Commercial Lighting Market Size, Share, Industry Report 2032

Report Description

Commercial Lighting Market

The global commercial lighting market size was USD 15 Billion in 2023 and is projected to reach USD 45 Billion by 2032, expanding at a CAGR of 21.2% during 2024–2032. The market growth is attributed to the increasing awareness of the advantages of smart lighting solutions and the growing number of government regulations regarding the adoption of energy-efficient lighting solutions.

Commercial lighting serves the purpose of providing sufficient illumination for various activities and tasks conducted within commercial spaces. This encompasses general lighting for overall visibility, task lighting for specific work areas, and accent lighting to highlight merchandise or architectural features. Customized commercial lighting solutions are tailored to suit the needs of different facilities and their operations, taking into account factors such as maintenance requirements, warranties, and brightness levels.

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Certification of commercial lighting products is overseen by regulatory bodies such as the International Electrotechnical Commission, the American National Standards Institute, and China Compulsory Certification. Once manufacturers obtain the necessary approvals, they sell, import, export, and utilize the products in various business and service settings. Several governments across the globe are boosting the global demand for smart lighting systems through initiatives such as smart city plans and projects.

• In February 2021, Signify launched the Philips Smart Light hub in Chennai, offering customers a hands-on experiential tour of their products. Spanning over 2200 sq. ft., the hub showcases more than 400 SKUs of smart lighting products, including Smart Wi-Fi LED lights, modular COB range, magnetic tracks, LED strips, and decorative lights for both indoor and outdoor applications.

Impact of AI on the Commercial Lighting Market

Lighting systems utilizing artificial intelligence enable precise adjustments, ambient lighting, and customizations by dynamically altering lighting levels, color, temperature, and distribution according to variables such as occupancy and natural light levels, thereby maximizing energy efficiency. AI-based lighting systems optimize and fine-tune light parameters based on indoor environments, enhancing user experience. Automation networks of lighting components communicate and configure themselves without human intervention. This automated commissioning process reduces the time required to commission new lighting installations.

Commercial Lighting Market Dynamics

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Major Drivers

Increasing investment in the construction of new and upgraded commercial centers is the major driving factor for the market. The demand for commercial lighting rises alongside the expansion of new commercial centers and administrative buildings. Many countries globally are investing in expansive commercial centers to demonstrate economic progress or attain international prominence. Moreover, old structures often fail to meet modern commercial needs, resulting in demolitions and the creation of new centers.

• In December 2023, India embarked on the construction of a new international airport in Mumbai. With nearly 60% of the project completed, the facility is scheduled for inauguration in December 2024.

Existing Restraint

The substantial expense associated with LEDs poses a notable challenge in the commercial lighting market, impeding their extensive adoption across diverse industries and applications. Smart LED lighting manufacturing entails intricate processes and requires specialized materials, leading to elevated production costs as compared to traditional mercury lamps. The initial capital outlay and ongoing operational costs linked with LED-based systems are viewed as prohibitive, deterring potential customers from embracing this technology.

Emerging Opportunities

Increasing utilization of smart commercial lighting is driving the product demand as businesses and institutions are progressively exploring innovative avenues to cut costs and conserve energy. Smart commercial lighting offers an effective means of remotely controlling energy usage. These systems leverage digital technology and software connected to a centralized platform, enabling operation through smart devices such as computers, laptops, tablets, or smartphones.

Scope of the Commercial Lighting Market Report 

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report. 

Regional Outlook

In terms of region, the commercial lighting market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific held a major share of the market in 2023, due to the presence of key manufacturing hubs such as China, Japan, South Korea, and India, particularly in the electronics sector.

Commercial lighting demand in these countries is propelled by stringent regulations on emission standards, the pursuit of enhanced fuel economy, and sustainability concerns. Additionally, rapid urbanization and infrastructure development contribute to the emergence of new commercial establishments such as buildings, shopping centers, hotels, and transportation hubs. Furthermore, there are plenty of opportunities for commercial lighting applications in these counties, as urban populations increasingly seek efficient and sustainable lighting solutions to enhance productivity and comfort in commercial settings.

• In March 2021, Signify launched the pioneering tailor-made 3D printed luminaires in India, supporting a circular economy initiative. Additionally, the company established a design lab in Noida and a 3D printing facility in Vadodara.

The market in North America held a sizable share of the market in 2023, driven by various factors such as technological advancements, energy efficiency regulations, and infrastructure development. In recent years, there has been a notable shift towards energy-efficient lighting solutions, including LED lighting, driven by initiatives aimed at reducing energy consumption and carbon emissions.

Government regulations and incentives promoting the adoption of energy-efficient lighting have further accelerated this trend. Moreover, advancements in smart lighting technologies have revolutionized the commercial lighting sector in the region. Smart lighting systems offer enhanced control, flexibility, and energy savings through features such as automated dimming, occupancy sensing, and remote monitoring.

