작성일자: 2013.4.1

작성자: 하노이 무역관 Ms. Do Minh Thu (hmthu.kotra@gmail.com)

 

 

1. Overview of lighting industry in Vietnam

 

□  Market demand for lighting in Vietnam

 

 ○ Vietnam is recently regarded as the most promising emerging nation as an economic powerhouse. The annual economic growth rate is estimated at 8~11% in the period 2011~2015 and the demand on infrastructure building and upgrading is continually increasing. It is estimated that Vietnam infrastructure industry value and construction industry value will double from 2010~2014. The total construction industry value will increase to US$14 billion by 2014 from US$7 billion this year; among which, infrastructure industry value will increase to US$6 billion from US$3 billion this year.

 

No.	Kind of infrastructure		Area/length (2011)
1	Houses		22 million houses/ 1.4 million ㎡
2	Industrial area ~283 industrial zones Hundreds of provincial industrial area		76,000 ha
3	Road	National road	17,300㎞
		Provincial road	27,700㎞

          Source: Ministry of Transport, Ministry of Construction

 

 ○ The urbanization rate in Vietnam is forecasted to increase to 45.2% from the current 27%. In the period 2010~2020, Vietnam will need to develop 364 million sqm of housing space in urban areas, meaning some 36 million square meters per year. The gradual urbanization together with the high-speed economic growth greatly stimulates the demand of the related construction & building; HVACR; and fire & security equipment, material, system, products and technology.

 

 ○ The rapid development of infrastructure, commercial building construction and residential building construction has created a huge market for street lighting, commercial and residential lighting in Vietnam. As lighting value is estimated at 2~3% of construction value for a building with some elaborate cases going up to 10% of the total construction value. The annual lighting market in Vietnam is estimated at an average (6%) of US$280 million in 2010 and doubled by 2014.

 

 ○ Lighting account for 35% of energy consumption in Vietnam now, it is nearly double in percentage compared with other countries. Therefore, more use of energy efficient products in Vietnam would help the country cope with future electricity shortages. With the government support, Vietnam has rolled out to the ‘Green’ lighting in line with the global trend of energy & cost saving in the fields of street and indoor lighting, transportation sector, interior &exterior decorative, residential, office, retail Areas and industrial parks.

 

 ○ Currently, 70% of the lighting products in Vietnam are imported from foreign countries like USA, Japan, Germany, UK, Italy, Korea, Taiwan, China, while a number of Vietnamese manufacturers produce and supply lighting products only for domestic and a small portion for export. Vietnam's lighting industry is considered as a multibillion dollar market potential.

 

□ Major lighting products in Vietnamese market

 

 ○ Incandescent lamps

 

 

  - Incandescent lamps have been used in Vietnam for a long time and they used to be very popular among consumers. About 5 years ago, Dien Quang and Rang Dong are the two major manufacturers of this market and these companies share approximately 78% of the whole market. The remaining part belongs to other producers and illegally imported products from China.

  - Recently, due to the shortage and rising price of electricity, energy saving is becoming a big concern of the government and the citizens. Incandescent lamps are discouraged as they have low energy efficiency (around 90% of the energy is for heating). Vietnamese government even ran a project called ‘Phasing out incandescent lamps through lighting market transformation in Vietnam’.

  - Noticeably, according to the Vietnamese national program to save energy, from 1st January 2013, importing and manufacturing incandescent lamps with the power over 60W will not be allowed. As the demand is decreasing, all of domestic producers have to reduce and stop their production of this type of lamp. At present, both of the two largest manufacturers of lighting products, namely Rang Dong and DienQuang, have already stopped producing incandescent lamps.

 

 ○ Fluorescent lamps

 

 

  - Fluorescent lamps are becoming more and more popular in Vietnamese lighting system. Only in households, there are 55 millions fluorescent lamps. Due to the increasing demand, most of lighting companies are now producing fluorescent, especially energy saving fluorescent lamps. Especially since 2006, the national program of replacing incandescent lamps with energy saving lamps has led to the more investment of lighting companies. Domestic producers are dominating the field as the price of domestic products is 10~15% cheaper compared to foreign imported compact (mainly from China). DienQuang and Rang Dong are also two big producers in fluorescent lamps production.

