Indonesia LED Market Outlook to 2030

Indonesia LED Market Overview

• The Indonesia LED Market was valued at USD 1.5 billion. The market has been primarily driven by the need for energy-efficient solutions and the phasing out of conventional lighting systems. LED technology has penetrated various segments such as street lighting, residential lighting, and industrial lighting.
• Major players in the market are Philips Lighting, Osram GmbH, Samsung Electronics, PT Harapan Sejahtera, and Cree Inc. These companies dominate due to their established distribution networks, broad product portfolios, and technological innovation.
• The Indonesian government has intensified efforts to promote energy-efficient lighting solutions, with LED lighting currently making up about 10% of the lamp market. This initiative supports the country's goal of achieving 100% electricity self-sufficiency by 2025, enhancing access to sustainable energy sources across the nation.
• Java, the most populous island, dominated the market due to the rapid urbanization, higher energy consumption, and the presence of several industrial hubs. The governments focus on infrastructure development and the proliferation of smart city projects in cities like Jakarta and Surabaya have further solidified Java's dominance in the market.

Indonesia LED Market Segmentation

The market is segmented into various factors like product, application, and region.

By Product: The market is segmented by product into residential lighting, commercial lighting, industrial lighting, and outdoor lighting. Residential lighting held a dominant market due to the rapid adoption of LED bulbs in households. The demand is driven by government incentives and increased consumer awareness about energy savings.

By Application: The market is segmented by application into indoor lighting, outdoor lighting, and automotive lighting. Indoor lighting held a dominant market due to the growth of the construction sector, especially in residential and commercial buildings, has led to a surge in indoor LED installations.

By Region: The market is segmented by region into north, east, west, and south. North Indonesia led the market share due to the concentration of urban development and industrial zones. The presence of major cities, including Jakarta and Bandung, along with government infrastructure projects, has boosted the demand for LED lighting solutions.

Indonesia LED Market Competitive Landscape

• Samsung Electronics: In September 2023, Samsung showcased its advanced LED solutions at IAA Mobility 2023 in Munich. A key highlight was the PixCell LED technology, designed for autonomous vehicles, which offers high-precision lighting control with Full HD resolution on compact displays. Samsung aims to enhance vehicle communication with its Mini LED technology, supporting the rise of electric vehicles and augmented reality.
• Osram GmbH: In 2024, ams OSRAM launched the OSLON Pure 1414 at the Light + Building event in Frankfurt, showcasing enhanced LED performance for indoor and retail applications. The new generation provides superior luminous flux density and flexibility, optimized for architectural and stage lighting. This innovation offers higher efficiency and long lifespan under harsh conditions, driving market advancements.

Indonesia LED Market Analysis

Market Growth Drivers

• Government Energy Initiatives: In 2023, the Indonesian government launched a nationwide energy conservation program targeting a 30% reduction in electricity consumption across the country by 2025. As part of this, the Ministry of Energy mandated the replacement of conventional lighting with LED technology in over 200 cities, projected to save 4,500 GWh of electricity by the end of 2024. This initiative has led to a substantial demand for LED products, particularly in public infrastructure projects.
• Construction Boom and Infrastructure Development: Indonesia's real estate growth is propelled by rapid urbanization, with 53.7% of its population living in cities and an annual urban migration rate of 4.4%. Additionally, government initiatives like the 'One Million Houses' program aim to meet rising housing demand, having delivered 634,132 units by August 2023. LED lighting systems are now a standard in new constructions due to government regulations on energy efficiency.
• Retail Adoption of LEDs for Cost Savings: In 2024, Indonesia's retail sector, sales, increasingly adopted LED lighting systems to reduce operational costs. Large retail chains, such as Alfamart and Indomaret, implemented LED lighting in their new outlets, resulting in a 20% reduction in electricity expenses. This trend is expected to continue as more retail chains transition to energy-efficient lighting.

Market Challenges

• Supply Chain Disruptions: The global semiconductor shortage in 2023 affected the production of LED components, leading to supply chain disruptions in Indonesia. The manufacturing capacity for LED chips dropped by 30% in Q3 2023, causing delays in product availability and an increase in prices for consumers, which further strained market growth.
• Lack of Awareness in Rural Areas: Despite government efforts to promote LED adoption, rural regions in Indonesia still lag in awareness and usage of energy-efficient lighting. As of 2023, only few of rural households had switched to LED lighting, compared to urban areas, indicating a challenge in extending the markets reach to these regions.

Government Initiatives

• Investment in LED Technology: The Indonesian government is actively promoting the adoption of high-efficiency lighting technologies, including LEDs, as part of broader sustainability goals. The ADLIGHT project, which is focused on advancing Indonesia's lighting market, emphasizes the importance of energy-efficient lighting to reduce electricity demand and greenhouse gas emissions.
• Indonesia Government Energy Compact Initiative: Indonesia's government is committed to enhancing energy efficiency through its Energy Compact initiative, pledging over USD 122 billion to achieve Sustainable Development Goal 7 (SDG7) by increasing renewable energy to 23% by 2029. This includes promoting the use of energy-efficient LED lighting across households.

Indonesia LED Market Future Outlook

Future trends in the Indonesia LED industry include increased smart city projects, widespread adoption of OLEDs, expansion in automotive LED lighting, and greater integration of smart LED systems in industrial facilities.

Future Market Trends

• Increased Smart City Projects: By 2028, Indonesia is expected to see rapid growth in smart city initiatives, with over 15 cities implementing smart street lighting systems by 2026. These systems, controlled by IoT technology, will enable energy savings, driving further adoption of smart LED solutions in urban areas.
• Adoption of Organic LEDs (OLEDs): OLED technology, which offers superior efficiency and lifespan, is expected to become mainstream in commercial lighting by 2027. Government and corporate offices are projected to switch to OLEDs as part of their energy efficiency programs, with over 500 corporate offices expected to adopt OLED lighting by 2028.