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Commercial Lighting Market Segment Analysis

Type Analysis

Based on type, the commercial lighting market is bifurcated into lamp and luminaries. The luminaries segment held a major market share in 2023, as these are widely employed in the commercial lighting industry to illuminate expansive areas. Luminaires, encompassing various types such as downlights, floor lamps, troffers, and pendant lights, typically incur higher costs as compared to standard LED bulbs, catering to diverse applications. The key driving forces behind this segment growth include the rapid advancement of smart cities and the escalating demand for sustainable, energy-efficient, and intelligent lighting solutions.

The lamp segment held a sizable share of the market in 2023. These lamps are available in a range of light sources, including high-pressure & low-pressure sodium vapor, incandescent, tungsten-halogen, fluorescent, compact fluorescent, mercury vapor, metal halide, and LED lamps. A traditional filament bulb consists of a filament serving as an electrical conductor, emitting light when current passes through it. These bulbs are categorized into incandescent and halogen lamps.

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Lighting Type Analysis

On the basis of lighting type, the market is divided into LED-based and traditional. The LED-based segment is projected to achieve a high compound annual growth rate (CAGR) during the forecast period, owing to its widespread adoption as one of the dominant technologies in commercial lighting applications.

LED lights are highly energy-efficient, converting electricity into visible light more efficiently than traditional lighting technologies. They consume significantly less energy, resulting in substantial cost savings on energy bills for commercial establishments. In recent years, there has been a surge in the demand for LED lighting due to the increasing concerns about environmental degradation and energy conservation. LED illumination is cost-effective and reliable, offering a multitude of advantages over incandescent lights.

The traditional lighting segment is expected to register considerable CAGR during the forecast period. Traditional lighting encompasses conventional lighting technologies such as incandescent, fluorescent, halogen, and HID (High-Intensity Discharge) lamps. While these lighting sources have been widely used in the past, their market share has gradually declined with the emergence of LED technology.

Incandescent bulbs, once a common choice for commercial lighting, have become less popular due to their relatively low energy efficiency and short lifespan. Fluorescent lamps, including linear tubes and compact fluorescent lamps (CFLs), offer better efficiency than incandescent bulbs although are still less energy-efficient and have shorter lifespans as compared to LEDs.

Installation Type Analysis

Based on installation type, the commercial lighting market is fragmented into new and retrofit. The new installation segment held a high market share in 2023. New installation refers to the implementation of lighting systems in newly constructed commercial buildings or facilities.

This involves the design and installation of lighting fixtures and systems from scratch to meet the specific requirements and preferences of the building owners or occupants. New installations offer the opportunity to integrate the latest lighting technologies and design concepts to optimize energy efficiency, performance, and aesthetics.

The retrofit segment held a sizable share of the market in 2023. Retrofit installations involve upgrading or replacing existing lighting systems in commercial buildings with energy-efficient and technologically advanced solutions.

This includes replacing traditional lighting fixtures with LED fixtures, installing lighting controls for improved efficiency, or upgrading outdated components to enhance overall performance. Retrofitting allows building owners to improve energy efficiency, reduce operating costs, and enhance the quality of lighting without the need for major renovations or construction.

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Application Analysis

Based on application, the market is segregated into indoor lighting and outdoor lighting.  The indoor lighting segment is anticipated to experience a high CAGR during the forecast period. Smart lighting plays a pivotal role in shaping modern workspaces that appeal to customers with evolving preferences. It aids owners in establishing adaptable environments, cutting costs, boosting operational efficiencies, and delivering superior lighting quality to enhance occupant experiences.

The outdoor lighting segment is expected to register considerable CAGR during the projected period. Smart outdoor lighting serves multiple purposes, including safety, security, visibility, and aesthetics. Outdoor lighting along streets and roadways ensures visibility for motorists, pedestrians, and cyclists, improving safety and reducing accidents. LED technology has become increasingly popular for street lighting due to its energy efficiency and long lifespan. Outdoor lighting is often used to highlight architectural features of buildings, monuments, bridges, and landmarks, enhancing their aesthetic appeal and creating visual interest.

End-user Analysis

Based on end-user, the commercial lighting market is fragmented into commercial spaces, hospitality & leisure, retail, industrial, and healthcare. The commercial spaces segment held a major share in 2023, primarily driven by the emergence of cost-effective and adaptable commercial lighting solutions tailored to accommodate the intricate and evolving infrastructures.

These solutions have played a pivotal role in curbing utility expenses for various institutions, including schools, colleges, sports complexes, and water parks, which leverage renewable technologies to minimize their carbon footprint. Commercial lighting finds widespread application in public venues such as offices, hospitals, and retail establishments. Renowned for their durability, commercial-grade lighting systems incorporate state-of-the-art technologies aimed at enhancing efficiency and user experience.

The retail segment held a sizable share of the market in 2023. Retail environments such as stores, shopping malls, boutiques, and supermarkets rely on effective lighting to attract customers, highlight merchandise, and drive sales. Retail lighting solutions are designed to enhance product visibility, create visual interest, and guide shoppers through the space. Well-designed lighting influences purchasing decisions, evokes emotions, and reinforce brand identity, making it a crucial element in retail design and marketing strategies.