  - In Viet Nam at the moment, there are 4 companies producing compact fluorescent lamps: Rang Dong (1.5 million lamps/year), Philips Vietnam (6.5 million lamps/year), PG Lighting Hai Phong (6 million lamps/year) and Dien Quang (6 million lamps/ year). With more than 30 kinds of products, compact fluorescent lamps can meet the demand of the market. Compact lamps are not only used in civil lighting but also other fields of lighting such as industrial, public or decoration lighting. In public and industrial lighting, PG lighting has developed PG compact with big productivity output which can be used to replace mercury pressure burners. The new compact lamp can save 50% of energy and has the price of 95% of a mercury pressure burner. Followings are some kinds of normal fluorescent and compact fluorescent lamps in the market.

 

 ○ LED lamps

 

 

  - LED lamps have been used for a long time in Vietnam, but mostly as decoration lamps for advertisement projects or as a part of electric equipments. However, recently, with the advantage of energy saving and high lumen and environment friendliness, LED lamps are getting familiar in Vietnamese market in the field of civil lighting or public lighting.

  - Most of LED lamps are imported from Taiwan and China via trading companies. However, the use of LED lamps in civil lighting is still limited due to their high price. The price of a household-used LED lamp is at least US$ 11~12, about 10~15 times higher than a fluorescent or compact lamp.

 

 

2. LED lighting market in Vietnam

 

□ Market size and trend

 

 ○ In recent years, lighting industry in Vietnam is considered attractive to potential domestic and foreign investors. In other words, Vietnam lighting market has entered a golden age. Since the Government of Vietnam has been advocated replacing traditional lamps with modern LED lights, which is more energy-saving and environmentally friendly, it can be said that the potential and investment opportunities for lighting areas in Vietnam are huge, especially the LED light market. Value of Vietnamese market for LED lighting products may reach a thousand billion USD in 2020 and the number of LED lamps used may account for 50% of the whole market.

 

 ○ According to the report of Public Lighting Performance project of the Institute of Science and Technology, Vietnam’s energy consumption is three times higher than 10 years ago and in the next few years, this figure will be 16~17 percent higher. Using LED lighting products to replace the compact fluorescent and incandescent lamps are encouraged in order to save at least 40% of electricity consumption for lighting system in big cities.

 

 ○ When first introduced to Vietnam, like in other countries, LED technology was mainly used for traffic lights and in advertisement industry. Offering outstanding advantages, LED lamps were quickly and widely applied for bill boards. LED billboards can be seen nearly everywhere: showrooms, waiting halls, receptionist’s booths, greetings ads, street billboards, etc. LED lamps are being used for both interior and exterior decorations, especially in restaurants, hotels and festivals.

 

 ○ LED technology also proves to be useful for street lighting, gradually replacing incandescent bulbs in traffic lights. In 2008, LED lighting systems were installed at Han River Bridge and Thuan Phuoc Bridge, which are now regarded as symbols of Da Nang. This is the first application of LED technology in public lighting in Vietnam. LED lighting does not only create highly aesthetic atmosphere but also saves much power.

 

 

 ○ Using LED lamps instead of incandescent bulbs, however, is still unfamiliar to Vietnamese. Only a few have applied this technology. Da Nang City has recently replaced 55 HPS sets with LED lamps, HaiPhong City 12 sets.  Can Tho was the first to experiment with LED lamps using solar power.Hoa Lac high technology park, Hanoi, has installed LED lamps using wind turbines and solar panels for outdoor lighting. 1000W LED lamp set has luminescence efficiency of 75㎖/W, lighting ability equals to HPS 150W (about 3500 lumen) and life span of 1000 hours. Using 54W solar panels and wind power engine WTG-300W, this LED lighting system can last for 20 years.Recently, on April 28th 2010, in hi-tech park in Ho Chi Minh city 28 street lamps were installed on Nguyen Hue road. These lamps are 160W LED bulbs using solar and wind power, 400W equivalent in brightness compared to normal bulbs.

 

 ○ Lighting and display are demanded for both household usages and commercial purposes (entertainment, advertisement or public decorative lightings). The total amount demanded each year is as followed:

 

  - Lighting and Display End Users’ Demand generally grows over time. However, the rates are still fluctuating sharply.

  - Except for the sharp demand drop in 2009 (US$12.3 million), the volume (in selling prices) have averagely increase at the rate of 26.78%. Especially in 2010 and 2011, the rates have peaked at more than 80%.

