Vietnam LED lighting market have opportunities and risks
According to the report of the Southeast Asian lighting market, the LED lighting industry in recent years, Europe and the United States and other mature market saturation gradually increased, the Chinese market price competition, many suppliers. So Southeast Asia, South America, the Middle East and other emerging markets is becoming a positive layout of many vendors Nuggets. Which the Vietnamese market because of low labor costs, attracting a lot of foreign-funded enterprises, plus per capita income growth year by year, have the opportunity to drive the local LED lighting market demand. Analysis of industry institutions and statistics that in several major Southeast Asian countries, the Vietnam LED lighting market share the fastest growing, 2013-2015 annual average annual growth rate of more than 60%. To 2016, LED lighting market reached 348 million US dollars, the penetration rate of more than 40%.
In the past in the era of traditional lighting, Vietnam consumes about 200 million a year about the traditional light bulbs, mainly in more power consumption of the traditional tungsten filament lamp based. In recent years, the Vietnamese traditional lighting market continued to decline, while the LED lighting market has maintained upward trend. Taking into account the government subsidies and rising market demand for the growth momentum, LED lighting penetration rate growth is expected to further improve. By 2018, the penetration rate is expected to reach 51%.
As the 14th most populous country in the world, Vietnam has a population of 94 million. At present, half of the total population is under the age of 30 and 60 per cent is working-age. Human resources are abundant and labor costs are relatively low in Asian countries. Vietnam can use the land resources area of ??about 34.776 million hectares, 2011-2015 development and use of 30.998 million hectares, of which 130,000 hectares of industrial land, industrial land rental price of about 30-100 US dollars / square meter / year. In addition, the Government has been committed to strengthening social and political stability, revitalize the economy and investment climate, increase the intensity of the development of infrastructure. According to the Vietnamese Ministry of Planning and Investment is expected by 2020, Vietnam will need to invest 1500 to 160 billion US dollars in infrastructure.
Low land, labor costs, and infrastructure and the rapid development of the political economy, making Vietnam has been successful in attracting new investment in electronic products and electrical products. Especially South Korean manufacturers, have in the Vietnamese production line, trying to make full use of local resources. Samsung has invested in the production of mobile phones, batteries, electronic components, displays, household appliances and other products in the production base and R & D center, a total investment of more than 12 billion US dollars. Currently 50% of the Samsung mobile phone production in Vietnam. LG is also investing $ 3 billion in Vietnam for the production of OLED display modules and mobile phones, televisions and other household appliances. In addition, Seoul Semiconductor and Lumens invested 300 million US dollars and 20 million US dollars for the production of Vietnam.
LED lighting manufacturers in the part of the Vietnamese market, mainly for the local lighting manufacturers and Europe and the United States dominated by manufacturers. Well-known local lighting companies in Vietnam are DienQuang, RangDong, Duhal, etc., while foreign investors are based on Philips, Cara, Eurolight and other enterprises. Nevertheless, as local manufacturers are mainly concentrated in the downstream lighting assembly areas, the lack of obvious industrial chain, the overall industry chain there is still much room for development. However, the Vietnamese lighting market is mainly project-based, mostly from the new plant LED lighting needs, or part of the government standard case. So most of the need to work with the local lighting manufacturers in Vietnam, or set up factories in the local assembly is possible to obtain the standard case.
Overall, as a fast-growing emerging market, Vietnam in the overall economy, infrastructure, resources and other aspects of the favorable factors are to promote investment in LED lighting business and the development of the local market. In addition, Vietnamese spending power is growing, following the past China, Thailand, Vietnam's domestic market has begun to flourish. In the initial stage, the company can promote the products through the appropriate agents, and then create local brand awareness through local government support, or acquire the local access channels through M & A, thus expanding the local market.