Analysts forecast the LED Lighting market in China will grow at a CAGR of 26.9 percent over the period 2013-2018.
The market faces many issues that could restrain growth because of the presence of a large number of vendors. However, the market is currently witnessing consolidation, which could reduce the number of vendors and increase the production of innovative lighting products. On the technological front, consolidation will increase the product life cycle and vendors could focus on their R&D processes. Furthermore, market consolidation will decrease the intensity of competition and price wars.
The growth of the LED Lighting market in China is driven by several factors, especially strong government support towards the adoption of LED lighting. The Government of China has framed strong policies that have had a positive impact on the market, influencing the high adoption rate of LED lights. This government support is expected to continue, fueling the market′s growth during the forecast period.
Despite the presence of several drivers, the LED Lighting market in China faces serious challenges such as the high inventory levels in the LED supply chain. High inventory levels in the supply chain cause a fluctuation in demand, which in turn affects the profitability of vendors and the market at large.
LED lighting, also known as solid state lighting, is a semiconductor-based lighting technology. LEDs emit light based on the electroluminescence principle, which gives them high luminous efficacy. Also, LEDs are compact in size and are more power efficient as well as brighter than traditional lighting technologies such as incandescent and fluorescent lamps. Owing to these advantages, customers prefer to use LEDs for general lighting applications. In China, LEDs are gaining more importance due to their power and luminous efficacy. Moreover, the government also supports the adoption of LED lighting to a large extent. Thus, China is becoming one of the largest potential markets for LED lighting.