Global Fragrance Market

21Aug09

source: Euromonitor

A closer look at the current global fragrance market, upcoming trends and the height of the celebrity fragrance sales

The fragrance market is one of the largest global cosmetics segments

• $30.5 billion in 2006

Past fragrance performance

• declining unit prices
• oversaturation of new products
• low brand loyalty

Emerging Markets

• Latin America and Eastern Eurpoe account for 1/3 of global sales
• Premium fragrances represent 60% global sales, mass market fragrance represent 40% global sales
• The mass market segment is the fastest growing
• Although there has been moves towards masstige and premium fragrances in Latin America, there is a stronger preference for mass market

• Asia-Pacific: less driving force in fragrance market due to different cultural norms in respect to body odor

Developed Markets

• Western Europe and North America are the most significant value markets (60% )

Innovation in fragrance market

• Some companies are creating brands tailored to a particular local markets/ethnic group

No Slump in Celebrity Trend

• The trend currently shows no signs of slowing down
• According to UK based fragrance retailer “The Perfume Shop”, celebrity scents represent 40% of total market and has had a 2000% sales boom since 2004
• Coming years could see the beginning of an inevitable backlash against celebrity scents
• Celebrity brands lack longevity in the market

I feel that mass fragrances will be more of a dynamic segment in upcoming years and will have more of an opportunity for growth. I don’t know how well consumers would react to a Maybelline perfume, but feel that premium fragrances should create sub-brands that fit readily within the mass market. Since consumers have been buying more and more cosmetics products in their drugstores, I feel like a fragrance section within a CVS/Duane Reade with more mass market options will lead to greater sales.

-cc

UPDATE:

I was in Wal-mart over the weekend and saw Mariah Carey’s newest fragrance, “Ultra Pink.” It’s exclusively sold at Wal-mart. It’s fun to spot these trends in the marketplace!

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