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Global LED players vying for a share of Indonesia’s LED market

Global LED players vying for a share of Indonesia’s LED market

By BizLED Bureau

Feb 23, 2017: Indonesia’s LED industry is poised for a massive growth in the coming years. The domestic and global LED manufacturers are optimistic about the prospects in Indonesia’s LED lighting industry.

This trend has been sparked by the Indonesian government’s commitment to replace traditional outdoor displays with LED displays, and to increase consumer awareness about the the energy-saving LED lighting options. Many domestic as well as global LED vendors are showing keen interest, and want to be a part of the change.

Indonesia’s LEDs market will witness high growth owing to high rate of urbanization, government support, and increasing affordability. The Indonesian market also faces low electrification and has huge power shortages in the domestic market. More than 40 million Indonesians are still living in the dark. With the Indonesian government making efforts to raise the electrification demands, the LED lighting market is expected to grow, and create business opportunities for local and global LED lighting players. LEDs based lighting is seen as a viable option to reduce the burden from existing power source. The government has been strategically changing the government policies and tariffs to promote LED products in domestic market.

This has attracted many multinational companies to invest in Indonesian market which is contributing towards Indonesia LEDs market growth. This pattern is expected to continue during the period 2016–2022 to increase Indonesian market at a CAGR of 21.5% reaching $1.85 billion by 2022.

Scope for growth

While Indonesia’s LED lighting industry is still at its nascent stage, market analysts believe that it has considerable scope for growth and potential business. Domestic consumers are now aware about the benefits of LED for industrial and residential use of this energy-efficient lighting source. So the the market is vibrant and growing.

Global players spark competition

However, the domestic market is facing tough competition as the Indonesian government’s policy has opened doors for foreign industry players, resulting in a flood of competitively priced foreign LED lights. The Chinese LED products, in particular, are become increasingly popular in Indonesia. According to experts, in the next five years, LED industry in Indonesia will boom, and Chinese companies will be the key players.

However, many global companies are banking on their good quality products to get a share of the market. The Japanese LED lighting companies, for example, are interested in introducing high-quality Japanese products to Indonesian market, believing that those who look for top-quality LED lights are prepared to pay a higher price. Korean companies will also focus on quality and not cheaper price. Many global companies would like to differentiate by offering customised products.

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