LED Lighting Market Size, Share & COVID-19 Impact Analysis, By Product Type (Lamps and Luminaires), By Distribution Channel (Online and Offline), By Installation Type (New LED and Retrofit LED), By Application (Indoor and Outdoor), By End-user (Residential, Commercial, Industrial, and Others), and Regional Forecast, 2023-2030

The global LED lighting market size was valued at USD 78.24 billion in 2022 and the market is projected to grow from USD 87.10 billion in 2023 to USD 298.38 billion by 2030, exhibiting a CAGR of 19.2%. Asia Pacific dominated the global market with a share of 52.65% in 2022.

Light Emitting Diode (LED) is a solid-state light source that can convert electrical energy directly into light. These devices are often used in lamps to replace incandescent light sources. LED is one of the most energy-efficient and rapidly growing lighting technologies in the global market. These devices last longer, can operate efficiently, and give better light quality than traditional lighting technologies. However, LEDs may curtail the sales of conventional lighting technologies, such as Compact Fluorescent Lamp (CFL) and Cold Cathode Fluorescent Lamp (CCFL) due to their advanced features. They are a cost-effective solution for lighting and other applications, such as backlit widescreen and non-backlit Organic Light-Emitting Diode (OLED) displays.

However, even though LEDs help customers reduce their electricity bills, the initial cost of installing these devices is very high, which limits its acceptability. But since LEDs have a longer lifespan, their overall cost valued in accordance with initial price, serving lifespan, and power consumption was found to be very low as compared to CFLs. Consumers will realize the benefits of using LED lights and increase their usage. Growth in display backlight applications, reduction in the cost of LEDs, long lifespan, and high efficiency of these lights are the key factors that are expected to drive the LED lighting market growth.

COVID-19 IMPACT

Shut Down of Manufacturing Facilities and Disruptions in Supply Chains Negatively Impacted Market Growth

The Impact of the COVID-19 pandemic exited throughout international supply chain networks, casting a shadow on global economic activities. Despite these challenges, the worldwide market was poised for a moderate decline in 2020, followed by a positive growth. This projection was largely influenced by the temporary shutdown of light emitting diode manufacturing facilities in key regions including China, the United States, and European nations. This disruption in production posed significant obstacles to the global industrial supply chain dynamics. Similar to other industrial sectors, manufacturers of light emitting diodes were significantly reliant on Chinese enterprises as primary suppliers of essential raw materials. China, being at the pandemic's forefront, was the first to feel its economic impact, leading to the mandatory closure of production facilities.

However, the escalating adoption of energy-efficient illumination systems in emerging economies has driven a surge in the integration of light emitting diodes across commercial and residential landscapes encompassing smart residences, warehouses, retail outlets, and industrial complexes. Nations such as China, India, Saudi Arabia, Germany, and South Africa are notably experiencing substantial advancements in the deployment of light emitting diode lamps and luminaires, fostering the wider implementation of these lighting solutions. Furthermore, both governmental bodies and non-governmental organizations, including the Energy Conservation Society and the International Energy Conservation Corporation, have enacted various regulatory frameworks aimed at curbing electricity consumption while promoting energy preservation. These initiatives have been pivotal in propelling the global market forward.

LATEST TRENDS

Growing Use of Energy-efficient Lighting Solutions to Fuel Market Progress

The light emitting diode serves as an energy-efficient lighting solution poised to receive a favorable boost from the escalating adoption of environmentally friendly lighting alternatives. The prevailing global focus on energy preservation and efficiency has catalyzed the widespread integration of such systems, contributing significantly to the global mission of conserving energy resources. Numerous facility managers and company owners became more aware about energy conservation and established various organizational goals to reduce their energy consumption. In the pursuit of these aims, there has been a rapid and widespread implementation of LED systems across various establishments under the guidance of facility managers.

This transformative technology holds the potential to revolutionize the future of lighting, with residential LED bulbs, bearing the ENERGY STAR certification, consuming 75% less energy and boasting a 25% longer lifecycle compared to traditional incandescent lamps. The increasing adoption of LED lighting has the capacity to make substantial improvement in advancing energy conservation efforts, particularly within the U.S. The emergence of LED technology in developing countries, positioning it as the preferred choice for the majority of lighting systems and setting the stage for positive growth trends in the market. Additionally, the increasing utilization of building management systems in commercial structures is anticipated to further accelerate the growth of global market.