  - In recent years, growth rate of lighting and display demand has stabilized within the 6.05% to 17.22% range. The anticipated growth rate for 2013 and 2014 is around 10.72% and the corresponding volumes are US$120.1 million and US$123.9 million.

 

Most popular LED lamps in Vietnamese market

Indoor LED Lamps
Products	Image	Power consumption		Price (US$)
LED Bulb Light		4W-6W-9W		7~9
LED Down Light		4-18W		10~15
LED Tube Light		10-20W		30~50
LED Panel Light		6-80W		100~300
Outdoor LED lamps
LED Street Light		90-150W	300~700
LED Underground Light		3-5W	90~120
LED Garden Light		5-10W	100~120

 

 

□ Demand trend of LED flood light

 

 ○ As long with the increasing demand on LED lighting equipment of all types, LED flood light products also witness a growing demand in recent years. In Vietnam, LED flood light are used in various fields, varying from street lighting to industrial lighting.

 

 ○ Vietnam’s mass urbanization processes seem to strongly affect the demand for lighting system and display used in highway and streets.

  - There are many different urbanization projects in major cities of Vietnam including Hai Phong (3), Da Nang (12), Ho Chi Minh City (43), etc., not to mention that Hanoi is carrying out a 20-year expansion plan with multiple housing and entertainment facilities.

  - In addition, there are other projects regarding LED lighting such as Truong Sa Lighting Project (Defense Strategies) and Ha Long Light Effects Plan (Lisemco 2).

 

 ○ Currently, in Vietnamese market, the most popular flood LED lights have the power consumption ranging from 10W, 30W to 50W. These types of LED lights can be applied to the illumination distance of 10 meters and less. When it comes to architectural lighting applications with lighting distance up to 50, 100, 300 meters; there are also high-power LED flood light of which the power reaches 300W, 500W and 600W.

 

 ○ Some popular LED food lights existing in Vietnamese market:

 

Product	Specifications
	Size (㎜)	CRI (Ra)	Power consumption (W)	Input Voltage (V)
	215x 178 x 68	65	30	85-265 VAC
	286 x 360 x 110	65	80	90-305 VAC
	290 x 237 x 182	65	50	85-265 VAC
	286 x 360 x 110	65	100	90-305 VAC
	286 x 360 x 110	65	150	90-305 VAC

 

□ Import statistics

 

 ○ In accordance with Vietnam Plastics Association’s data and KOTRA Hanoi KBC’s calculations, the annual dollar amount of products HS Code 940540 imported into Vietnam generally increases over time, even during the 2005~2011 period when the economic crisis is at its peak. By the end of 2011, the total import was estimated at approximately US$31.3 billion.

 

 ○ Regarding imported products, Vietnam mainly imports industrial lights, public lights and other kinds of special lights from Asian countries such as China, Singapore, Japan, Taiwan, etc. Among import market, China is the biggest supplier. The import volume from China has rapidly increased through year and reached US$ 9.7 million in 2011. China supplies various kinds of lights with diversified design and competitive price and is very popular in low income group of consumers.

 

 

 

 Source: ITC calculations based on UN Comtrade statistics

 

 ○ Korea is also a major player in the market of imported lighting products in Vietnam. The import value from Korea has seen a rapid increase in the period 2006~2011 with the annual growth rate of around 5%. In 2011, the value of LED lamps imported from Korea reaches US$ 31.3 million, ranked second in the whole market. This growing trend is estimated to continue in the next few years due to the high quality and competitive price of Korean products.

 

 ○ LED lights imported into Vietnam are utilized for different purposes including traffic lights, Car interiors, Households lighting, LED screen, Mobile devices and others (i.e.: decorative purposes). According to www.vietbao.vn, LED imports are structured as followed:

 

 

 ○ In accordance with the sided graph, most of the LED lights imported to Vietnam are used as supplements for other electronics products such as mobile devices.

 ○ Much less are targeted for outdoor and household lightings. This is a proof stating that the market size of imported civilian and commercial lightings is actually very small.

 ○ According to many experts, there is a 90% chance that the import structure is not going to be modified given the conditions that Vietnam inflation will not exceed 20% and the urbanization rate of the nation reside within the 17% to 25% (per annum) range.

