Residential Lighting Fixtures Market

Market Overview

The global residential lighting fixtures market size was valued at USD 18,760 million in 2022. It is estimated to reach USD 30,634 million by 2031, growing at a CAGR of 5.60% during the forecast period (2023–2031).

Lighting fixtures are part of the light attached to the walls and are easily removable from the fixture. Lighting fixtures are considered an essential part of decorations and are illumination solutions that help to provide customized lighting to apartments, houses, villas, etc. The amalgamation of the internet of things has taken over traditional lighting fixtures with smart lighting fixtures. The smart bulbs are connected to Wi-Fi, which controls the brightness, warmth, and color options. There are various residential lighting fixtures available such as architectural, recessed, tracks, pendants, chandeliers, wall sconces, ceilings, and others.

Market Dynamics

Global Market Drivers

Rising Popularity of Lighting Fixtures among Smart Homes

The lighting fixture has gained lots of attention in modern residential lighting. Personalization of living space has become a significant part when it comes to lighting and home décor. However, the right level of lighting can not only help in completing tasks effectively but also affects the emotional state of mind. The right lighting color helps to bring out the best in home furnishings, such as wall color and overall home decor. These facts augment the demand for lighting fixtures for residential use.

Furthermore, now a day's, smart homes are built with modern smart lighting systems which are based on LED technology. This involves advanced drivers that have features such as dynamic spectral light reproduction. LED lights are becoming common in lighting fixtures because of their adaptability to a wide variety of settings and applications. Additionally, they can save money through use as they utilize less energy than conventional light bulbs. Such benefits with modern technology and the popularity of lighting fixtures are increasing for designing smart homes, which will fuel the market demand over the forecast period.

Increasing Investments in Home Decor and Swell in the Purchasing Power of Consumers

Since the last dynamic decade, the home industry has changed. Major companies operating in this field have taken initiatives with varying degrees of creativity and innovative thinking as the market is shifting significantly with more players entering the market. Lighting systems have been transforming within the home decor space for the last couple of years. In addition, people have moved from traditional to modern lighting systems with an emphasis on the creative and decorative use of lighting. Therefore, several players started investing heavily in modern home décor. On the other hand, the growing purchasing power of consumers is another factor driving the growth residential lighting fixtures market.

Global Market Restraint

Drawbacks with LED Integrated Fixtures 

A recent study suggested that more than 70% of the general-purpose lighting fixture market was tied to either LED-integrated fixtures or LED-ready fixtures. Though the market is expanding rapidly, there are some possible pitfalls with LED-integrated fixtures that can hinder the market's growth. Customers tend to choose fewer permanent installation alternatives since once the LEDs expire, the entire set becomes unusable after decades or merely a few years of use. However, merging the light source with the fixture means establishing an expiration date on the fixture itself. On the other hand, even if a customer finds feasible repair services and a replacement module, several fixture warranties do not last more than five years, and those that do may add considerably to the initial cost of the fixture, leaving customers on the hook for the cost to repair.

Global Market Opportunities

Rapid Urbanization in Developing Countries

The global urban population is projected to increase by about 60% by 2050. It is escalating at an exceptional rate, with around 2.5 billion people projected to live in cities within just over three decades. In addition, more than 90 percent of that increase will occur in the Asia-Pacific and Africa. As the sale of residential lighting fixtures is more concentrated in urban areas, these estimates predict healthy market expansion in the future period. Furthermore, some estimates show that by mid-century, 52 percent of the world's total urban population will live in the Asia Pacific region. Around 40 percent of this urban growth is expected to happen in cities with populations between 1 and 5 million. Thus, rising urbanization in developing areas, along with increasing disposable income projected to provide better growth opportunities to the market.

Regional Analysis

Based on region, the global residential lighting fixtures market is bifurcated into North America, Europe, Asia-Pacific, and RoW.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global residential lighting fixtures market and is expected to grow at a CAGR of 6.18% over the forecast period. This is due to the high population density in countries such as China and India, the rise in the number of house owners, increasing urbanization, rising standards of living, and growing disposable income. Furthermore, the development of smart buildings and the increase in government initiatives for smart city projects are boosting the adoption of lighting fixtures, thereby positively impacting the market's growth. For example, the Chinese government began implementing numerous innovative city initiatives. There is robust financial and institutional support from the central and local governments for making smart city initiatives. China is home to around 500 of the world's over 1,000 smart city pilot projects, including programs in large and small communities. This, in turn, drives the residential lighting fixtures market.

North America is anticipated to grow at a CAGR of 5.65% over the forecast period. Urban culture influences an individual's living style, contributing to the growth of sales of residential lighting fixtures products. The growing population, coupled with the rise in the construction of new buildings, is fueling the development of the North American residential lighting fixtures market. It is projected that the region's adoption of lighting fixtures will increase due to the rising demand for smart bulbs and fixtures due to the incentives provided by the US federal government to residential entities using energy-efficient lighting solutions. Furthermore, Canada is expected to grow at a faster pace during the forecast period. The growth in the region can be attributed to the rise in infrastructure development and investments across Vancouver and Toronto. In addition, the increasing adoption of advanced lighting fixtures across residential space drives regional market growth.

