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LighTimes: Consolidation Eminent as China’s LED Lighting Market to More Than Double to $7.4 Billion in 2017, According to Lux Research

03 Jan 2014

January 3, 2014…Lux research predicts that China’s LED lighting market will more than double to $7.4 billion in 2017 from $3.1 billion. Lux research cites ongoing urbanization, local energy savings targets, and LED lighting price drops as growth drivers. The company expects that LED Lighting for residential and commercial segments combined drive the LED lighting business’s annual growth at a compound annual growth rate of of 24%. Lux Research forecasts that this will far outpacing the 5.6% CAGR for the broader lighting market. For this reason, Lux Research says that LED lighting will grow its share of the lighting market from 9.6% to 18%.

“LED lighting has changed from expensive products outside the cost-conscious sweet-spot of Chinese buyers to value-adding solutions, gaining market share and realizing sustainable growth,” said Jerrold Wang, Lux Research Associate and the lead author of the report titled, “Running to the Light: Sizing China’s LED Lighting Market.”

Guangdong, Shanghai, Zhejiang, and Jiangsu reportedly emerged as the upper tier of “premium” markets for LED adoption. Guangdong offers the best overall combination, driven by the largest new and existing building floor space in 2015. The Chinese residential LED market is expected to show the fastest growth, going from $23 million in 2013 to $310 million in 2017, a CAGR of 92%, the highest among five market segments – as average prices fallthe fastest, from $6.02 per fixture in 2013 to $3.13 in 2017.

Lux Research says that consolidation among the more than 5000 players in the LED lighting market is coming. The company further notes that the top 50 suppliers account for only 33% of the market and the top 10 take up merely 18%. The company forecasts that Industry consolidation is imminent over the next five years, with suppliers of poor-quality products facing elimination.