 

 ○ The forecasted fraction of decorative, household and advertisement lighting ranges from 17% to 24% for the coming 2 years and increase to the 20% to 30% level in the 3 years that follows.

 

□ Import tariff

 

HS Code	Description	unit	MFN	ACFTA	AKFTA	ATIGA	VAT (%)
94.05	Lamps and lighting fittings including searchlights and spotlights and  parts thereof, not elsewhere specified or included, illuminated name –plates and the like, having a permanently fixed light source, and parts thereof no elsewhere specified or
9405.40	- Other electric lamps and lighting fittings:
9405.40.20	-- Searchlights	set	25	5	10	5	10
9405.40.40	-- Other spotlights	set	5	5	5	0	10
9405.40.50	-- Other of a kind used for lighting public open spaces or thoroughfares	set	20	5	7	0	10
9405.40.60	-- Other exterior lighting	set	20	5	7	0	10
9405.40.70	-- Non-flashing aerodrome beacons, lamps for railway rolling sock, locomotives, aircraft, chips, or lighthouse, of base metal	set	5	5	5	0	10
9405.40.80	-- Pilot lamps with fittings for electro-thermic domestic appliances of heading 85.16	set	10	5	5	0	10
	--Other:
9405.40.91	--- Fiber-optic headband lamps of a kind designed for medical use	set	0	5	5	0	10
9405.40.99	---Other	set	10	5	5	0	10

Note:

MFN: Most favored Nations (Korea belongs to this group of nations)

ATIGA: Asian Trade in Good Agreement

ACFTA: ASEAN – CHINA Free Trade Area

AKFTA: ASEAN – KOREA Free Trade Area

 

 

3. Useful contacts

 

1	Sunled Joint Stock Company
Contact person	Mr. Nguyen Hai Nam - Director
Mobile phone	+84-985 986 898
E mail	nam@sunled.com.vn
Business field	Importing and trading in LED lighting and table lamps, LED boards advertising
Address	No. 2, D2-2/ 95, Chua Boc St, Dong Da Dist, Hanoi, Vietnam
Tel	+84-4-8587 5221
Fax	+84-4-3647 2419
E mail	info@sunled.com.vn
Website	www.sunled.com.vn

 

2	ILIKE Lighting Technology Joint Stock Company
Contact person	Mr. Nguyen Xuan Tuan – Director
Mobile phone	+84-943 136 868
E mail	iliketuannx@gmail.com
Business field	Trading in LED lamps and low-energy equipments
Address	No. 63 Nguyen Cong Tru St, Hai Ba Trung Dist, Hanoi, Vietnam
Tel	+84-4-3557 9162
Fax	+84-4-3557 9219
E mail	iliketuannx@gmail.com
Website	www.denbanled.vn

 

3	Thang Long Light Service and Trading Joint Stock Company
Contact person	Mr. Tran Van Kien – Technical Director
Mobile phone	+84 972 999 359
E mail	thanglongneon@gmail.com
Business field	Public lighting system, lighting controlling equipments, switchboard, LED, solar energy products
Address	No. 113/438 Tay Ho, Hanoi, Vietnam
Tel	+84-4-3556 8182
Fax	+84-4-3553 8182
E mail	thanglongneon@gmail.com
Website	www.thanglonglight.vn

 

4	IHG Vietnam Import Export Joint Stock Company
Contact person	Mr. Do Nhu Hiep  – Director
Mobile phone	+84-902 090 286
E mail	ihgvietnam@gmail.com
Business field	LED/ other lighting system manufacturing and trading.
Address	551 Quang Trung Str., Phu La Wd., Ha Dong Dist., Hanoi, Vietnam
Tel	+84-4-3311 9209
Fax	+84-4-3311 9208
E mail	ihgvietnam@gmail.com
Website	www.thegioidenled.com.vn

 

5	Lighting & Urban Equipment Co., Ltd (Hapulico)
Contact person	Mr. Le Dong Giang – Import-Export officer
Mobile phone	+84-983 177 196
E mail	ledonggiang@gmail.com
Business field	Assembling and trading lighting products and services
Address	No. 30 Hai Ba Trung St., Hoan Kiem Dist., Hanoi, Vietnam
Tel	+84-4-3933 4083
Fax	+84-4-3933 2688
E mail	hapulico@hapulico.vn
Website	www.hapulico.com