instance, in the U.S., the 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. Given the pandemic conditions and with prominent brands increasing the product prices, the demand is expected to slump in near future.

Application Insights

The indoor segment dominated the market and accounted for over a 69% share of global revenue in 2019. 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 have 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.

Regional Insights

The Asia Pacific dominated the market and accounted for over 42% share of global revenue in 2019 and is likely to continue the dominance in terms of both usage and manufacturing over the forecast period. Taiwan, India, 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. Asia Pacific has some of the developing countries such as China, India, and Indonesia, which have a robust construction industry contributing to the growing demand for indoor and outdoor LED lightings. As the construction activity is interrupted due to pandemic, the delay in construction projects would negatively impact the demand and affect the vendor performance during the year 2020.

A strong dollar policy is likely to help the 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.

Key Companies & Market Share Insights

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 players. 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.

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. Moreover, the COVID-19 pandemic distorted the supply of electronic components and is expected to impact the company revenue growth for FY 2020. Companies are reducing their expenses by reducing the number of employees while partially starting the production at their facilities by the second quarter of 2020. Some prominent players in the LED lighting market include:

• Acuity Brands Lighting Inc.

• Cree Inc. (IDEAL INDUSTRIES INC.)

• Dialight

• Digital Lumens Inc.

• GE Current

• Hubbell

• LSI Industries Inc.

• LumiGrow

• Panasonic Corporation

• Siteco GmbH

• Signify Holding

• Semiconductor Co. Ltd. (Seoul Semiconductor)

• Zumtobel Group Ag

LED Lighting Market 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 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global LED lighting market report on the basis of product, application, end-use, and region:

• Product Outlook (Revenue, USD Billion, 2016 - 2027)

  • Lamps

    • A-Lamps

    • T-Lamps

    • Others

  • Luminaires

    • Streetlights

    • Downlights

    • Troffers

    • Others

• Application Outlook (Revenue, USD Billion, 2016 - 2027)

  • Indoor

  • Outdoor

• End-use Outlook (Revenue, USD Billion, 2016 - 2027)

  • Commercial

  • Residential

  • Industrial

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2027)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)