The lighting fixtures market in the Middle East and North Africa (Mena) is currently estimated to be worth $3.1 billion by Centre for Industrial Studies (CSIL), with positive expectations for 2018 and 2019.

Despite these positive expectations, the whole area remains challenging with tough competition and focus on price. Political and economic instabilities are among the key challenges the region is currently facing, a report titled The Lighting Fixtures Market in Mena said.

Weak oil prices and the consequent shortage in liquidity slowed down projects progress in general, be it the residential, commercial, educational, healthcare sector or other sectors, where lighting companies are involved.

Although the growing rates of the past are gone, the region still remains a big importer of lighting fixtures. With around $2.2 billion, imports satisfy over 70 per cent of the local lighting demand, the report noted.

Exports showed a relevant growth over the last two years and currently worth $426 million, accounting for 32 per cent of the total production.

COMPETITIVE SCENARIO

Competition is highly fragmented with local manufacturers or importers competing in the medium price segment. All large international brands are present in the area, especially the Italian and European companies, which dominate in the high end market segment.

World light market: positive trend

Asian companies have been progressively increasing in the last years and some of the major manufacturers achieved relevant market share in the region.

LED share on total lighting market in the Mena region is around 35 per cent in 2017 and CSIL estimates that it will reach 53 per cent in 2021. LED lighting market growth will be close to +15 per year. 50 leading players cover a share of almost 90 per cent of the market.

NEEDS FOR TECHNOLOGY

The Middle East and especially the GCC market is an excellent market for innovation.

However, the state-of- the-art of lighting technology significantly differs from one country to the other. Besides the general switching to LED there are further technical implications that have to be considered when approaching these countries. Products often need to be customised before installation.

For example, street lighting implies product durability in any environmental condition: ambient temperature reaching 60° in summer, humidity rate over 80% and intense dust or sand storms. Especially if the system is remote controlled through a CMS (control management systems) the internal cooling is crucial to allow a proper data transmission.

RETAIL BUSINESS ON THE RISE

Despite the Mena region is still a project-based market, the retail channel is progressively expanding and it is expected to improve its relevance in the coming years.

While sales of technical lighting are almost totally driven by contract and specifications, a significant part of residential lighting is sold by retailers located in the main urban areas.

Specialist lighting showrooms compete with furniture and furnishing chains like Home Centre (Landmark), IKEA and ID Design. All these brands are investing to increase their presence in the area.

The UAE-based Al-Futtaim Group, which holds franchise rights for IKEA, announced the opening of a fourth IKEA store in the UAE in early 2019 and plans for further expansion in Muscat, Oman, and Egypt, where openings of more stores are in the pipeline.

E-COMMERCE MARKET

As in the rest of the world, huge opportunities for lighting distribution come from the e-commerce. According to some reports, online transactions in the Middle East will increase by five times in the next three years. Although prospects for e-commerce market are huge, there are many obstacles restricting the progress, like: difficult logistics, bureaucracy, tariffs and changing regulations.