Domestic Lighting Fixture Market for General Lighting Purposes Projected to Drop by 2.6% YOY to Attain 984,560 Million Yen for 2019, Fall Further by 11.0% YOY to Yield 875,778 Million Yen for 2020
Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic lighting fixture market and has found out the general-use lighting fixture market overview, the trends of the market players, and the future outlook.
Size of the domestic lighting fixture market for general lighting purposes in 2019 is projected to drop by 2.6% from the previous year to attain 984,560 million yen (a total of conventional lighting fixture, conventional lighting lamps, and LED lamps, based on the shipment values at manufacturers).
Against the backdrop of concerns for electricity supply and demand tightness which was triggered by the Great East Japan Earthquake in 2011, demand for LED lighting with high energy saving effect has been expanding rapidly. While the shift from conventional lighting to LED lighting led the LED lighting market to grow, sharp decrease in the conventional lighting market is projected to deter expansion of the entire market. It is projected that the domestic lighting fixture market for general lighting purposes in 2020 will diminish by 11.0% from the preceding year to yield 875,778 million yen. Due to several reasons including economic downturn caused by COVID-19 calamity, the market expects significant fall from the previous year.
Industry Restructuring in the Lighting Fixture Market
As the LED lightings prevail, price competition has intensified so much that LED lighting makers have difficulty ensuring a profit compared to the times when the LED lighting just started to spread. From the perspective of selection and concentration, some parent companies are disposing/divesting their subsidiaries or related companies that are in lighting fixture businesses.
However, with COVID-9 crisis, it may be possible that those small and mid-size independently owned makers of lighting fixture may lead the industry restructuring hereafter.
Size of the LED lighting fixture market for 2020 (a total of LED lighting fixtures and LED lamps, based on the shipment value at makers) is projected to decline by 8.7% from the preceding year to attain 775,200 million yen, and fall further by 1.6% year on year to yield 762,900 million yen for 2021. Moreover, it is also predicted that the market for 2025 will shrink by 4.7% from 2020 to attain 738,700 million yen.
The LED lighting fixture market no longer enjoys good sales as it used to, with growth rate becoming sluggish every year. In 2019, the market dipped to negative growth, followed by drop in demand related to the Tokyo Olympic and Paralympic Games for 2020. Coincided with economic slowdown due to the COVID-19 calamity, the market is likely to experience considerable decrease. While it is uncertain when the COVID-19 crisis ends, based on flow (annual shipment), as a rate of shifts to LED lights (SSL lights) has almost reached 100 percent, signicant upturn in quantity is difficult to anticipate. Furthermore, condition of the market is grim for the LED lighting fixture to grow in value terms, as price competition due to commoditization of LED lights is becoming harsher.
Meanwhile, there are some positive factors: For one thing, in terms of stock, a rate of shift to LED lights (SSL lights) is estimated to be around 50%, therefore a renewal demand can be anticipated for the remaining 50%; for another, while LED lights became remarkably popular after the Great East Japan Earthquake, those LED lights installed at the time is likely to reach life, as the product lifetime of LED lights is said to be around10 years. Sequential replacements of LEDs with LEDs (“L to L” demand) are expected.
In addition, once the economic activities come back with the end of COVID-19 calamity, it is assumed that the stores, commercial facilities, and accommodations damaged by the crisis will open again and capital investments among enterprises recover, leading to continuance of stable demand for the LED lighting fixture market.
Although the market trend in basic cannot hope for an uptick as before, as annual new demand / renewal demand at certain level are foreseen for years to come, it is difficult to think that the demand for lighting fixtures will drop significantly. In medium-term, it is forecasted that the market expects gradual decrease.
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