Decorative Lighting Market

Market Overview

The global decorative lighting market size was valued at USD 33.2 billion in 2022 and is projected to reach USD 47.6 billion by 2031, registering a CAGR of 4.1% during the forecast period (2023-2031). A primary reason driving the growth of the decorative lighting market is the rising demand for decorative lighting in the residential and commercial sectors.

Highlights

• Sconce accounts for the largest share of the market by product.
• Commercial applications influence market growth based on application.
• LED is the most common light source in the market.
• North America dominates the global market.

Decorative lighting refers to lighting fixtures and accessories primarily intended to improve a space's visual appeal. These lighting solutions go beyond just providing light and are frequently chosen for their decorative and artistic aspects. Decorative lighting can be utilized in domestic and commercial contexts, such as residences, hotels, restaurants, and retail locations. Rapid urbanization and rising disposable incomes are critical drivers boosting the decorative lighting market share and expanding consumer demand for decorative lighting goods.

As the home design and renovation trend has gained traction in recent years, people are increasingly investing in high-quality and elegant lighting systems to increase the visual appeal of their houses. The decorative lighting market is seeing an increase in demand as hotel and restaurant operators look for unique and cutting-edge lighting solutions to create a welcoming and pleasant atmosphere for their customers.

Market Dynamics

Global Decorative Lighting Market Drivers

Changing Consumer Lifestyle and Preference

Consumer lifestyles and tastes are major driving forces in the worldwide decorative lighting market. As individuals emphasize home aesthetics and interior design, there is a greater need for elegant and visually appealing lighting solutions. Consumer perceptions toward homes as more than merely functional environments have shifted in recent years. Interior design and décor are becoming increasingly important to homeowners in providing a comfortable and visually pleasing living space. According to a Deloitte poll, more than 70% of consumers are interested in tailored products and experiences. This need for customization extends to home design products such as light fixtures. To accommodate this need, manufacturers provide a wide choice of customizable solutions. According to Statista, the global market size of the home décor business, which includes decorative lighting, is expected to be over USD 112.6 billion in 2021. This chart emphasizes the enormous economic activity linked with consumer expenditure on home improvement products.

Furthermore, increased disposable income has cleared the door for a better lighting option. According to the National Bureau of Statistics, China's per capita disposable income in the first three quarters of 2023 was 29,398 yuan or approximately USD 4,094.71. This represents a 6.3% increase over the previous year. Further, With the rise of social media platforms like Instagram and Pinterest, customers can access a wealth of interior design inspirations and trends. People frequently discover new decorative lighting types and designs through these channels, influencing their purchasing decisions. According to Adobe Digital Insights research, 57% of customers get inspiration for their home decor from social media. This demonstrates the importance of internet platforms in changing customer tastes and cultivating a culture of ongoing research and acceptance of new design trends.

As a result, changing consumer lifestyles and preferences, motivated by a desire for improved home aesthetics, personalization, and exposure to design trends via multiple channels, play an essential part in the global decorative lighting market trend.

Global Decorative Lighting Market Restraints

High Cost

Decorative lighting fixtures, particularly those with unique designs, premium materials, or intelligent technology integration, are frequently more expensive. The initial expense of procuring and installing such lighting may be a significant commitment for consumers, discouraging some from purchasing these items. According to a Statista survey in 2021, the average spending on lighting fixtures per home in the United States was roughly USD 429. This cost covers both ornamental and functional lighting. Based on the relatively high average spending, consumers may be eager to invest in lighting solutions, especially ornaments.

Similarly, the most basic intelligent lights can cost as little as USD 10, while more complex bulbs can cost as much as USD 30 to USD 50. The cost of smart lighting fixtures ranges from less than USD 50 to several hundred dollars. It represents the substantial economic activity connected with technologically improved lighting solutions, frequently associated with more significant initial expenditures. As a result of the high initial expenditures, the target audience may be limited to a small market of people who value design, luxury, or advanced technology and are willing to make a considerable upfront investment. Budget-friendly choices may appeal to a different market sector than quality, high-priced decorative lighting.

Global Decorative Lighting Market Opportunity

Riding Demand for Smart Lighting

The growing popularity of smart home technologies presents an excellent opportunity for decorative lighting makers. Smart features such as app-controlled settings, voice activation, and interoperability with smart home ecosystems can attract tech-savvy customers. For example, in 2012, the LIFX LED light, which a smartphone can control, was introduced. In October 2012, Philips Hue, an iOS-controlled lighting system, was unveiled. Office spaces are also becoming popular smart lighting applications. In today's business world, owners and managers care more about their employees' well-being. Offices can provide bright illumination for their employees by switching to smart lighting. This improves their vision and reduces eye fatigue. Furthermore, the color of the light might lift spirits and bring comfort. 

Furthermore, global internet behemoths such as Google and Amazon have launched a slew of smart home goods customized to the Japanese market. Despite the gloom surrounding the country's decreased Y-o-Y penetration rate of traditional home appliances, the smart home market promises boundless possibilities in the future, owing to the increasing integration of AI-powered products and services in households. As a result, it is likely to present significant potential for market growth in the future.

Regional Analysis

The global decorative lighting market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global decorative lighting market shareholder and is estimated to grow at a CAGR of 4.2% over the forecast period. Power availability in every household in the United States, Canada, and Mexico is critical to adopting innovative decorative lighting techniques. Furthermore, the United States alone had 116,108 malls in 2018. Most malls invest considerably in decorative lighting to create an inviting environment. Similarly, the American Hotel and Lodging Association (AHLA) predicts that the hotel business in the United States will have 1.3 billion occupied room nights in 2023, slightly more than in 2019. Hotels use decorative lighting to provide a rich experience that relaxes and soothes occupants.

