Lighting Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Global Lighting Market Trends and Insights

Surge in Post-COVID Retrofit Demand for LED Lamps and Luminaires across Asia

Recent retrofit programs have created unprecedented pull in the lighting market as first-generation LEDs near end-of-life. Global secondary-replacement volumes hit 5.8 billion units in 2024, contributing to overall demand of 13.4 billion units. India’s UJALA reduced bulb prices to INR 70-80, proving that large-lot procurement can expand access while preserving manufacturer profitability.^{[1]Press Information Bureau, “UJALA Completes Seven Years of Energy-Efficient LED Distribution,” pib.gov.in} Commercial property owners are now upgrading fluorescent troffers and HID high-bays to comply with mercury restrictions. Quality differentiation is widening; buyers compare lumen-maintenance and warranty terms more closely, benefiting brands that demonstrate total-cost-of-ownership gains. The sustained retrofit wave secures a baseline growth buffer for the lighting market during macro-economic swings.

Smart-City Roll-outs Accelerating Connected Street-Lighting Deployments in Gulf Cooperation Council Countries

GCC utilities treat connected luminaires as the digital backbone for urban services. Dubai’s USD 1.9 billion automatic smart-grid restoration system integrates adaptive street-lighting to cut losses and support the emirate’s 100% clean-energy vision.^{[2]TradeArabia News Service, “Dewa Launches Automatic Smart Grid Restoration System,” tradearabia.com} Abu Dhabi’s municipal pilot shows 40-50% energy savings after replacing legacy poles with IoT-enabled LEDs. Integrated nodes host traffic counters, air-quality probes, and 5G small-cells, turning lighting furniture into real-time data hubs. Demonstration projects encourage neighboring cities to launch copy-cat tenders, widening the lighting market for controls, gateways, and cybersecurity services. Government guarantees also mitigate counterparty risk, making GCC infrastructure a coveted beachhead for global vendors.

Rapid Warehouse Automation Driving High-Bay LED Adoption in North America

Lighting consumes up to 76% of energy in conventional warehouses, so operators bundle LED retrofits with robotics and vertical-racking investments to hit payback targets.^{[3]Food Logistics, “Keep the Lid on Warehouse Energy Costs,” foodlogistics.com} Cases such as Kane Is Able show annual savings beyond 2 million kWh after high-bay conversions. Networked luminaires now link to warehouse-management software, dimming by zone when conveyors idle and brightening around automated picking arms to improve scan accuracy. The synergy between improved ergonomics and machine-vision performance further justifies premium fixture choices. Utilities across several U.S. states broadened rebate tiers in 2025, cutting installed costs by 15-20% and keeping the lighting market for high-bays resilient despite interest-rate pressures.

EU Ecodesign Regulation (EU) 2019/2020 Phasing-out Fluorescents

The fluorescent sunset has moved faster than the legal deadline because major lamp plants shuttered lines in advance to avoid stranded inventories. Retailers report LEDs capturing more than 95% of shelf space by mid-2025, and early adopters cite three-month payback periods in office retrofits. The regulation’s spill-over effect simplifies global portfolios; multinationals now design around LED only, lowering bill-of-materials through volume. Professional specifiers, however, flag color-matching concerns for graphics-critical environments, steering demand toward higher-end LED modules with tight CIE tolerance. Overall, the rule adds roughly 1.1 percentage points to the lighting market CAGR through 2027.

Slow-Moving Building Permits Dampening New Fixture Sales in Germany

German dwelling permits fell to 15,357 in April 2025, far below the pre-pandemic norm of around 20,000 units.^{[4]Trading Economics, “Germany Building Permits for New Dwellings,” tradingeconomics.com} Residential permits dived 38.65% year-on-year, and industry associations foresee a further 5% revenue slide in 2025. Each permit shortfall directly erodes fixture volumes because new construction specifies integrated luminaires upfront. Developers delay projects as mortgage rates hold near decade highs, and government targets of 400,000 new homes appear out of reach. For suppliers, Germany’s contraction partially offsets gains from retrofits in surrounding EU states, leaving the lighting market reliant on renovation rather than green-field growth during the medium term.

