Global fragrances and perfumes market is projected to grow at a CAGR of 5.5% during the forecast period, 2020 - 2025.
- Key players in the market studied are focusing on developing natural fragrances, primarily due to the rising concerns regarding an issue related to synthetic fragrances, such as allergies and toxins.
- For instance, LUXE brand is positioning itself as a natural fragrance brand and is collaborating with celebrities for product endorsement. Increasing consumer expenditure on personal care products and rising awareness regarding the therapeutic benefits associated with fragrance are driving the market’s growth.
- The growing popularity of perfumes and increasing demand for higher fragrance concentration are driving the sales of parfums (pure perfume), which have 15% to 40% fragrance concentration.
Key Market Trends
Increasing Expenditure on Advertisement and Promotion
R&D and advertisements are driving the growth of the market studied. Key players are investing in key factors, in order to influence the consumer purchase decisions. The rising influence of social media and celebrity endorsement is impacting the advertisement strategies adopted by key market players. For instance, L’Oréal developed a tool known as the dubbed cockpit, which measures the ROI and productivity of its media investments in real-time. This enables better decision-making while formulating performance strategies. In 2017, L’Oreal spent USD 9.16 billion on the advertisement and promotional activities, an increase of 4.91%, during the period between 2014 to 2017.
Asia Pacific has the Largest Market Revenue
With increasing disposable income, more local consumers are opting to use quality products, especially young consumers, which are increasingly crucial for improved consumption. This shows a shift from mass to premium fragrances. Perfumes and fragrances play a significant role in the growth of luxury brands, especially in China. The market is driven by emerging middle-class consumers and millennials who pursue high-end lifestyles. Premium women's perfume sector is projected to grow in the forecasted period. With the introduction of perfumes with synthetic ingredients, other products (such as attars) are facing tough competition. This synthetic perfumes segment takes over a major market share.
The fragrances and perfumes market is a highly fragmented and comprises of international and regional competitors. Coty Inc., L’Oreal, LVMH, and Estée Lauder dominate the market with the help of major strategies, including acquisitions, expansions, and product launches. The rest of the market is occupied by small players, who are specific in manufacturing various personal care and cosmetics products. Companies compete on different factors, including product offerings, price, ingredients, and marketing activities, in order to gain a competitive advantage in the market. Key players are focussing on the online distribution channels for the online marketing and branding of their products to attract more customers. Some of the other prominent players in the market are Shiseido Co., Ltd, Revlon Inc., Chanel SA, Hermès International SA, and Avon Products Inc.
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