Analysis of the Urban Lighting Engineering Market Development Outlook for 2024-2030
1. Overview of Urban Lighting Engineering Development
Before the founding of the People's Republic of China in 1949, there were very few lighting engineering projects in the country. After the founding, the nation began its recovery, and the lighting engineering industry gradually developed from scratch. Especially after the 1979 reform and opening-up policy, the development of lighting engineering in China advanced rapidly and achieved remarkable results. Looking back at the over 70 years of progress in China's lighting engineering industry, it can be divided into four major stages:
1979-1999:
2000-2007:
2008-2015:
2016 to Present:
Comprehensive Development Phase
Rapid Development Phase
Leapfrog Development Phase
Integrated Development Phase
2. Urban lighting engineering industry development trends
(1) Urban lighting development has entered a transformation phase
To enhance city image and create regional landmarks that boost tourism and consumption, local governments are leveraging large-scale projects and events. Through creative lighting designs that reflect a city's history, culture, and event characteristics, they are showcasing the uniqueness and diversity of urban nightscapes.
① Urban lighting needs to consider energy conservation and environmental protection while promoting urban economic development
With the introduction of relevant guidelines such as the "13th Five-Year Plan for Urban Green Lighting," the "14th Five-Year Plan for National Economic and Social Development and Long-Term Goals for 2035," and the "14th Five-Year Plan for Building Energy Conservation and Green Building Development," it is imperative to establish and improve the urban green lighting standard system. Actively promoting green lighting products like LEDs and accelerating energy-saving renovations in urban lighting are essential.
On this basis, the industry will gradually shift its focus from the pursuit of luminous efficacy, energy savings, and costs to the demand for light quality, health, and the lighting environment. Urban lighting design will not only fulfill functional requirements but will also emphasize social, economic, and service values centered on human needs. This aims to achieve a harmonious coexistence of "people, light, and environment," creating a healthy living environment and a comfortable nighttime lighting atmosphere, thus forming a sustainable and positive development model.
② Urban lighting needs unified planning and a greater focus on human-centered urban lifestyles
China's urban lighting has begun to take shape and is gradually developing towards systematization. On one hand, systematic construction allows for unified planning of the urban light environment, upgrading lighting standards by selecting appropriate nightscape lighting methods, correct light colors, light sources, and suitable brightness levels for illuminated surfaces to minimize light pollution. On the other hand, systematic operation can address issues like fragmented urban nightscapes and high maintenance costs for lighting facilities by integrating urban functional lighting with landscape lighting, achieving harmonious coordination in urban nightscape lighting. As urban lighting evolves towards systematization and digitization, urban lighting suppliers with single-service capabilities increasingly struggle to meet clients' complex and customized needs. Therefore, urban lighting integrated service providers with comprehensive service capabilities will become the development direction for future urban lighting enterprises.
(2) The rise of the night tourism economy is promoting high-quality development in urban lighting
Currently, the country is vigorously developing the night tourism economy to enhance domestic cultural and tourism consumption potential. Key long-term driving forces for industry development include "urbanization," "large-scale events," "night tourism economy," and "urban renewal." Culture is the soul of tourism, while tourism is the carrier of culture. Night tourism combines sound, light, and electricity to artistically showcase cultural heritage, effectively building regional cultural brands, tapping into consumption potential, and broadening the depth and breadth of cultural and tourism integration, ultimately driving economic development.
In August 2019, the General Office of the State Council issued opinions on further stimulating cultural and tourism consumption potential, clearly stating the need to "vigorously develop the night cultural and tourism economy." Similarly, the "14th Five-Year Plan for Cultural and Tourism Development" released by the Ministry of Culture and Tourism in April 2021 emphasized the importance of "promoting the night economy and constructing national-level cultural and tourism consumption aggregation areas." The goal is to build over 200 national-level night cultural and tourism consumption aggregation areas to expand the scale of nighttime consumption.
In recent years, various tourist attractions such as the Palace Museum, Nanjing Garden Expo Park, Yangzhou Slender West Lake, and Dalian Xinghai Square have become new hotspots for night cultural tourism. Moving forward, both the nighttime economy and the cultural tourism economy will remain crucial for the country to promote consumption and stimulate economic growth, with their rapid development expected to continue.