Lithium-Ion Price Volatility Inflating Smart-Solar Lighting Costs in Africa

Off-grid lighting schemes depend on affordable storage, yet battery pack prices oscillated 25–30% over 2024-2025 amid supply disruptions. Studies show hybrid street-lighting levelized costs of USD 0.106 /kWh when battery inputs are stable, but sensitivity analyses cut margins by half when cells spike. Ghana, Rwanda, and Morocco pivot toward recycling vehicle packs to buffer volatility, positioning themselves as regional hubs. Municipal buyers nonetheless defer tenders until price clarity returns, curbing near-term shipment growth even as long-term rural-electrification plans remain intact. Vendors serving the African lighting market therefore face lumpy order books and must re-price bids more frequently to protect cash flow.

Segment Analysis

By Product Type: Fixtures Drive Market Evolution

Fixtures controlled 77.6% of revenue in 2024, anchoring the lighting market as customers migrate from bulb swaps to integrated systems. Ceiling panels, pendants, and downlights lead space productivity upgrades in offices and malls, while high-bay fixtures ride warehouse automation spending. Street-lighting poles embed wireless controllers to harvest energy data for utilities. Decorative fixtures capture niche value in hospitality, leveraging advanced optics to blend design with low glare. Lamps, still vital to price-sensitive retrofits, hold 22.4% share but are ceding mix as fixture-centric renovations gain traction. The fixture segment’s 6.39% CAGR underpins a sizable portion of the lighting market size outlook to 2030.

Growth is reinforced by modular designs that simplify maintenance. OEMs now ship plug-in LED boards, letting facility managers swap engines without rewiring. Controls-ready fixtures also shorten project timelines; specifying teams can lock in both hardware and software within a single bill of materials. Replacement of aging fluorescent troffers in Europe stands out as a multi-year volume engine, while smart-city pilots in the GCC spotlight LED poles as digital-service gateways. Competitive differentiation revolves around thermal management, color consistency, and sensor fusion capabilities that future-proof the asset base.

By Light Source: LED Transformation Accelerates

LED units accounted for 69.4% of revenues in 2024, and their 6.42% CAGR through 2030 secures the technology’s dominance. Post-fluorescent bans leave LEDs as the default lamp, and economies of scale cut cost per lumen annually. Chip-on-board advances lift efficacy past 220 lm/W, lowering overall system wattage. LED share is even higher in new builds, where designers specify tunable-white engines and human-centric lighting to support occupant wellness. Fluorescent and HID categories trend downward except in niche sports venues awaiting retrofit budgets.

OEM roadmaps prioritize spectral tailoring; horticultural fixtures now allow dynamic red-to-blue ratios that optimize photosynthesis for lettuce, strawberries, or cannabis. Medical imaging suites request high-CRI LEDs to preserve color fidelity. As supply consolidates, vendors harmonize form-factors for global compatibility, thereby making LED modules interchangeable across luminaires. The shift reduces spare-parts complexity and underpins a more service-oriented lighting market.

By Application: Residential Leads, Horticulture Surges

Residential spaces held 31.4% of revenue in 2024, driven by bulk LED bulb roll-outs under government subsidy schemes and an uptick in smart-home retrofits. Voice-controlled dimming and circadian presets elevate perceived value, encouraging multi-room upgrades rather than one-to-one bulb swaps. Meanwhile, horticulture lighting posts the fastest expansion at 8.1% CAGR, propelled by Dutch greenhouse exporters and vertical farms in Japan . Tailored spectra shorten crop cycles, allowing growers to stack harvests and justify premium electricity budgets.

