In 2021, the global fragrance market was valued at US$35.08 billion and is anticipated to grow to US$57.60 billion by 2027. Fragrances are substances that contain strong-smelling organic compounds with distinct, pleasant odors. These are complex mixtures of natural and man-made compounds that are added to a variety of consumer products to give them a distinctive aroma. Fragrance can be any aroma that one enjoys, such as perfume, flowers, or food. These are used in products for a variety of reasons to enhance the user experience.
Fragrances can satisfy emotional demands and communicate notions like cleanliness, freshness, and softness, as well as serve to relieve stress and promote well-being. They provide a distinct sensation of well-being and empowerment, and are frequently seen as uplifting, accompanying customers from the beginning to the end of their day. Some of the major reasons why consumers are buying fragrances are the growing awareness of skincare & cosmetic products, increasing demand for hygiene products, and inclination towards fitness and health. The fragrance market is expected to grow at a CAGR of 8.73% over the forecast period of 2022-2027.
Market Segmentation Analysis:
- By Nature: The report provides the bifurcation of the fragrance market into two segments based on nature: Natural, and Synthetic. In 2021, the synthetic segment lead the fragrance market, accounting for more than 60% share of the market, owing to the less intensive labor work, surging consumption patterns of consumers, and lower cost of raw materials. The Natural fragrance market is expected to grow at the highest CAGR due to the rise in awareness on usage of natural fragrances & low toxicity of these compounds.
- By Type: In the report, the global fragrance market is divided into two segments based on the type: Premium, and Mass. The premium segment is expected to grow at a CAGR of more than 10% owing to the increasing awareness about personal hygiene, people's higher living standards, and growing popularity among young people. The premium fragrance market and mass fragrance market are further bifurcated into three segments based on gender: Men, Female, and Unisex. The female segment held the highest share in both the markets.
- By Application: The report provides the segmentation of the fragrance market on the basis of application: Personal Care, Household Care, and Others. In 2021, the personal care segment dominated the market by holding more than 65% of the market share. Increasing consumer awareness for hygiene due to rising chronic diseases and importance of healthcare, rising popularity of beauty & personal care products, improving quality of life, advantageous results of beauty & personal care on self-esteem led to the increase in personal care fragrance market.
- By Distribution Channel: In the report, the global fragrance market is divided into two segments based on the distribution channel: Online, and Offline. The offline segment dominated the market in 2021 with almost 80% share of the global market. The online segment is expected to grow at the CAGR of more than 20% during the forecast period, as it saves time for both buyers and retailers while also providing a high level of comfort to consumers, as they don’t have to bear the hassles of traffic or getting ready while shopping online.
- By Region: The global fragrance market can be divided into five regions: Asia Pacific, North America, Europe, Latin America, and Middle East & Africa. The Asia Pacific dominated the market in 2021 by holding more than 40% share of the global market. The rise in the per capita income of the consumers, the entry of new market players, and innovation in packaging techniques are the key factors driving the Asia Pacific fragrance market.
The US is the leading fragrance market within the North America region, because of increasing online vendors, rising adoption of personalised fragrance products, growing Gen-Z consumers, and rising demand for organic fragrance products.
In the report, Europe fragrance market & the US fragrance market are further bifurcated based on the nature (Natural, and Synthetic) and the type (Premium, and Mass).
Global Fragrance Market Dynamics:
- Growth Drivers: One of the most important factors impacting fragrance market dynamics is surging Gen Z and millennial population. Younger consumers and millennials are getting more inclined towards personal grooming and are ready to experiment with new concepts and brands. With growing disposable income and greater exposure to foreign lifestyle trends, young generation are investing in good grooming and the market for fragrances has boomed as a result. Furthermore, the market has been growing over the past few years, due to factors such as rapid urbanization, accelerating e-commerce channels, growing awareness of skincare & cosmetic products, rising trend towards fitness and health, and increasing demand for hygiene products, etc.
- Challenges: However, the market has been confronted with some challenges specifically, increased availability of counterfeit products, high usage of chemicals, etc. The fragrance market is constantly vulnerable to counterfeits, particularly in the fast developing market of “smell-alike” designer-inspired fragrances because these prompt the identification of the methods that classify their quality. Counterfeits can lead not only to the loss of profit for honest producers but also have a negative impact on consumers who pay prices for poor quality goods that may result in health or safety problems.
- Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such growing influence & impact of social media, product innovations by manufacturers, increasing popularity of aromatherapy, increasing preference for scented candles, surging demand for eco-friendly fragrance products, increasing preference for customized fragrance, technological advancement, etc. Personalized products make the brand stand out and creates brand loyalty. It makes customers feel special because the brand is taking their interests into account. Many companies are offering the option to customize perfumes, fragrances, scented candles, etc. There are fragrances that are customized to match an individual’s exacting DNA, to the fragrances that simply match the exact preference of an individual, as well as producing packaging with personalized touch such as the person’s signatures or preferences for specific bottle designs.
Impact Analysis of COVID-19 and Way Forward:
In 2020, several industries had shut down production activities in response to the emergence of COVID-19. Various small scale and major companies faced difficulties in conducting their production, operating their business thoroughly, and issues faced with R&D operations owing to the shortage of labor and raw material which hampered market growth. However, as the market condition improved and people's disposable income increased, so did their preference for various types of fragrance items, resulting in the market expansion.
Competitive Landscape:
The global fragrance market is fragmented, with the presence of large number of small- and medium-sized suppliers in the market.
The key players of the global fragrance market are:
- Estee Lauder Companies Inc.
- The Procter & Gamble Company
- Henkel AG & Co. KGaA
- Unilever PLC
- Coty Inc.
- L'Oréal S.A.
- Firmenich International SA
- Givaudan S.A.
- Avon Products, Inc.
- LVMH
- Shiseido
- Symrise AG
- Chanel International B.V.
- Giorgio Armani S.p.A.
Some of the strategies among key players in the market for fragrance are product launches, mergers, acquisitions, and collaborations. In 2022, Givaudan S.A. collaborated with TMIC to launch fragrance industry’s first AI-powered fragrance co-creation service. The unique co-creation model allows brands to get deeply involved in the fragrance creation process. Through the visual touch screen, customers are able to quickly realise their olfactory vision. Whereas, In 2022, Avon Products, Inc. introduced a unique white Oud accord fragrance. This luminous White Oud accord heart is complemented by the rich fruitiness of black splendour plums, a bouquet of white floral gardenias and finished with warm, creamy vanilla.
Table of Contents
1. Executive Summary
Companies Mentioned
- Estee Lauder Companies Inc.
- The Procter & Gamble Company
- Henkel AG & Co. KGaA
- Unilever PLC
- Coty Inc.
- L'Oréal S.A.
- Firmenich International SA
- Givaudan S.A.
- Avon Products, Inc.
- LVMH
- Shiseido
- Symrise AG
- Chanel International B.V.
- Giorgio Armani S.p.A.
Methodology
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