Smells Like Success —A Look Into Fragrances Segment
Although talk of the post-COVID consumer may seem superfluous by now, there are still many aspects and ripple effects we are only now learning to identify and observe, not to mention quantify. All over the world market players are studying the ways in which the pandemic has altered consumers’ perception of self care as people grew ever more health-conscious, aware of their well-being and how their daily choices influence how they feel. Large part of that movement has to do with beauty. This term that once referred exclusively to women and the application of cosmetics has taken a much broader meaning, and was noticeably accelerated by the pandemic as health and beauty are intertwined same as beauty standards and personal identity.
From this starting point it makes perfect sense when looking at the expansion and increasing sophistication of the perfume and fragrance market. Personalized perfumes are made using unique, one-time blends of exotic oils and extracts combined with a carrier base, often a natural oil. Both mass manufacturers and Ateliers offer consumers the opportunity to create their own ‘signature’ and personal scent that suits their own preferences, lifestyle and sense of smell.
According to a recent report by The Business Research Company, the global cosmetic perfumes market is expected to grow from $62.91B in 2021 to $71.19B in 2022 at a CAGR of 13.2%. The entire global perfume industry worth is expected to grow to $114.98B in 2026 at a CAGR of 12.7%.
The increasing demand from e-commerce companies for consumer goods is also a major driver. As per the market analysis, this appetite for products that cater to end-customers is expected to drive the demand for perfumes during forecast period. According to the US Department of Commerce, Retail Indicator Division, e-commerce sales were $870B in the U.S in 2021, a 14.2% increase over 2020 and a 50.5% increase (!) over 2019.
The report also states that LVMH was the largest player in the perfumes market in 2021, with a 3.15% of the perfume market share, as a prominent leader in luxury beauty. The group’s strategy is to expand and enhance customer experience through mergers and acquisitions. For example their October 2021 acquisition of ‘Officine Universelle Buly 1803’, the French beauty brand specializing in perfumes and cosmetics, after having been supported by the LVMH Luxury Ventures investment fund for almost four years. Below is a quick review of some prominent fragrance brands owned by LVMH who are performing well in various markets around the world.
One of the biggest names in fashion and beauty recently making public their deal with actor Johnny Depp , an ambassador for Dior since 2015, who signed a seven-figure, multiyear contract to resume his role as the face of the French fashion house’s fragrance for men ‘Sauvage’. Perfumes by the brand are widely available on all leading online retailers like Ulta.com where the ‘Sauvage Eau de Parfum’ is in the Men’s category top 5 best sellers and has over 2,000 consumer reviews to date. On social media the brand reaches a total audience of 21.9M followers across channels and has been investing more resources developing their TikTok account, going up by 4.5% in new followers over the last month alone and hitting over 20.5M likes. In website traffic it is interesting to note that Dior has about 33.4% of all incoming traffic coming from Japan according to Alexa data followed by 19.8% from the US.
The luxury Italian brand established in 1916 by the baron Carlo Magnani in Parma still produces their products in Italy today staying true to their historical heritage and traditions. This brand is especially popular in Europe as evident in its excellent performance on EU retailers. In the UK Acqua Di Parma entered new best sellers on Spacenk.com and Feelunique.com Top 20 Fragrances with products from their ‘Forte_Forte’ limited edition series, and on the German Sephora.de the brand entered the Fragrance Gift Sets top 25 with ‘Blu Mediterraneo’ Eau de Toilette sold at €54.95. In website traffic Acqua Di Parma reached #498 on the Beauty Traffic Rank, landing in its highest ever placement after climbing 164 places in the last 3 months.
The US based Fresh cosmetics offers various skin care and body products as well as their fragrances and perfumes, where the brand has 15 products in the scented category with prices starting at $27.00 for a 10ml rollerball and up to $95.00 for a 100ml bottle. In online retail the brand had a few successful launches recently in Australia, introducing several new products to Sephora.com.au in multiple categories with the ‘Rose Morning — Eau De Parfum’ ranking in the Top 5 best sellers on Women’s Fragrance. On social media Fresh cosmetics are most active on Instagram with 1.43% average comment ratio, now reaching over 1 million followers and representing 59% of its total audience across channels.