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LED LIGHTING MARKET GROWTH FACTORS

Highly Efficient Specification and Multiple Applications of LEDs to Drive Market Growth

Most of the emerging countries are shifting their focus toward energy conservation and eco-friendly lighting solutions. As part of this energy conservation agenda, many countries are actively installing light emitting diode systems on a large scale. Over the past decade, many customers have switched from CFL to light emitting diode bulbs. Lighting can incur up to 20% or 25% of overall energy costs, so shifting to LEDs can save money and reduce monthly energy bills. Also, light emitting diode lighting has various applications, such as backlight of switches of electronic devices and internal lighting of LED screens. LEDs are lightweight and can be easily fitted in various home decorations to enhance aesthetics. It is also used in the camera flash, signal lights, and aviation lights. Such benefits of light emitting diode lighting systems are expected to drive the global market.

RESTRAINING FACTORS

High Initial and Deployment Costs of LED Lighting System to Restrain Market Growth

In recent years, light emitting diode (LED) systems have experienced a substantial surge in their level of recognition. Nevertheless, the primary expense associated with purchasing a single unit of these systems surpasses that of the conventional CFL lighting systems currently available. The components that comprise these systems, including diodes, transmitters, and capacitors, involve considerable costs, thereby directly influencing the initial retail price of the complete system. Additionally, the substitution of current lighting systems with LED alternatives and the installation of new LED lights pose affordability challenges for residential consumers, ultimately impeding the progress of the worldwide market.

SEGMENTATION

By Product Type Analysis

Lamp Segment to Dominate Due to Shift from Traditional Lighting to LEDs

By product type, the market is divided into lamps and luminaires.

Due to increasing adoption of light emitting diode lighting and technological advancements, the lamps segment generated the highest revenue in 2022 and is expected to continue the trend during the forecast period. Due to the increasing use of light emitting diode lamps and replacement of traditional lighting systems with LEDs, the segment is projected to witness heavy traction from customers.

The luminaires segment observed moderate growth due to increasing use of modern technologies in the light emitting diode systems. The luminaires segment is expected to grow with the highest CAGR during the forecast period.

By Installation Type Analysis

Retrofit LED Segment Generated Robust Revenue Owing to their Heavy Demand

By installation type, the market is divided into new LED and retrofit LED.

The retrofit LED segment generated the highest revenue in the global market due to heavy demand for retrofit LEDs to replace the old lights that use existing electrical fitments. However, the new LED segment is predicted to exhibit the highest CAGR during the forecast period. This is due to the increasing use of energy-efficient and fancy new LED lights in residential as well as in commercial spaces.

By Application Analysis

Strict Government Rules for Using LEDs in Outdoor Lightings Will Boost Product Application in Outdoor Settings

By application, the market is divided into indoor and outdoor.

Increasing application of LED technology in outdoor settings is propelling the market growth. LED lights are being increasingly used in street lights. The department of energy ministry of various countries have passed regulations for the strict implementation of LED lighting in outdoor settings to help them achieve their energy efficiency goals. However, the indoor segment may record the highest CAGR during the forecast period. This is due to increasing government initiatives to provide low-cost LED lightings for residential and commercial buildings to reduce energy consumption and increase energy efficiency. 

By Distribution Channel Analysis

Offline Distribution Channels Generated Highest Revenue in 2022 Due to Customer-friendly Shopping Options

By distribution channel, the market is classified into online and offline.

The offline segment generated the highest market revenue in 2022. The demand for light emitting diode lighting is increasing owing to its technical benefits. There are several benefits of shopping from offline stores, such as real-time feel of the effect of LED lighting and availability of various lighting effects under a single roof. These factors will make offline distribution channels highly popular among customers.

However, the online segment is expected to record the highest growth rate during the forecast period. Increasing preference for online shopping and usage of Artificial Intelligence (AI) in online stores is anticipated to propel the growth of the online segment during the forecast period. 

By End-user Analysis

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Residential End-users to Increase Usage of LED Lights Due to their Numerous Benefits

By end-user, the market is classified into residential, commercial, industrial, and Highway and Roads.

The future landscape points to the 'residential segment' as the predominant share holder in the market, primarily attributed due to the numerous advantages of light emitting diode systems in household applications. LED lighting has garnered extensive use in creating intricate lighting arrangements within residential settings. Notably, the residential sector emerged as the leading revenue generator in 2022 and is projected to maintain the CAGR throughout the forecast period. Numerous customers are choosing light emitting diode lighting systems, which is anticipated to drive the global market. The Similar trends are anticipated within the industrial segment during the forecast period. Moreover, the revenue stemming from unit sales of LED devices in both residential and industrial sectors is notably substantial, due to the frequent utilization of these devices within these sectors. Such intensive use can lead to a shortened lifespan, necessitating replacements and generate the need to replace them. On the other hand, commercial and others segments are expected to show moderate growth during the forecast period. However, restricted financial budgets of commercial and other end-users may affect the global market growth.

