Room AC Market is expected to reach US$ 78.60 Billion by 2031

Growing Population and Urbanization Boost Room AC Market Growth  

According to our latest market study on "Room AC Market Size and Forecast (2021–2031), Regional Share, Trend, and Growth Opportunity Analysis — by Product Type, Technology, and End Users," the market was valued at US$ 52.16 billion in 2024 and is anticipated to reach US$ 78.60 billion by 2031. It is estimated to register a CAGR of 6.1% during 2025–2031. The report includes growth prospects in light of current room AC market trends and factors driving the growth.

According to the United Nations, the global population reached 8 billion on November 15, 2022, which is a testament to major advancements in healthcare, food security, and economic development. The world’s population is projected to continue expanding steadily in the coming years, peaking at ~10.3 billion by the mid-2080s. 68% of the global population is estimated to reside in urban areas by 2050. Rising urbanization is reshaping consumption patterns, infrastructure demand, and the dynamics of household energy use, particularly in emerging economies where urban growth is most pronounced.

Room AC Market Analysis – by Geography

 Source: The Insight Partners Analysis

This surging urban population and an expanding global demographic are playing a pivotal role in propelling the room AC market. The demand for residential and commercial air conditioning systems is rising with the growing population and surging modernization of infrastructure. Urban environments typically experience higher ambient temperatures than rural areas due to the urban heat island effect, which exacerbates the need for efficient indoor cooling solutions. Moreover, urban households tend to have greater access to electricity and higher disposable incomes, enabling the adoption of air conditioning technologies. The expanding middle class in populous countries such as India, China, Indonesia, and Nigeria drives the demand for room air conditioners.

This demographic shift is influencing the approach of manufacturers and governments in market development. The growing urban consumer base is demanding more compact, energy-efficient, and smart RAC units that align with the spatial constraints and energy regulations of modern urban housing. Rising population densities are prompting stricter building codes and climate policies that emphasize the need for sustainable cooling technologies. In response, the industry is witnessing a surge in innovation, from low-global-warming-potential (GWP) refrigerants to solar-powered units and integrated smart home systems. The intersection of population growth, urbanization, and climate change is not only expanding the size of the room AC market but also reshaping its future direction, opening up new opportunities for investment, innovation, and sustainable development. Therefore, the rising growth in population and urbanization boost the room AC market growth.

The scope of the room AC market report focuses on North America (US, Canada, and Mexico), Europe (UK, Germany, France, Italy, Russia, and Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America). In Europe, Italy held a significant room AC market share in 2024. In July 2024, LG introduced its latest LG ARTCOOL Gallery air conditioner models in Italy, combining advanced climate control with customizable aesthetics. The new versions featured a significant innovation—a 27-inch LCD screen that allows users to personalize the appearance of their unit through integration with the LG ThinQ app. Consumers have the option to choose from a collection of 55 preloaded images, wallpapers, and artworks, or upload up to 20 personal photos directly from their smartphones to be displayed on the screen. This fusion of design, technology, and user experience reflected a growing trend in Italy toward appliances that not only perform efficiently but also complement modern home interiors. LG’s stylish and interactive air conditioning solutions resonated with Italian consumers, driving the growth in the room AC market, as rising temperatures and shifting lifestyle preferences increased demand for both functionality and aesthetic appeal, positively impacting the room AC market forecast. 

In North America, the US held the largest room AC market share in 2024. The US room AC market is undergoing a transformative shift driven by regulatory changes and innovations in refrigerant technology. The Environmental Protection Agency (EPA) will implement a new rule limiting the global warming potential (GWP) of refrigerants used in residential and commercial air conditioning systems to 750. This regulation effectively phases out high-GWP refrigerants such as R-410A—which has a GWP of 2,088—in favor of more sustainable alternatives such as R-454B and R-32. These lower-impact refrigerants are environmentally responsible and are spurring technological advancements across HVAC systems. Manufacturers are accelerating the rollout of next-generation units that comply with the new standards, and consumers are increasingly prioritizing energy efficiency and environmental sustainability. This convergence of regulation and innovation is reshaping market dynamics, positioning 2025 as a pivotal year for the expansion of eco-friendly room air conditioning solutions. 

Panasonic Holdings Corp, Voltas Ltd, Carrier Global Corp, LG Electronics Inc, Blue Star Ltd, Daikin Industries Ltd, Samsung Electronics Co Ltd, Mitsubishi Electric Corp, Whirlpool Corp, and Johnson Controls - Hitachi Air Conditioning Company are among the key players profiled in the room AC market report. Several other major players were also studied and analyzed in the report to get a holistic view of the market and its ecosystem. The market study provides detailed market insights, which help the key players strategize their growth.

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