Vietnam's LED lighting market size will reach US$348 million in 2016
Due to the slowing growth of the global LED lighting market, LED manufacturers have been investing in emerging markets to seek new blue oceans. According to the latest research report, Vietnam's LED lighting market reached US$271 million in 2015, and is estimated to grow to US$348 million in 2016, a growth rate of 28%, making the Vietnamese market increasingly favored by LED lighting industry players.
Observing the overall Vietnamese LED lighting market, Vietnam previously consumed approximately 200 million traditional light bulbs per year, mainly consisting of traditional tungsten filament bulbs which are more power-consuming. As LED penetration rises, Vietnam's traditional lighting market has continued to decline over the past few years, while the LED lighting market has maintained an upward trend; the LED lighting penetration rate in Vietnam is estimated to reach approximately 35% in 2016.
Chu Yuchao stated that since the base period of Vietnam's LED lighting market is relatively low, the growth rate of its market size is faster than that of other Southeast Asian countries. In recent years, as consumer spending power in Vietnam has increased, the demand in its LED lighting market will also gradually shift from the current main engineering applications to residential lighting applications.
Chu Yu-Chao pointed out that under Vietnam's low labor cost conditions, many foreign companies have successively entered to set up factories, so LED lighting demand mostly comes from new construction projects. In addition, China, Japan, and South Korea have also launched Official Development Assistance (ODA) to Vietnam, driving the demand for LED outdoor lighting in local infrastructure construction. However, since government and other engineering tenders are mostly controlled by local Vietnamese people, foreign companies need to partner with local Vietnamese manufacturers to have the opportunity to enter the market.
Chu Yu-Chao further stated that as Vietnam's per capita income gradually grows, its LED residential lighting market has also begun to flourish. Therefore, for LED manufacturers, local brand management and channel establishment will become the key to expanding the market.