ARCHITECTURAL LED PRODUCTS MARKET ANALYSIS (2020-2027)

An LED light bulb or lamp is an electric light that is primarily used in light fixtures by using one or more light-emitting diodes. LED lamps are energy-efficient, have a longer lifespan, and use only a fraction of energy as compared to equivalent incandescent lamps. LED lights emit around 90% lesser heat than incandescent lamps. In the recent past, the prices of architectural LED products have decreased significantly, which in turn, has increased its adoption for various applications. In architectural lighting, both technology and art are used to attain aesthetically pleasant lighting and energy-efficient lighting. The architectural lighting is done for commercial as well as residential projects. According to Coherent Market Insights’ analysis, the average selling price of LED products declined by 20% in 2014.

The global architectural LED products market is estimated to account for US$ 8,067.3 Mn in terms of value by the end of 2019

Market Dynamics- Drivers

Growing consumer inclination towards luxurious lifestyle is expected to drive growth of the global architectural LED products market during the forecast period

Increasing consumer inclination towards luxurious lifestyle has boosted the demand for LED lighting products significantly worldwide. This demand has been observed in commercial as well as residential sectors. Moreover, the government offices and monuments are increasingly adopting architectural LEDs luminaries and lamps as part of smart city initiatives. Thus, these factors are expected to support growth of the global architectural LED products market over the forecast period. For instance, in 2013, the Royal Castle in Warsaw, Poland, installed Philips’ LED solution eW Graze linear lighting solution on the façade of the royal castle. The motive behind installation of architectural LED lights is to display the color of the facade as realistically as possible. Furthermore, in 2014, the Turkish government awarded a contract to Philips to install architectural LED products across 21 sites in Ankara city.

Stringent government regulations regarding deployment of LED lamps is expected to propel the global architectural LED products market over the forecast period

Government regulatory policies concerning construction of artistic buildings across various regions have accelerated the deployment of efficient lighting systems by construction companies. Moreover, government organizations across the globe are emphasizing on the implementation of minimum standards for lighting products efficiency and ban adoption of incandescent lighting products, in order to enhance the efficiency and cut-down CO2 emission. For instance, the Government of China has banned the use of 1000W and 60W incandescent bulbs across the country. Moreover, the European Union (EU) has banned the usage of all types of conventional incandescent lamps in the region. Hence, these factors are expected to boost the market growth in the near future.

Asia Pacific region dominated the global architectural LED products market in 2019, accounting for 52.3% share in terms of value, followed by Europe, and North America respectively.

Source: Coherent Market Insights

Market Dynamics- Restraints

High initial cost of installation is expected to hamper the global architectural LED products market growth over the forecast period

Compared to commercial sector, adoption of LED lighting products in residential sector is relatively low. This is owing to high initial cost of installation. Residential users are still preferring low-cost lighting technology products such as fluorescent lighting fixtures, particularly in emerging economies. This, in turn, is expected to hinder the demand for LED lighting products and thereby restrict the market growth over the forecast period. Currently, cost of 60W equivalent LED bulb is 9X that of 60W florescent bulb.

Consumer inclination towards other lighting technology products is expected to restrain growth of the global architectural LED products market during the forecast period

In the current scenario, fluorescent technology products account for the larger share of the overall lighting market as compared to architectural LED lighting fixtures. According to Coherent Market Insights’ analysis, in 2012, fluorescent lamps accounted for a 12% share of the overall lighting market, while market share of LED lighting was around 10%. Therefore, these factors are expected to hamper the market growth over the forecast period.

Market Opportunities

Tie-ups and partnerships with construction companies and home builders are expected to pose lucrative growth opportunities

Growing construction business across the globe has presented an excellent opportunity for architectural LED products provider to partner with construction companies and home builders. Installation of energy- and cost-effective lighting systems in the commercial sector presents huge market opportunity for providers of architectural LED products. According to Coherent Market Insights’ analysis, the global construction market is projected to grow at an annual average of 4.1% during the forecast period (2015–2021). Furthermore, key companies in the market have significant opportunity to sign agreement construction companies, in order to gain competitive advantage in the market. For instance, in September 2012, PhotonStar LED Group plc signed a one year LED light fixtures supply agreement with a leading U.K. home builder. The installation of LED light fixtures in new constructions helped the home builder meet carbon-emission target in a cost-effective manner.

Tie-ups with e-commerce companies are expected to offer significant business opportunity

High growth e-commerce business in emerging economies such as Brazil, India, and China has offered lucrative growth opportunity for architectural LED products manufacturers and providers. Key manufacturers can tie-up with online retailers such as eBay and Amazon Inc., in order to endorse architectural LED lighting products and solutions among consumers.

Source: Coherent Market Insights

Global architectural LED market, by application type segment, wall washing type sub-segment was accounted for 39.8% market share in 2019 and is expected to grow at a CAGR of 18.5% between 2019 and 2027.

Source: Coherent Market Insights

Market Trends

Growing mergers and acquisitions among key players are expected to be a major trend

Key companies in the market are focused on strategic activities such as mergers and acquisitions, in order to enhance their presence in the global market and gain competitive edge. For instance, in May 2015, Leviton Manufacturing Co., Inc. acquired Intense Lighting LLC and expanded its product portfolio with the addition of the latter’s LED lighting solutions for the residential, retail, commercial and hospitality sectors. Moreover, in September 2013, Magic Lite Ltd. acquired National Specialty Lighting—an architectural and specialty lighting company—in order to enhance its technological capabilities to manufacture advance LED lightings and presence in the U.S. architectural LED lighting market.

Strategic partnerships and collaborations with e-commerce platform providers is another major trend in the market

Growing adoption of LED lights in various industries have compelled architectural LED products providers and e-commerce companies to form strategic alliance, order to expand their consumer base and gain competitive edge in the market. For instance, in July 2014, Phillips Lighting Limited entered into a strategic alliance with Amazon.com, Inc. in order to enhance its presence in the market.

Regulations

North America

In December 2007, President George W. Bush signed the Energy Independence and Security Act of 2007 (EISA 2007) with the purpose to establish new efficiency standards for products, public buildings, and vehicles and to enhance production of clean renewable fuels. Subtitle B, Section 321 of the EISA 2007 legislation established a phase-out timetable for 40, 60, 75, and 100 watt incandescent lamps as well as standards and a phase-in schedule for appropriate replacement lamps.

Competitive Section

Key companies operating in the global architectural LED products market are Epistar Corporation, GE Lighting LLC, Galaxia, Cree Inc., Cooper Industries PLC, Signify N.V., Philips Lumiled Lighting Company LLC, Verbatim Ltd., Osram Licht AG, Toshiba Lighting & Technology Corporation, and Samsung Electronics.

Key Developments

Major market players are focused on mergers and acquisitions, in order to gain competitive edge in the market. For instance, in November 2018, American Industrial Partners, a U.S.-based private equity firm, acquired GE Lighting LLC’s solid-state lighting (SSL) business unit.
Key players in the market are involved in product launch, in order to enhance their product portfolio. For instance, in July 2018, Cree Inc., a U.S.-based provider of LED lighting, introduced new High Efficiency (HE) version of XLamp XP-G2 LED.

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