Europe region holds a significant share of the residential lighting fixtures market worldwide. The factors fueling the market's growth in Europe are a large amount of disposable money, an improved standard of living, and a more significant deployment of lighting fixtures solutions in residential sectors. Numerous smart city initiatives, many of which are only getting started in Europe, have been highlighted as effective and promising in light of the demographic changes. In addition, the increasing rate of smart city projects is indirectly anticipated to favor the growth of LED lighting, given the demand for smart and sustainable lighting products. It is prudent to mention that this trend has also been majorly boosting the market. In addition, the need for sustainable and energy-efficient lighting systems will further draw lucrative growth avenues for the Europe market in the ensuing years. Further, the key players are focusing on new product launches to sustain and strengthen their position in the Europe market.

The RoW comprises the Middle East and Africa and South America region. The government initiatives for creating awareness regarding lighting fixtures also bolstered the demand for residential lighting fixtures in the South American area. In Latin America, Brazilian Utilities' efforts to implement and evaluate efficient residential lighting technologies programs are analyzed to accumulate knowledge for future endeavors, thereby fueling regional market growth. In the Middle East region, the presence of several affluent Arab consumers who belong to royal families and desire elegant lighting products boosts the residential lighting fixtures market in this region. Furthermore, The Gulf Cooperation Council (GCC) is devoted to dropping its carbon footprint and electricity demand through 2025, with clearly established targets. One of the most accessible demand-side measures that can achieve this goal is to overhaul the lighting within buildings and at a city level, presenting the strong market potential for light-emitting diodes (LED) lighting fixtures in the region. Moreover, the growth of African cities is expected to propel the demand for these residential lighting fixture products.

Segmental Analysis

The global residential lighting fixtures market is bifurcated into source, product, and distribution channels.

Based on the source, the global market is divided into incandescent, fluorescent, and LED and OLED. 

The LED and OLED segment owns the highest market share and is anticipated to grow at a CAGR of 5.94% during the forecast period. LEDs are the most prominent choice of consumers and are recogniz

ed as the most feasible in residential applications. These lighting sources are also becoming increasingly common because of their energy efficiency and a variety of light colors. Additionally, it is observed that the interest of the population across the globe in controlling lighting within their facilities using their phones and smart devices is continuously growing.

Fluorescent lamps use less energy to produce the same amount of light and can last longer. The increasing demand for environment-friendly lighting technologies and increasing adoption of lighting products with extended shelf-life are expected to drive the fluorescent light sources in the market during the forecast period.

Based on product, the global market is divided into sconce, pendants and chandeliers, flush-mount lighting fixtures, portable lighting fixtures, bathroom vanity lighting, and outdoor lighting fixtures. 

The pendants and chandeliers segment is the highest contributor to the market share and is expected to grow at a CAGR of 6.53% throughout the forecast period. Chandeliers and pendants are a great mode to transform a space and create an inviting atmosphere. Traditionally, the distinctions between chandeliers and pendant lights were quite apparent as chandeliers housed multiple light sources, usually arranged in a branch-like system. In contrast, pendants suspend a single light source or cluster of lights from a single cord or chain. Although often considered in a different category than pendant lights, chandeliers are also technically a type of pendant light. Additionally, one of the most prominent trends driving the demand for these pendants and chandeliers is the growing use of mini pendants in rows over kitchen islands or bars as a substitute for the traditional kitchen island light.

A flush mount light fixture is a type of mounted ceiling light that sits flush with the ceiling. Several modern flush-mount lighting options are available commercially that are simple enough to be used in every area of the home. Modern flush mount lighting is gaining popularity and is considered practical as it is easy to install and can be used anywhere in the house, even in small spaces with low ceiling clearance. Moreover, as flush mounts are now being designed to incorporate LED lighting, creating more light sources and functional options for users, the product segment is also projected to gain considerable demand in the market over the forecast years.

Based on the distribution channel, the global market is divided into online and offline distribution channels. 

The offline segment owns the highest market share and is estimated to grow at a CAGR of 5.33% over the forecast period. The offline distribution of residential lighting fixtures includes channels such as authorized dealers, warehouses, wholesalers, and retail stores. A large part of the sale of lighting fixtures is generated from offline distribution channels. In addition, lighting fixtures for residential purposes are sold through electrical and home decor stores. Moreover, several supermarkets and hypermarkets also offer lighting fixtures for residential use. The growing number of retail stores worldwide is one of the major drivers for the growth offline distribution segment in the market.

The e-commerce platforms or online distribution channels have experienced enormous growth over the past decades. The e-commerce websites offer a wide range of products, including apparel, electronic appliances, consumer goods, food products, home décor, furniture, and other products. Many online stores also sell residential lighting fixtures to their customers. Online web stores such as Wayfair, 1stdibs, CB2, and Pier 1 offer their customers a wide range of furniture and home décor products. The growing internet penetration is driving the sale of online distribution channels for residential lighting fixtures.

Recent Developments

• November 2022- Greentech Earthings announced the debut of its new residential and commercial LED lighting. It is claimed that their products provide a higher quality of light than conventional incandescent lights and are less wasteful.
• December 2022- GE Lighting introduced its first-ever collection of decorative light fixtures and new pendants with LED lighting options. The new collection features three ornamental fixture families, including the Solon, Glenwillow, and Mentor, along with five pendant alternatives in an industrial style.