Commercial offices follow hybrid-work schedules, so owners invest in occupancy-sensed luminaires that dynamically adjust output to desk utilization. Retail chains seek uniform color temperature across global branches to maintain brand consistency, opening recurring revenue for commissioning services. Industrial plants favor high-bay LEDs with rugged optics and advanced surge protection to withstand power fluctuations. Infrastructure categories such as smart streets add IoT nodes for traffic analytics, ensuring diversified demand pools across the lighting market.

By Installation Type: Retrofit Dominance Continues

Retrofit projects captured 64.7% of 2024 volumes as an aging installed base hits end-of-life. Payback often lands within two years because energy rates remain elevated. Facility managers time upgrades to coincide with HVAC overhauls to minimize downtime. The retrofit wave lifts demand for dimmable drivers and wireless-ready sockets that piggyback existing wiring. Installers prize tool-less connector systems that let crews finish jobs faster, thereby lowering labor costs and driving more bids.

New construction, though smaller, expands at 7.1% CAGR. Emerging-market megaprojects specify connected lighting in planning documents, baking IoT capability into electrical blueprints. Industrial parks in Southeast Asia and logistics hubs in the Middle East illustrate this trend, rewarding fixture makers that offer unified dashboards for lighting, HVAC, and security. Despite Germany’s permit slowdown, broader APAC growth sustains the installation-mix balance and shields the lighting market from regional shocks.

By Sales Channel: B2B Channels Dominate

Direct/project B2B routes owned 59.8% share in 2024, reflecting the consultative sale cycle where engineers, contractors, and ESCOs co-design solutions. Large projects often bundle commissioning and multi-year service, securing annuity revenue. Specification teams rely on vendor software that simulates lux curves and daylight offsets, cementing brand preference early. Distributors then fulfill bulk orders while maintaining credit terms for contractors.

E-commerce grows at 7.8% CAGR as smaller enterprises and homeowners embrace click-to-ship convenience. Marketplaces offer side-by-side specification filters, narrowing the knowledge gap once bridged by showrooms. Hybrid models emerge: customers research SKUs online, then schedule virtual calls with application engineers before finalizing baskets. Brick-and-mortar outlets pivot to experiential centers showcasing connected-home platforms, sustaining foot traffic without shouldering inventory risk. The evolving channel mix obliges manufacturers to harmonize pricing and warranty policies across online and offline touchpoints to safeguard brand equity in the lighting market.

Geography Analysis

Asia-Pacific’s 46.9% slice of 2024 revenue shows the region’s dual strength in manufacturing and government-led adoption. India’s UJALA has dispensed 36.78 crore bulbs, shaving power demand by 47,778 million kWh and avoiding 3.86 crore t CO₂ each year. Chinese factories deepen cost advantage; Signify’s 200,000 m² Jiujiang plant became its largest LED unit, underscoring a supply-chain pivot toward on-shore efficiency. Japanese agritech projects deploy AI-lit greenhouses, anchoring a premium channel. Southeast Asian urbanization fuels public-lighting build-outs, adding runway for fixture suppliers and controls vendors.

North America blends mature replacement demand with automation-driven new volume. High-bay retrofits and connected office revamps offset softer residential remodels. Patent litigation, however, raises compliance overhead as Signify and others enforce smart-lighting IP. Europe’s pathway is regulation-led; the fluorescent ban boosts sales but Germany’s housing slump trims new-build pipelines. Southern European tourism hubs invest in façade and street-lighting makeovers, partially balancing northern weakness.

The Middle East & Africa region tops growth charts at 6.8% CAGR. Dubai allocates USD 1.9 billion to a city-wide adaptive grid, embedding over a million connected luminaires. Riyadh and Doha follow suit, standardizing Zhaga-based sockets to ensure vendor-agnostic upgrades. African municipalities value solar-hybrid poles but pause orders during battery-price spikes; recycling pilot zones in Morocco and Rwanda seek to localize pack refurbishment and stabilize supply. Latin America’s momentum hinges on anti-counterfeit enforcement; Brazilian tariffs on low-grade imports aim to protect domestic brands.