Product – Commercial Lighting

LIGHTING INDUSTRY
From traditional incandescent lamps to compact fluorescent lamps (CFL) to light-emitting diodes
(LED) and laser diodes (LD), the lighting market has come a long way in the last 10 years. With
growing LED adoption and increasing smart solutions, leveraging Internet of Things (IoT) and Light
Fidelity (LiFi), the lighting market is going through a phase of enormous transformation. This
transformation is not restricted to technological advancements. A paradigm shift has been
observed in the entire lighting market dynamics, directly impacting product offerings,
competitive landscape, distribution channels, and business models.

Key Market Drivers

- Rise in smart city projects and overall infrastructure development: 99 smart cities are
being planned in India with expected investment worth $30.3 billion towards their
completion

- Increasing demand for energy – efficient lighting and emergence of the LaaS business
model: While there is increasing demand for energy-efficient lighting, the relatively high
investment costs (when compared to traditional lights) act as a deterrent to end users. To
counter this, more companies are offering LaaS wherein the customer does not have to
bear any upfront costs. The scenario where customers get upgrades in lighting systems,
comprehensive maintenance, and on-demand technical assistance, all at no upfront
costs, is proving to be a winner. This has led to several customer sectors adopting this
model, specifically in the commercial segment, giving the much needed confidence to
lighting manufacturers to consider advanced lighting solutions, which are usually high
priced but have an enticing TCO
- Improved functionality and controllability of lighting solutions: The ‘smart city’ era is
accelerating the shift towards intelligent lighting, resulting in lighting beyond illumination,
and providing high value to customers.

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 - Decreasing total cost of ownership (TCO) of advanced lights: There is increasing focus on
the TCO of lighting systems. For segments such as the professional segment, the TCO is
central to purchase decisions. As a result, professional customers have moved to more
efficient conventional technologies and are shifting to LED. Based on this aspect, some
manufacturers are marketing their LED products. LED prices have drastically dropped over
the years, pulling forward the payback time for LED lights. As LED prices continue to fall,
the TCO will become an even stronger selling point, and will help increase the adoption
of advanced lights such as LED

Key Market Restraints

- High investments in Research and Development required to tap into continuously
evolving technology: Lighting technology is rapidly evolving, impacting lighting
components, lamps, electronics, luminaires, and controls. To keep pace with this
development, companies need to invest considerably in R&D and manufacturing. Large
investments would become a huge challenge when there is a slowdown in the economy.
This hinders the growth of advanced lighting solutions.

- Increased competition reducing the average product price of lighting systems and
affecting market revenue: The lighting market is witnessing a strong influx of low-priced
products from Chinese and Taiwanese manufacturers, especially in the low-end segment.
End users in this segment are not brand conscious, with price as the deciding factor. These
factors make the environment tough for multinational companies, whose products are
priced at least 20–30% more than domestic or Chinese products. Some manufacturers
that cater to this segment are forced to reduce their selling price, thus bringing down the
average product price of lighting systems in this segment, affecting the overall market
revenues

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Lighting Market by Application
While residential applications were driving the revenue until now, industrial and hospitality
applications will see the highest growth during 2019-2023 for Asia – Pacific

Healthcare
Architectural
5%
11%
Retail
14%
Healthcare
Hospitality
8% Retail
Residential
Industrial
2% Outdoor
Office and Education
Industrial
Hospitality
Architectural
Office and Education
19% Residential
27%

Outdoor
14%

Percentage Revenue by Application, 2018

Lighting Market: Revenue by Application

In 2018, Asia – Pacific recorded the following revenue (application segment wise):

Application Segment 2018 Revenue Growth Outlook

($M) 2023 (CAGR)
Retail 3967.4 >=7%
Residential 7677.9 3-7%
Outdoor 4024.5 3-7%
Office and Education 5308.9 =>7%
Industrial 513.8 =>7%
Hospitality 2397.6 =>7%
Architectural 3225.3 =<3%
Healthcare 1427.1 3-7%
Total 28542.5 3-7%

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Lighting Market – Key Customer Segments
- Retail: Lighting plays an important role in the retail world. Appropriate lighting can
enhance retail spaces significantly and greatly contribute to an all-round experience for
shoppers. With brick-and-mortar stores facing heavy competition from online stores and
peers, retail stores are all out to pique customers’ attention and give them a wholesome
experience in the store.

- Offices, Schools and Universities: In offices, schools, and universities, the integration of
solid-state lighting (SSL) with control gears will help tune the lighting for appropriate
colour temperatures to enhance work and learning environments and improve the
productivity of employers, employees, teachers, and students. Products developed with
profound R&D to address the needs of these applications will entail lighting companies’
(in-house) trained installers.

- Outdoor Lighting: In outdoor applications, such as lighting for streets and parking spaces,
there is an increasing trend toward integrating wireless control (to brighten or dim
illumination) with daylight levels. This will entail the direct involvement of lighting
companies and technology providers, along with city authorities and installers.

- Industrial Lighting: The future of industrial lighting belongs to LEDs. As LED becomes
cheaper, adoption is going to increase manifold, providing a much more efficient,
sustainable, and economical lighting solution. With further advancements in light output,
energy efficiency, optics, color options, and hazardous location safety and certification,
LEDs will make stronger inroads into the industrial sector.

- Hospitality: The emergence of LED lights has paved way for new and innovative lighting
solutions in the hospitality sector. Lighting is no longer just about illumination, but is an

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 integral element of design and customer experience, and is increasingly proving to be a
competitive differentiator.

- Healthcare: Lighting is important for healthcare facilities, because of the enormous

impact it can have on patient outcomes, healing, and overall health.

- Residential: In emerging economies, replacement of traditional lamps with LED has kept
lighting market revenues running. In more developed economies, the advent of smart
homes is changing the face of lighting. The demand for dimmable and smart lights is
increasing, which are poised to grow further in the next 5 years, also buoyed by rising
electricity prices.