Global Home Fragrance Market (by Product Type, Distribution Channel, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

The global home fragrance market is anticipated to reach US$7.89 billion in 2023, growing at a CAGR of 5.3%, during the forecast period. Home fragrances, such as customizable plug-ins, aromatherapy diffusers, and scented candles with platform lids, are some of the innovative products that have grown their popularity among the target customers. As a result, broadening the scope of product offerings is one of the primary reasons driving demand for home fragrances in the coming years.

Segment Covered

• By Product Type: The report identifies four segments of the global home fragrance market, in terms of product type: Scented Candles, Room Spray, Reed Diffusers, and Others. Scented candles held a major share in the market. On the other hand, the reed diffusers segment is expected to grow at the highest CAGR in the forthcoming years as reed diffusers are relatively inexpensive as compared to other fragrance products, which makes them more lucrative products.
• By Distribution Channel: According to the distribution channel, the global market has been categorized into four segments: Supermarket/Hypermarket, Online Stores, Convenience Stores, and Others. The supermarket/hypermarkets held the largest share in the market. The market's expansion is aided by the competitive advantages of supermarkets/hypermarkets such as longer opening hours, greater product assortment, and better adaptation to consumer shopping habits.

Geographic Coverage

According to this report, the global home fragrance market is divided into four regions namely North America, Europe, Asia Pacific, and the Rest of the World. The countries covered in North America region are the US, Mexico and Canada, while Europe includes the UK, France, Germany, and Rest of Europe. Moreover, China, India, and Rest of the Asia Pacific are included in the Asia Pacific region. North America held the dominating share in the market owing to growing penetration of fragrance-based companies, increasing population, and rising adoption of room sprays in homes. The US market is further divided based on product type namely, Room Spray, Scented Candles, Reed Diffusers, and Others. In Europe, Germany is expected to be the fastest growing region in the forecasted period. Whereas, in the Asia Pacific region, China held the largest share in the market owing to the rise in spending on home furnishings, growth in the air care market, and high consumer preference for pleasant aromas in their surroundings.

Top Impacting Factors

Growth Drivers

• Improving Consumer Confidence Index
• Surging Gen Z and Millennial Population
• Accelerating e-Commerce Channels
• Rising Adoption of Aromatherapy Candles

Challenges

• Retail Consolidations
• High Competitive Pressure

Trends

• Technological Innovations in Diffusers
• High Preference for Personalized Scented Candles
• Rising use in Stress Relieving

Driver: Surging Gen Z and Millennial Population

Because of the increasing Gen Z and millennial population, the residential market is booming because many of them rent or own homes, which would likely increase the demand for cutting-edge home fragrance items globally. Additionally, the young population is more considered about the well-being and fragrances compared to the older generation, therefore, it is expected that an increase in the younger population would further contribute to the demand for home fragrances. Moreover, manufacturers are creating new products to meet the rising demand for luxury candles, which is encouraging the growth of the global home fragrance market during the course of the projection period.

Challenge: High Competitive Pressure

Competitive pressure has intensified dramatically in the home fragrance sector, which has experienced strong growth and attractive profit margins. To compete effectively, manufacturers are improving production & distribution operations to ensure a high level of product quality and develop new products & solutions. Manufacturers also support products with advertising, promotions, and other marketing vehicles to build awareness and trial of brands and products in conjunction with the sales force. This, in turn, is raising the key processors’ indirect expenditures and side-by-side suppressing revenues.

Trend: High Preference for Personalized Scented Candles

Currently, the global home fragrance industry has been trending with a high preference for personalized scented candles. The customers are now very cautious when choosing the shape, size, color, texture, and fragrances of candles as per the occasion for which it is required. The freedom to design candles also helps manufacturers to expand their product portfolio and cater to the buying preference of consumers. Vendors are offering the extra benefit of designing the candles (such as allowing customers to add photos and quotes on the containers of candles) according to the taste and preferences of individual buyers. This has also shown a positive impact on the volume of home fragrance product sales and is expected to stimulate healthy competition in the global market.

The COVID-19 Analysis

In 2020, the global home fragrance sales have been weak and there have been widespread store closures. However, after the relaxation of the lockdown, the industry responded positively to the crisis. Throughout 2020, various home fragrance product manufacturers were focused on the promotion of classic or popular products to drive repeat purchases. Manufacturers were also using online quizzes and personalization profiles to guide customers toward their ideal home fragrance. The technological innovations have also helped home fragrance retailers to align with safety regulations in stores.

Analysis of Key Players

The global home fragrance market is highly fragmented, with a large number of small- and medium-sized manufacturers accounting for a insignificant revenue share of overall market. The key players in the global home fragrance market are Newell Brands Inc., The Procter & Gamble Company, Henkel AG & Co. KGaA, 3M Company, Godrej Consumer Products, Reckitt Benckiser Group plc, S.C. Johnson & Son Inc., Faultless Brands, Beaumont Products, Inc., NEST Fragrances, LLC, GALA Group GmbH (Korona Candles), Regent Holding Company, LLC (Illume, Inc.), Voluspa, and Seda France Inc.

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