Fragrances and Perfumes Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The global fragrances and perfumes market is projected to grow at a CAGR of 5.5% during the forecast period, 2020 - 2025.

• The growth of the fragrances and perfumes market is primarily influenced by unpredictable and continuously changing fashion trends. Thus, key market players are focusing on developing an exciting, unique, and new fragrances, to attract different consumer groups across the world.
• Perfumes and colognes, along with body sprays and other scented body products, are likely to witness a significant growth during the forecast period. Likewise, the premium fragrances are driving the growth in developed regions, like North America and Europe, with a decline in the value of mass fragrances.
• Companies compete on different factors, including product offerings, price, ingredients, and marketing activities, to gain a competitive advantage in the market. Some of the other prominent players in the market are Shiseido Co. Ltd, Revlon Inc., Chanel SA, Hermès International SA, and Avon Products Inc.

IMPACT OF COVID-19 ON THE MARKET

• COVID-19 has not just negatively impacted the fragrances and perfumes market across the globe but as the world is recovering from its impact it has resulted in a generation of opportunities for many private players to emerge in the markets, to cater the inflated demand. Furthermore, COVID-19 has led to a major consumer shift, as customers are no more brand loyal in developing countries and are trying new brands in the low-stock environment.
• Additionally, since the sale of most of fragrances and perfumes is majorly being done through brick and mortar, it is necessary for the retail channels to take proper preventive measures.
• According to Loreal, The consumption of beauty an personal care products including fragrance and perfume over the period was strongly impacted by the closure of millions of points of sale (specialty stores, perfumeries, department stores, airport stores, etc.) which caused a real crisis of supply, rather than demand, with consumers temporarily unable to purchase products and services.
• Furthermore, the offline retailers such as The Boots UK drugstore chain reported its overall sales fell by two-thirds between March 25 and April 3, 2020, with beauty-product (includidng perfume and fragrance) revenues contributing to the decline. The declining sales were due to forced shutdowm of the stores
• The COVID-19 crisis is likely to accelerate trends that were already shaping the market, such as the rise of the global middle class and the use of e-commerce. Online distributors are recording an increased interest, as home-bound consumers explore retail alternatives. Some beauty-product brands and retailers with inventory and shipment operations ready to scale up are reporting e-commerce sales twice as high as their pre-COVID-19 levels. For instance, Sephora’s US online sales are reportedly up 30 percent versus 2019.

Scope of the Report

Fragrances and perfumes have improved the grooming habits of individuals and have become important products of day-to-day life. The market studied is segmented by product type into parfum or de parfum, eau de parfum (EDP), eau de toilette (EDT), eau de cologne (EDC), and other product types. By consumer group, the market is available as men, women, and unisex. By distribution channel, the market is segmented as online retail stores and offline retails stores. The offline retail channel is further sub-segmented into supermarket/hypermarket, specialty stores, convenience stores, and offline retail stores. The market is also segmented by geography into North America, Europe, Asia-Pacific, South America, Middle East, and Africa. The report contains top-line revenues and market share analysis of the key players, highlighting the most adopted strategies of the companies in the global fragrances and perfumes market.

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Key Market Trends

Increasing Expenditure on Advertisement and Promotion

R&D and advertisement are driving the growth of the market studied. Key players are investing in these factors to influence consumer purchase decisions. Furthermore, the rising influence of social media and celebrity endorsement is impacting the advertisement strategies adopted by key market players. With the rise in online sales, cosmetics, and perfume retailers are increasingly adding images and videos to boost perfume and fragrance sales. Some online cosmetic retailers also offer the possibility to get their perfumes and fragrances customized. Thus, the key market players are heavily investing in advertisement and promotion to attract consumers on the digital platform. For instance, L’Oréal developed a tool, dubbed cockpit, which measures the ROI and productivity of its media investments in real-time. This enables better decision-making while formulating performance strategies. and in 2018, L’Oréal spent USD 9.21 billion on the advertisement and promotional activities, an increase of 20.39% during the period between 2016 to 2018. Furthermore, over the forecast period, the market studied is expected to witness a significant growth in sales of artisanal and custom fragrance products, owing to increasing expanditure on advertisiment and promotion.

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