The night tourism scene imposes higher requirements on urban lighting design. The lighting environment for night tourism must focus on understanding and showcasing urban culture. In addition to requiring companies in the industry to provide cost-effective, practical, safe, and stable lighting solutions, there is also a high demand for original design capabilities and advanced design levels. Designers can highlight the most representative regional culture, history, and local customs by integrating lighting with urban cultural characteristics, thereby constructing or reshaping a unique urban image and stimulating new consumption vitality in the night tourism sector.
(3) The demand for road lighting and "multi-pole integration" will continue to grow steadily
In the urban lighting industry, road lighting is primarily applied to first and second-level roads, connecting political and economic centers and important industrial zones, or busy suburban highways. With the increasing urbanization and the expansion of core mid-to-large cities, existing transportation infrastructure is struggling to handle the growing traffic and transportation flow. Over the past decade, the mileage of first and second-level roads in China has steadily increased to match urban development.
As people's overall demand for urban lighting rises, the concept of smart development in urban lighting is no longer limited to just smart lighting. As a key component of urban lighting, smart light poles are a new type of information infrastructure that integrates various cutting-edge technologies and applications based on the distribution of urban roads and streets, following the "co-construction and sharing" principle. They play a role as "peripheral neurons" in smart cities. Smart light poles feature a three-in-one system of "network, points, and poles," capable of collecting, publishing, and transmitting information across various sectors, including lighting, public safety, municipal services, meteorology, environmental protection, and communication. This forms a smart sensing network that enables precise management across urban sectors and the intensive utilization of urban resources.
(4) Operational and Maintenance Services in Lighting Engineering Will Become a New Profit Model
With the rapid development of IoT technology, the popularity of smart lighting continues to grow. Due to its characteristics of safety, energy efficiency, comfort, convenience, and high efficiency, the market acceptance of smart lighting products and systems is increasing. Smart lighting, along with its intelligent development, will be widely applied across various sectors of the lighting industry. Advertising management for smart light poles, product leasing, and subsequent operation and maintenance can all become viable profit-generating avenues for lighting engineering projects.
(5) Increasing Industry Concentration
Although the urban lighting industry has a large market size and very low concentration, recent regulations, such as the "Opinions on Further Strengthening Government Procurement Audit Work" and the "Government Procurement Law," have standardized the bidding process in the urban lighting sector. The requirements for bidders' qualifications, project experience, revenue scale, number of professionals, and lighting design proposals have become increasingly stringent. Furthermore, as urban lighting trends toward digitalization and low-carbon development, the technical and financial barriers for new entrants in the industry are rising. Consequently, the concentration of the urban lighting industry is expected to increase in the future.
3. Barriers in the Urban Lighting Engineering Industry
(1) Qualification Barriers
In China, the market entry system and graded management apply to enterprises engaged in urban lighting engineering design and project construction. Companies with different qualification levels can undertake corresponding project types. The main qualifications in the lighting engineering field include:
A. Urban and Road Lighting Engineering Professional Contracting Qualification: This qualification is aimed at enterprises involved in lighting engineering services. To obtain this qualification, companies must meet requirements related to engineering experience, technical equipment, and specialized technical teams. Enterprises with a first-class qualification can undertake various urban lighting projects.
B. Specialized Lighting Engineering Design Qualification: This qualification is for companies engaged in lighting engineering design services. To obtain this qualification, enterprises must meet multiple criteria, including lighting engineering experience, technical conditions, and the management level of professional personnel. Only companies with a first-class qualification can carry out specialized design for medium or large-scale lighting projects.
C. Electronic and Intelligent Engineering Professional Contracting Qualification: This qualification is focused on enterprises involved in the construction of intelligent lighting engineering. Companies must meet requirements concerning engineering experience, technical conditions, professional personnel, and management level to acquire this qualification. Only first-class qualified enterprises can undertake medium or large-scale electronic and intelligent lighting engineering construction.
The administrative licensing system for qualification certificates and restrictions on project bidding conditions increase the difficulty for new enterprises to enter the industry. This is particularly challenging since many downstream clients are government entities and their infrastructure construction platforms, which often require urban lighting companies to possess “double first-class” qualifications along with extensive experience and technical capabilities. As a result, smaller enterprises or newly established firms face high qualification and entry barriers when trying to secure projects.
