LEDInside: China LED market to grow 36% in 2013, Home lighting market to expand by approximately 90%

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China’s LED lighting market will reach RMB 32.4 billion (US$5.24 billion) in 2013, at a year-on-year growth rate of 36 percent, according to LEDInside’s latest Chinese LED Lighting report. LEDInside is a research division under global market research organization, TrendForce. The report highlighted the home market growth of 96 percent, placing it just one place behind the top ranking commercial market. Traditional lighting manufacturers, such as NVC Lighting Technology (NVC), Opple Lighting (Opple), PAK Corporation (PAK) and Foshan Electrical Lighting (Foshan) have all switched to LED lighting, while Taiwanese and Chinese LED assembly companies including Everlight, Edison Opto (Edison), MIS Lighting (MIS), Shenzhen Changfang Lighting (Changfang) are more proactive in utilizing advantages in LED manufacturing to grasp a share of China’s LED lighting market.

Benefiting from manufacturers’ concentrated investments in lighting distribution channels, the LED lighting products’ end-user price has fallen rapidly, resulting in increased consumer acceptance, LEDInside noted. China’s LED lighting applications in the commercial, home, industrial and outdoor markets have grown by 24 percent, 96 percent, 28 percent and 46 percent respectively in 2013. In addition, the LED lighting market is officially entering mass distribution era, with increased competition between traditional lighting and LED manufacturers. Whether LED manufacturers can successfully claim market share in the future will depend on their ability to set up distribution channels.

Looking at lighting manufacturers 2012 revenues, LED lighting products account for a relatively small portion of traditional lighting companies’ revenues. Although traditional lighting manufacturers including NVC, Oppel, PAK, and Foshan have begun to introduce LED lighting products lines, their policies of adopting LED lighting products and investment policies are more conservative to prevent direct impact on traditional lighting businesses.

Chinese LED manufacturers such as MIS and Changfang are taking advantage of component packaging costs, and entering the end-user market under the image of “LED price butchers”. Not only do their products have competitive pricing compared to traditional lighting brands’ LED products, they also implement attractive investment incentives, including reimbursing product differentials within three months to alleviate distributors’ inventory risks. As the four traditional lighting brands’ control over China’s LED lighting channels gradually loosens, more distributors are embracing new LED lighting brands.

Taiwanese LED lighting manufacturers Everlight, Edison and Unity Opto are also very proactive in the LED lighting market. Everlight is officially establishing its distribution system in China in 2013, and will be setting up its sales channels via distributors. On the other hand, Edison will be working with traditional lighting manufacturers to acquire market share in China’s LED lighting market, while Unity Opto is partnering with Potevo Group to launch lighting product, “Unity Opto-Potevo”.

For manufacturers, the most pressing issue is selling products quickly to obtain market share, noted LEDInside. The main sales channels for LED manufacturers were mainly engineering projects and exports during earlier stages. At the time, revenue models based on sales channels consisting of dealers, agents, and exclusive shops did not exist yet. According to statistics, fewer than 30 percent of Chinese LED manufacturers use distribution channels to generate revenue in 2012. As LED lighting products become increasingly popular and widespread, distribution channels can no longer be restricted to engineering projects and exports. In the future, LED lighting will face similar scenario as traditional lighting, where the market will be governed by the company that obtains the distribution channels.

For further details on China’s LED lighting market trends, please see LEDInside’s “2013 Chinese LED Lighting Market Report.” Statistics in the report are updated until March, 2013.

Chapter 1: China’s lighting market model and forecast

• Foreword
• Forecast of China’s lighting market value 
• Analysis of China’s lighting exports
• Forecast of China’s lighting market demand
• Major players in China’s lighting market

Chapter 2: Chinese government’s LED lighting industry policies and regional development

• Foreword
• Chinese government’s supporting and important LED lighting policies
• Regional LED promotion and implementation

Chapter 3: Detailed analysis of lighting market and sales channels

• Foreword
• Analysis of China’s LED sales channels
• Commercial lighting—Retail, Hotel, office buildings, entertainment.
• Home lighting
• Industrial lighting
• Outdoor lighting

Chapter 4: Overview of China’s LED lighting supply chain

• Foreword
• Overview of major LED brands OEM supply chains
• Basic requirements to enter OEM supply chains
• Analysis of OEM case studies and conclusion

Chapter 5: LED energy saving modifications and main business models

• Energy Management Contract (EMC) model
• BT model
• EMBT model

Chapter 6: LED lamp features and LED lighting product cost analysis 

• Foreword
• Analysis of LED lighting product features
• Analysis of key components of LED lamps
• Analysis and forecast of various LED lamp costs 
• Analysis of LED lights energy saving cases 

Chapter 7: Overview of LED lighting accessories and manufacturers

• Development of LED driver and related manufacturers
• Development of LED lamps power supply unit and related manufacturers
• Overview of LED lighting thermal module development and related manufacturers

Chapter 8: Investment recommendations and trend analysis

• Foreword
• Recommended investment strategies
• Trend analysis and conclusion

For further details about LEDInside’s report and explanations of member reports, please contact:

Taipei Office

Joanne Wu 

joannewu@trendforce.com

+886-2-7702-6888 ext. 972

 

ClaireHou@trendforce.com

+886-2-7702-6888 ext. 861

 

Shenzhen Office

Sara Fan

sarafan@sz.dramexchange.com

+86-755-8283-8931

 

Shanghai Office

Allen Li

AllenLi@trendforce.com

+86-21-6439-9830 ext. 608