Lighting Services Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Lighting Services Category Overview

The global lighting services category is anticipated to grow at a CAGR of 4.5% from 2023 to 2030. Growth of the category can be attributed to rise in global infrastructure projects, innovations in lighting systems, favorable regulatory environment, emergence of Lighting-as-a-Service (LaaS) business model, high demand for LED lighting, and growing demand in applications such as interior design and photography. LaaS consists of a subscription-based service for lighting needs of businesses. Key advantages of LaaS include zero upfront costs, reduction in energy usage, enhanced employee productivity and safety, and improvement in building operations. Key factors restraining the category include increased inflation and economic slowdown, issues in maintenance, rising raw material costs, complexity in pricing structures, supply chain disruptions, and environmental concerns.

Key technological advancements driving the global lighting services category include smart lighting systems, Internet of Things (IoT) enabled lighting, Luminaire-level lighting controls (LLLC), wireless lighting, Li-Fi (Light-Fidelity) systems, Light Detection and Ranging (LiDAR) sensors, and lithium-ion batteries. LLLC consist of lighting control systems embedded with sensors and controllers enabling autonomous control. Benefits of LLLC include ease of installation, long-term flexibility, and reduction in energy costs. It is suitable for offices, classrooms, and commercial facilities that require lighting reconfiguration. Smart lighting systems contain LED bulbs that contain software which is used to automate lighting control. These systems can by controlled by mobile applications and provide energy efficiency, security, and convenience to end-users.

The lighting services category is fragmented and consists of a large number of global market players, turning the category to be competitive. Key players in the category set themselves apart by providing innovative technologies, offering customized solutions, optimizing service quality, engaging in strategic partnerships, adopting effective marketing strategies, having a strong digital presence, and emphasizing customer satisfaction in order to enhance their service portfolio and to stay competitive. Moreover, they are actively focusing on improving environmental sustainability by using energy-efficient lighting equipment. Additionally, key players are also focusing on improving the overall customer experience by offering tailored pricing plans, flexibility and scalability of services, providing end-to-end services, and focusing on end user experience. Buyers in the category possess high bargaining capability owing to an extensive supply base.

Labor, equipment, wiring and components, maintenance and repair, licensing and compliance, and other costs are the key components of this category. Other costs include transportation and logistics, rent and utilities, sales and marketing, insurance, and taxes. Labor and equipment account for the largest share of the cost structure. A prominent pricing structure used in lighting services is fixed-price structure, which guarantees that a service provider will receive the approved sum of money specified in the contract and have a predetermined, predictable pricing for the services indicated. Another type of pricing structure is based on time and materials, in which the price is decided by the cost of materials and the amount of time needed to finish the task. This pricing structure is usually adopted when the time and resources required for a particular service cannot be realistically concluded beforehand. An FTE-based pricing structure is also used in this category, where the service provider decides the pricing based on the headcount of resources working on the project. Additionally, service providers in this category may also use value-based pricing, wherein the rates are decided based on the consumer’s perceived value of the service.

Asia Pacific dominates the global lighting services category, holding a significant portion of the global market share. Key driving factors for this region include presence of several large-scale vendors in China, rise in the number of smart city projects, increase in government initiatives to promote energy-efficient lighting systems, and emergence of LaaS. Key driving factors in developed regions such as North America and Europe include presence of large-scale companies, adoption of innovative technologies, and high usage of energy efficient products. Asia Pacific is also expected to be the fastest growing region during the forecasted period due to a surge in the number of commercial facilities that require lighting, rising usage of LaaS model, and rise in the number of providers of lighting services. Comparing the prices charged by various service providers, assessing service capabilities based on type of lighting equipment, evaluating the experience level of service providers, comparing technologies used in lighting equipment and service provision, comparing the lead time of various service providers, measuring service quality based on customer testimonials, and checking adherence to environmental and safety norms are some of the best sourcing practices considered in this category.

Lighting Services Procurement Intelligence Report Scope