(2) Performance and Brand Barriers
In recent years, there has been a noticeable trend towards the large-scale and expansive nature of lighting engineering projects. As lighting projects are considered infrastructure and often cater to significant events such as political functions, diplomacy, and celebrations, there are typically high quality standards required for construction. Therefore, during the bidding process, factors such as the company's project quality and fulfillment capabilities must be comprehensively evaluated, as performance directly impacts a company's bidding eligibility and competitiveness. Thus, performance and overall strength are critical constraints for entering this industry.
Companies in the industry generally need to provide professional services across various areas, including project planning and design, product research and supply, project construction, and post-project management and maintenance. Factors such as company size, financial strength, research and design capabilities, project control, quality assurance, and construction timelines all determine brand value. For new entrants into the industry, establishing competitive customer relationships within a short timeframe is challenging; building a brand takes time. New companies lacking performance and brand advantages will face obstacles in the competitive landscape.
(3) Barriers in Lighting Technology
Urban lighting project design is diverse and complex, requiring cultural and artistic connotations. This demands that companies possess rich artistic and cultural cultivation as well as strong technical capabilities in deepening design and construction. The level of design and construction techniques reflects the competitiveness of a company and poses obstacles for new entrants. As the industry develops and overall technical standards improve, the hardware sector requires customized development and integration of upgraded technical units, while the software sector needs to master multiple technologies. New entrants must accumulate technical expertise over an extended period to gain proficiency.
(4) Financial Barriers
Urban lighting projects usually require the payment of a bidding deposit before the bidding process, a performance bond before construction, and various expenses related to project turnover funds during the construction phase. These expenditures are closely related to the scale of the project, with larger projects requiring even more funding. Additionally, the urban lighting industry is characterized by long payment cycles and slow capital turnover, making it challenging for new companies to meet the financial demands of projects and gain market share quickly, especially when it comes to undertaking large-scale projects.
(5) Talent Barriers
Due to the influence of technical barriers in the industry, there exists a certain barrier related to human resources. The development of enterprises in this sector requires a variety of talents in research and development, design, technology, management, and marketing. Technical personnel not only need to have knowledge of circuit control design and lighting but also must possess rich experience in demand research and planning design. Currently, China has not yet established an effective training system for industry talents, resulting in a shortage of technical and managerial personnel, which necessitates that companies cultivate talent internally. New entrants in the industry find it difficult to build a professional team in a short period.
4. Competitive Landscape of Urban Lighting Engineering Industry
In the field of urban lighting engineering, although China's urban lighting engineering industry has a large output value, it is characterized by a multitude of companies and low market concentration. The market share of individual companies is relatively small (usually not exceeding 0.2%), and there has yet to be a dominant leader in the industry.
In terms of product manufacturing, the road lighting manufacturing sector is primarily concentrated in regions such as Gaoyou, Jiangsu; Chengdu, Sichuan; and Jinan, Shandong, with a notable industrial cluster effect. However, there are many small enterprises within this sector. Based on brand recognition, production and sales scale, and marketing channels, the domestic road lighting manufacturing industry can be roughly divided into three tiers:
First Tier: National road lighting manufacturers with high brand recognition and marketing channels that cover most regions of the country. These companies offer a comprehensive range of road lighting products, possess relatively advanced technology and craftsmanship, and maintain strict quality control, earning customer trust.
Second Tier: Regional road lighting manufacturers that rely on their local markets and have a certain level of market influence in their respective regions and surrounding areas.
Third Tier: Smaller companies that are numerous but lack independent brands. These firms either have limited sales coverage or engage in OEM (original equipment manufacturer) work, resulting in a small market share. They generally have weaker quality control capabilities, making it difficult to meet increasingly stringent customer demands for product performance and quality.
Looking ahead, as domestic standards for road lighting manufacturing become stricter and trends shift toward "multi-functionality" and "smart technology," a significant number of smaller, lower-technology, and poorly controlled quality enterprises are likely to be eliminated from the market. In contrast, well-established brands with a comprehensive product range and stable quality will lead industry development through robust optical design capabilities, strict product quality control, and quick responses to consumer demand and product iteration. Overall, the business revenue and profits within the industry are increasingly concentrating among leading enterprises and are in a rapid growth phase.