Asia-Pacific is anticipated to exhibit a CAGR of 4.4% over the forecast period. Due to their growing populations and rapid urbanization, decorative lighting has a substantial customer base in developing countries such as China, India, the Philippines, Indonesia, Sri Lanka, Bangladesh, and the Maldives. Most South Asian countries have achieved the distinction as decent vacation destinations, resulting in a rising number of well-decorated hotels and restaurants. This will, in turn, broaden the field of ornamental lighting. The Asia-Pacific region is a popular tourist destination for many visitors. The Asia-Pacific travel and tourism market will be valued at USD 163 billion in 2021. Thailand, Hong Kong, Vietnam, and Singapore are the most popular locations. As of 2022, the Asia Pacific area had over 300,000 hotels, according to OTA and DMO data. More than 75% of the total, or around 236,700 homes, are in Mainland China. The increasing number of hotels will likely fuel industry expansion in the region.

The European market accounted for a sizable revenue share. Increased installation of intelligent LED lighting to conserve energy and minimize energy consumption expenses in nations such as Germany, the United Kingdom, and France is driving market revenue growth in the area. Increased commercial building construction for office, retail, and entertainment uses is rising demand for smart lighting, boosting market revenue growth in this region.
In addition, regional enterprises are introducing new goods to meet consumer demands in design, energy efficiency, applications, and other functionalities. Osram Semiconductor of Germany, for example, developed a new Synios S 2222 product series in August 2020 with a compact dimension, high brightness value, and broad color spectrum of light source. The Synios S 2222 product line is available in six hues, and it offers high-quality tailored lighting solutions for various application scenarios, including architectural illumination.

Segmental Analysis

The global decorative lighting market is segmented based on product, application, light source, and region.

The market is further segmented by product into chandeliers, pendants, sconces, and flush mounts.

Sconce accounts for the largest share of the market.

Sconce

In 2022, Sconce leads the market with a more than 30% share. The segment's rise can be ascribed to its capacity to produce accent, ambient, and decorative lighting. Sconces are wall-mounted lighting devices that direct upward or downward, frequently accompanied by a shade or diffuser. These fixtures are multifunctional, providing both practical and decorative functions. Sconces are widely used to add ambient lighting and complement the interior design in corridors, bedrooms, and living spaces. Their use on walls enables imaginative lighting setups and highlighting architectural characteristics.

Flush Mount

During the forecast period, flush mount products are expected to grow at the quickest CAGR. Flush mount fixtures are ceiling-mounted lights that do not have a hanging or suspended element. These lights produce ambient lighting and are appropriate for places with low ceilings or limited space. Flush mounts are available in various forms, from plain and functional to highly ornate. They are frequently utilized in bedrooms, hallways, and other locations where a low-profile lighting solution is sought to keep the space streamlined and modern.

By application, the segment can be further bifurcated into Commercial and household.

Commercial applications influenced the market growth.

Commercial

The commercial application sector held the most significant market share. Commercial decorative lighting applications include using these fixtures in non-residential environments such as businesses, hospitality facilities, retail spaces, and offices. The primary goal is to improve the visual appeal of the commercial environment, create a pleasant atmosphere, and frequently contribute to the overall branding and ambiance of the area. Commercial applications often necessitate ornamental lighting that syncs with the space's branding, interior design, and utility requirements. Energy efficiency, durability, and compliance with safety laws are all important factors.

Household

Employing decorative lighting fixtures in domestic spaces such as homes, apartments, and individual rooms is called household application. The emphasis is on providing inhabitants with a comfortable and visually beautiful environment that considers their tastes, interior design themes, and lifestyle. A mix of practicality and beauty is frequently prioritized in household applications. Homeowners may value customization possibilities, ease of installation, and interoperability with home automation systems or smart home installations.

Based on the light source, the market is sub-segmented into LED, Fluorescent, and Incandescent.

LED is the most common light source in the market.

LED

LED-sourced decorative lighting will account for over 30% of the market in 2022. The use of light-emitting diodes as the principal source of illumination distinguishes LED decorative lighting. LEDs provide energy economy, a long lifespan, color selections, and control variety. LED technology has grown in popularity, making it a popular choice for various lighting applications, including ornamental fixtures. 

LED decorative lighting is well-known for its energy efficiency, durability, and ability to create a variety of colors. LEDs also help to achieve sustainability goals due to their decreased energy consumption and environmental impact.

Fluorescent

The principal light source in fluorescent decorative lighting is fluorescent tubes or bulbs. While fluorescent fixtures are less frequent in some residential applications, they are common in commercial and industrial settings due to their efficiency and ability to deliver even diffused lighting. Fluorescent lighting is well-known for its energy efficiency and low cost. It is appropriate for applications requiring a significant, evenly lighted area, such as offices, retail spaces, or industrial environments.

Recent Developments

• January 2024- Govee, a smart lighting and smart home innovation, introduced two new lighting products: the Govee AI Sync Box Kit 2 and the Neon Rope Light 2.
• January 2024- Luminis, an established innovator and manufacturer of specification-grade lighting solutions, introduces The Jaki series of interior and exterior luminaires. Jaki, a versatile assortment of wall, surface, and ceiling mounts, offers a consistent and polished appearance across a project.