Before the introduction of LED lighting into the country, Vietnam on average consumed 200 million traditional light bulbs each year. Most of these traditional light bulbs were the less energy-efficient incandescent lamps. However, the continuous expansion of LED lighting into Vietnam over the past few years has led to the contraction of the local market for traditional lighting products. Conversely, Vietnam’s LED lighting market has seen robust growth. Based on LEDinside’s latest analysis, the penetration rate of LED lighting in Vietnam is expected to arrive around 35% in 2016.

“Vietnam’s LED lighting market enjoys faster growth compared with other Southeast Asian countries because of its relatively shorter base period,” said Roger Chu, research director of LEDinside. “Furthermore, Vietnam’s income per capita has been rising in recent years. The country’s LED lighting demand has gradually shifted as well, from infrastructure projects to the residential lighting market. However, infrastructure projects are still the main generator of local demand for now.”

Chu also pointed out that many international LED lighting companies have set up factories in Vietnam due to the low cost of labor. The Vietnamese government moreover has embarked on a series of large infrastructure projects that are made possible by the development aid from China, Japan and South Korea. These projects drive the local demand for outdoor LED lighting. Because public projects commissioned by the government tend to favor domestic companies, international LED lighting companies need to work with local counterparts to enter the country’s infrastructure market.

“Rising per capita income for Vietnamese people is also spurring the rapid growth in the local market for residential LED lighting,” Chu added. “For international LED lighting companies, they will have to work hard in brand localization and developing local market channels to in order to take advantage of the Vietnamese market.”