European lighting market analysis and introduction of leading manufacturers

At present, under the environment of global economic fluctuations, the momentum of economic growth in Europe continues to decline. Issues such as weakened internal growth momentum, Italy’s fiscal risks, and Brexit risks cast a shadow on the economy. The slowdown in external demand has put a certain pressure on European exports. In addition, the economic and trade negotiations between Europe and the United States and the increasingly tense geopolitical issues in the Middle East have increased economic uncertainty. However, good inflation, declining unemployment, and rising capacity utilization rates indicate that there is resilience in European economic growth, and maintaining loose monetary policy is also conducive to maintaining economic growth. Taking into account the uncertainty of Sino-US trade frictions and the negative impact of increased tariffs, the European market where policies and lighting demand are relatively stable has increasingly become the focus of lighting manufacturers.

Traditional products are being phased out faster, LED penetration rate has increased

In the past, thanks to the development of traditional lighting towards LED lighting, which brought a new wave of replacement, the European lighting industry developed rapidly, showing a two-digit year-on-year growth rate. However, with the continuous development of the industry, the European lighting replacement wave has passed its peak period. In addition, the development of the lighting industry is closely related to economic development. Since 2018, the business climate in Europe has declined, and the overall market demand has slowed down. According to LEDinside data statistics, the overall European lighting market size was 16.2 billion U.S. dollars in 2018, and the estimated overall European lighting market size in 2019 was 15.8 billion U.S. dollars.

Although demand growth has slowed, the awareness of energy conservation in Europe has increased, which has accelerated the elimination of traditional lighting products and led to a significant increase in the penetration rate of the LED lighting market. As of September 1, 2018, the Halogen Lamp Prohibition took effect in all EU countries in accordance with Act 244/2009 passed earlier. The elimination of halogen lamps will accelerate the development of LED lighting penetration, and the European LED lighting market continues to grow. In 2018, it reached 8.292 billion US dollars, a year-on-year growth rate of 9.5%, and penetration rate of more than 50%. By 2019, the penetration rate is expected to reach 60%.

Filament lamps and human factors are the mainstream market trends

As a region with a long history of rich lighting culture, the European LED lighting market has its unique preferences and characteristics. Therefore, manufacturers wanting to enter the European lighting market must first understand these market preferences, and then make clear target positioning and strategy formulation according to their own situation.

Different from Asian countries, European light culture prefers low color temperature and high indicator, so LED filament lamps have grown significantly in recent years. The amount of filament lamps imported from China by Germany, France, Denmark, Poland and other European countries exceeds 50% of the total, and the growth is obvious. In addition, it can be observed that with the gradual maturity of product technology, the application of filament lamps is moving from decorative products such as candle lamps and pendant lamps to high-power routes.

On the other hand, human factor lighting has gradually become the mainstream trend of European lighting. In the 2025 strategic roadmap issued by the European Lighting Association (Lighting Europe), the development strategy of the European lighting industry in the next ten years can also be observed. The European Lighting Association believes that lighting systems, better light quality, people-oriented and sustainable development are the driving forces for the growth of the European lighting market. Human factors lighting is currently commonly used in commercial and home lighting fields such as offices, schools, restaurants, etc. It emphasizes high light quality and spectrum close to natural light, and integrates humanized intelligent control technology to meet the visual needs of human factors engineering.

Traditional lighting manufacturers are actively transforming, and benchmark manufacturers in all fields deserve attention

The European lighting market is dominated by traditional brand lighting manufacturers. In terms of development strategies, in order to increase product gross margins, it can be observed that various manufacturers have been actively transforming LED lighting in recent years, with a view to developing high value-added services such as smart cities.
In addition to traditional lighting manufacturers, there is no shortage of leading manufacturers in Europe focusing on various major lighting fields. If you want to lay out the European lighting market, you may wish to learn from these benchmark manufacturers, or integrate favorable resources through cooperation or acquisitions to achieve local advantages. The following introduces the representative manufacturers in the four fields of household, industry, commerce and outdoor.

Home Lighting Representative Manufacturer – WOFI

The main market of WOFI is in Europe, and 70% of its turnover is in the German-speaking region. The company focuses on the home lighting market and currently has a market share of approximately 8% in the German home lighting field, which is at the forefront. In 2017, WOFI’s turnover was 60 million euros, and the product gross profit margin was about 60%. The company’s main sales channel is the “medium and high-end furniture store + e-commerce” model. In addition, it is also planned to strengthen the layout of the DIY store channels, such as promotion with younger sub-brands, etc., in order to improve the popularity of products in various grades of the market.

Representative manufacturer of industrial lighting – Dialight

The company’s revenue in 2017 was 181 million euros, of which LED lighting revenue accounted for 76%, and the gross profit margin was close to 40%. Traffic signal and component revenue accounted for 24%. The company’s industrial lighting product applications mainly include heavy industry (steel, automobile manufacturing, etc.), oil and gas, papermaking, mining, chemical and pharmaceutical, energy production, lighthouse and wind farm, catering processing and storage, etc. In the past two years, the application market has gradually shifted to Pulp and Paper; and the focus has shifted from upstream to downstream in the Oil & Gas industry, providing low-cost product solutions and promoting investment and development in the petroleum industry.

Commercial lighting representative manufacturer-ERCO

ERCO began to produce all LED lighting products in 2015, with revenue of approximately 133 million euros in 2017. The main application areas of the product include indoor and outdoor projects such as museums, office spaces, commercial retail spaces, hotel residences, and religious buildings. The company is headquartered in Ludenscheid, Germany, and currently has sales offices and partners in 55 countries worldwide, with more than 1,000 employees.

Representative manufacturer of outdoor lighting – iGuzzini

iGuzzini’s revenue in 2017 was approximately 156 million euros. The main application areas of its products are outdoor and commercial lighting. The holding company is Finanziaria Mariano Guzzini (Fimag), which includes F.lli Guzzini, iGuzzini and Teuco. Design lighting fixtures with well-known Italian designers. In addition, lighting design requires lighting-related knowledge, so it maintains close cooperation with major international research institutions. International market development is operated through branches and distributors. The projects it has undertaken also include the lighting project of the Beijing Museum in China.

All in all, if you want to enter the European LED lighting market, you must know yourself and each other in order to be victorious. Understand your own niche and then conduct market analysis and investigation, use different aspects to find out the company’s positioning in the lighting supply chain, and decide the main market and direction. Then find possible channels or customers, and establish long-term partners to win in the market