Perfume Market Analysis Report By Product, By End User, By Distribution Channel, By Region And Segment Forecasts From 2019 To 2025

Industry Insights

The global perfume market size was worth USD 31.4 billion in 2018. The market is expected to grow with a CAGR of 3.9% over the forecast duration. Increasing focus on personal care and rising demand for exotic and luxury fragrances are driving the market growth. Further, increasing consumers’ purchasing power and their growing spending on premium brands are fueling the growth of the market. The demand for perfume has increased significantly in the recent past as it gives a different dimension to individuals’ fashion statements and is considered as a means of personal pride that boosts self-confidence.

Manufacturers are emphasizing product differentiation to expand their customer base. Customers’ preferences have been the focus of product innovation. In this regard, Lauder’s Jo Malone provides fragrance consultation to manufacturers for creating custom-made perfumes. The company has placed an artist in its Tokyo-based store to assist the fragrance makers. The company also bought Kilian through which it offers premium handcrafted products.

Leading players are also gearing up to introduce natural fragrances owing to increasing concern over the adverse effect of synthetic products. It has been found that nearly 75% of women prefer natural products. Considering the growing demand for natural products, LUXE is focusing on positioning itself as a natural fragrance brand and the company is relying on celebrity endorsement of its brands.

Innovative ways of promotion have positively affected the perfumes market. Key players are betting big on effective advertisement to influence a customer-buying decision. Further, the promotion of products through social media reaches a large number of audiences and generates mass appeal, which in turn supplements the market growth. Moreover, companies are investing in digital advertisements to attract millennial consumers. For example, L’Oréal has developed a ‘dubbed cockpit’ that calculates the return on investment (ROI) in real-time. The company has spent over USD 9.2 billion on an advertisement, in 2017. These multi-channel advertisements have helped the company in garnering a larger significant number of the consumer base.

Product Insights

Premium perfumes held the biggest market share of over 65%, in 2018. Owing to the increasing focus on personalization, product differentiation, and quality, this segment is expected to exhibit considerable growth shortly. The premium segment is projected to register a CAGR of 3.9% over the forecast period, primarily because of the increasing demand for handcrafted and exclusive products.

Further, manufacturers are aiming to increase the sales of high-end products.  For example, Coty acquired a few Procter & Gamble Co.’s beauty brands to promote the sales of its high-end products. Ever since this acquisition, the company is focusing on accelerating the sales of luxury lines of products that include Tiffany and Gucci Bloom among others. Coty mainly targets millennials to boost its product sales.

Owing to the rising sales of premium perfumes, the demand for mass perfumes has reduced significantly. This has shifted manufacturers' focus on premium products. In 2016, sales of mass perfumes have reduced by 22% in the UK, thus providing a lucrative opportunity for the premium segment.

End-users Insights

Among different end-users, women held the largest market share of 60.1% in the base year 2018. It was found that U.S women purchase perfume every month. However, the frequency of men buying perfume is 1-2 times a year. Further, it was found that nearly 40% of the women in the United States use perfumes daily.

In the U.K, women spending on fragrance is higher than that of men owing to the high cost of women’s perfumes. Perfume for women costs significantly more than men’s perfumes. Despite the high cost, the demand in this region is expected to gain traction as women consider fragrances to be a crucial part of their care.

Distribution Channel Insights

Offline sales accounted for over 70% of the total sale in 2018. The availability of a large number of offline retailers and facilities such as the close look of the product or even trial before purchasing are proliferating offline sales of the products. Sales of perfumes through specialty stores are majorly driving this segment. Further, sales of these products are prevalent through supermarkets/hypermarkets.

The online segment is anticipated to exhibit the highest CAGR over the forecast years. The rise in e-commerce platforms such as Amazon, Falconi, and others has significantly boosted online sales. Ease in purchasing, availability of a wide range of products and doorstep delivery is the prime reason supplementing the online sales of perfumes. Further, the growing popularity of fragrance products among millennials is boosting online sales.

Regional Insights

Europe occupied the largest market share, in 2018, followed by North America. in Europe. In Europe, Germany alone held 16.3% of the market share in the same year. Coty was the leading brand in Germany. Sales of premium products, which include Calvin Klein and Jil Sander, were prevalent in the country.

On the other hand, in 2018, France contributed 25.9% of the market share in Europe's overall market. The presence of leading brands such as Guerlain and Christian Dior contribute to this growth. France exported fragrances worth USD 4.8 billion across the globe, accounting for over one-fourth of total export, in 2017. 

The Asia Pacific is projected to grow with the highest growth rate owing to increasing demand from countries such as India and China. The increasing trend of western culture, rapid urbanization, and the rise in the millennial population is set to fuel the demand in this region. Further, consumers prefer to rent the clothes instead of buying them owing to a lack of budgets in this region.

COVID-19 Impact Insights

The global perfume market has been adversely affected owing to the outbreak of COVID-19. Perfumes are mostly sold through offline retail stores. Following the pandemic outbreak, most of the retail stores were forced to close, which led to significantly low sales of the product. In addition disruptions in the supply chain caused further affected the production of perfumes. Various public functions and weddings were either canceled or postponed due to the pandemic, which, in turn, led to low demand for perfumes. Nonetheless, online sales have witnessed an increment in the past few months and this trend is estimated to be continued over the next few years. The introduction of cost-effective products and improving the online presence are anticipated to play a crucial role in the market growth going forward.

Perfume Market Share Insights

The key players in the market are Natura Cosmeticos, LVMH, Elizabeth Arden, Chanel SA, Avon Products Inc., L’Oreal Groupe, and Coty Inc. among others. Big players such as L’Oréal and Coty Inc. are acquiring smaller brands to strengthen their presence. Further, other companies including independent ones are focusing on developing customized fragrances depending upon individuals’ skin Ph levels.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from, 2015 to 2025. For this study, Million Insights has segmented the global perfume market report based on product, end-user, distribution channel, and region:

• Product Outlook (Revenue, USD Billion, 2015 - 2025)
    • Mass
    • Premium

• End-user Outlook (Revenue, USD Billion, 2015 - 2025)
    • Men
    • Women

• Distribution Channel Outlook (Revenue, USD Billion, 2015 - 2025)
    • Offline
    • Online

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)
    • North America
        • U.S.
    • Europe
        • U.K
        • France
        • Germany
    • the Asia Pacific
        • China
        • India
    • Central & South America
    • Middle East & Africa