Fragrances and Perfumes Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The fragrances and perfumes market is projected to register a CAGR of 5.52% during the forecast period (2022-2027).

COVID-19 has not just negatively impacted the fragrances and perfumes market across the world, but its impact has resulted in a generation of opportunities for many private players to emerge in the markets to cater to 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. According to L’Oréal, the consumption of beauty and personal care products, including fragrance and perfume, 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.

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 exciting, unique, and new fragrances to attract different consumer groups across the world.

The rising popularity of lighter-scented products, especially among the millennial population, and the availability of affordable body splashes, body mists, and cologne body sprays are expected to boost the sales of perfume and fragrance products in developed economies

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.

Key Market Trends

Increasing Expenditure on Advertisement and Promotion

R&D and advertisements are driving the growth of the market. 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 the sales of perfumes and fragrances. Some online cosmetics 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 to digital platforms. 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. Furthermore, the market is expected to witness significant growth in sales of artisanal and custom fragrance products over the forecast period, owing to the increasing expenditure on advertisement and promotion.

Asia-Pacific Emerges as the Fastest-growing Market

Asian countries, such as China, Japan, South Korea, Indonesia, Malaysia, Singapore, and other countries, are major contributors to making Asia-Pacific the fastest growing market for fragrance sand perfume in the global marketplace. Lately, pocket perfumes have risen in popularity because they are convenient to carry around and can be used on the go. The FMCG giant, CavinKare, launched the first-of-its-kind sachet perfume under its brand, Spinz. Furthermore, China is one of the world’s hotspots and fastest-changing beauty markets and is experiencing burgeoning demand for luxury perfume and fragrances, thus, resulting in an increasing number of foreign manufacturers expanding their footprints in the Chinese market. Also, growth in organized retail, the emergence of a young urban population in Indian cities, with increasing disposable income, mounting aspirations, changing lifestyles, increased affordability of lifestyle-oriented and luxury products, and greater product choice and availability, given the growth of the e-commerce market in the country, are the main drivers boosting the demand for fragrance and perfumes in the region.

Competitive Landscape

The fragrances and perfumes market is highly competitive and comprises international and regional competitors. Chanel SA, Dolce & Gabbana Luxembourg SARL, LVMH Moët Hennessy Louis Vuitton, and PVH Corp. 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 focusing on the online distribution channels for the online marketing and branding of their products to attract more customers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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