REGIONAL INSIGHTS 

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The Asia Pacific LED Lighting Market size was valued at USD 41.19 Billion in 2022 and is growing at a CAGR of 21.7% from 2023 to 2030. The increasing utilization of light emitting diode lamps and luminaires in smart residences and urban centers is anticipated to be a catalyst for market advancement in the region. Furthermore, prominent industry participants are embracing a range of strategic approaches to stimulate growth within the local market.

China Generated Highest Revenue in 2022 Due to Presence of Advanced Manufacturing Units

China is the highest revenue generating country in the market. It is projected to become the fastest growing country during the forecast period. China has one of the most advanced diode manufacturing facilities in the world and it is rapidly adopting the emerging trends of energy savings in regular industrial and residential operations, which is expected to surge the product’s adoption in the country.

Some top players are adopting various business strategies, such as partnerships, acquisitions, and business expansion to boost the market growth in the country. Also, China is a global hub for manufacturing of semiconductors and transmitters, which will drive the market in the country.

Due to the escalating demand for LED lighting across the Asia Pacific region and the prominent presence of industry leaders in China and India, the Asia-Pacific region is anticipated to experience the most rapid growth throughout the projected period. Moreover, the proliferation of small and medium-sized manufacturers in emerging economies like India, Japan, and South Korea is propelling market expansion in this region. Additionally, several governmental bodies have initiated endeavors such as the 'Make in India' campaign, contributing to the impetus of market growth within the region.

In North America, the U.S. market is poised for significant growth during the forecast period due to the widespread adoption of cutting-edge technologies across both residential and industrial sectors within the nation. This technological integration is a primary driver of regional market expansion.

In Europe, Germany shows its dominance over the regional market in 2022, and this dominance is projected to continue during the forecast period. Notably, Germany is also projected to exhibit the highest Compound Annual Growth Rate (CAGR) over the forecast period. This is attributed to the presence of extensive manufacturing facilities specializing in smart home equipment within the country.

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However, in the Middle East & Africa and South America regions, market growth is expected to be more restrained. This is primarily due to the comparatively slower uptake of advanced technologies and a scarcity of skilled labor essential for the operation of smart lighting equipment manufacturing plants.

KEY INDUSTRY PLAYERS 

Key Companies to Set Up Production Plants in Developing Countries to Save Labor and Production Costs

Among the top players, Signify Holding had generated top revenue in terms of market share. The company is a major manufacturer of diodes and capacitors, which are the main components of an LED lighting system. It also provides raw materials to other players in the global market. Companies, such as OSRAM, Acuity Brands Lighting Inc., Dialight, Digital Lumens Inc., Hubbell Lighting, LSI Industries Inc., LumiGrow, and others, have set up their production plants in developing countries, where the production and labor costs are lesser as compared to others. Furthermore, most of the players are focusing on product launches, acquisition, and partnership strategies with various small-sized and medium-sized companies, which is anticipated to expand their regional presence.

List of Key Companies in LED Lighting Market:

• Acuity Brands Lighting Inc. (U.S.)


• Signify Holding (Philips Lightings) (Netherlands)


• Dialight (U.K.)


• Digital Lumens Inc. (U.S.)


• Hubbell Lighting (U.S.)


• LSI Industries Inc. (U.S.)


• LumiGrow (U.S.)


• OSRAM (Germany)


• Syska LED (India)


• Wipro (India)

KEY INDUSTRY DEVELOPMENTS:

• October 2021 - Signify Holdings, a subsidiary of Philips Lightings and provider of LED solutions, launched its new product called Philips HexaStyle downlight. This product launch will provide hexagonal LED solutions for creating different ceiling designs.


• July 2020 - Savant System Inc., a provider of smart home solutions, acquired a lighting business from GE Lighting. This acquisition will provide more innovative LED solutions to its customers.   


• October 2021 – Skyview Capital, a global investment firm, acquired the digital lighting business from OSRAM Licht AG. This acquisition will enable Skyview Capital to enter the smart LED business.


• June 2021 - Wipro lighting system, a provider of LED lights and LED luminaires, partnered with Enlight, a leading provider of Internet of Things (IoT)-based lighting software, to provide better experience to its customers.


• June 2022 - LED lights and solutions provider DEDO lights and its partner company Prolycht launched the new RGBLAC LED lighting system. This LED provides 6:1 variation spot light beam.

REPORT COVERAGE

An Infographic Representation of LED Lighting Market

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The report provides a detailed analysis of the global market and focuses on key aspects, such as leading companies, product/service types, and leading end-use industries of the product. Besides this, the report offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market’s growth in recent years.

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