Within the industrial LED lighting market, Dialight has historically focused on specific niches where hazardous location certifications are required. Within the last five years, Dialight has expanded its focus to include applications where its products can withstand extreme environments such as high heat, high humidity, shock and vibration, dust, water and other challenges but hazardous location certifications are not essential.
The global annual LED lighting market is reported to be approximately £50bn, with the largest share being residential at 39% and the industrial lighting market being £4bn.
Our recent internal analysis of the industrial LED market confirms that the niche currently served by Dialight products is in the range of £0.5bn and Dialight has about a 27% share of this market, with high market shares in the US and Australia and low market shares elsewhere. A study of price and feature elasticity of demand indicates that about a £2bn market would be available to Dialight if additional products could be developed that allow segmentation of the market by price, and development of products that specifically address the regional needs of customers versus continuing to have basically a global product line. We have significant opportunities to grow in the industrial lighting market by increasing our range of offerings to our existing customer base.
Dialight is focused on broadening its range of product offering to its existing customers in sites where we are already supplying lights for their hazardous locations. These types of applications include warehouses, lighter duty assembly or manufacturing applications, cold storage, distribution centres and other industrial environments. We have initially focused this expansion in geographical regions where we already have strong direct sales resources.
In parallel with development of our product strategy to address this expanded served market, we are developing plans for changes in the rest of the business to enable and support successful delivery of more significant growth, predominantly in our operational and engineering footprint. The key theme of our expansion plans is moving to a more regional structure in recognition that we need the speed that comes with proximity to our end markets and the fact that the industrial LED market has strong regional differences versus being a truly global market.
Share of existing LED market
The LED advantage
The clear advantages of LED technology are revolutionising the lighting market, with an increasing focus on total cost of ownership:
- Low energy consumption: LED lighting is four to five times more energy efficient than conventional technologies.
- Long lifetime: LED lighting lasts up to 15 years, which is 4 times the lifespan of compact fluorescent lighting and 10 times the lifespan of incandescent lighting
- Enhanced versatility: LED lighting is smaller and more durable and comes
in more colours than traditional lighting.