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The global perfume market size was USD 29.8 billion in 2020. The market is projected to grow from USD 30.6 billion in 2021 to USD 43.2 billion in 2028 at a CAGR of 5.0% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with perfume witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market will exhibit a lower growth rate of 2.5% in 2021 as compared to the average year-on-year growth during 2017-2020. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Perfumes are generally composed of fragrances and various oils to give out a pleasant aroma. The increasing demand for beauty products across the globe is accelerating the beauty industry. This, in turn, is expected to drive the growth of the market. Fragrant essential oilshave started playing a significant role in personal grooming. Most of the companies including Firmenich, Natura Cosmeticos SA, L'Oreal Groupe, and others across the globe are striving persistently to bring about innovation and development in the product to meet consumer demand. Fragrant essential oils longevity is one of the key consumer requirements. Hence, the offering of long-lasting fragrant essential oils is the major factor for creating a positive response from the consumer.
For instance, in June 2020, Givaudan, a prominent player in the global fragrance & scent industry introduced ‘VivaScentz’, a creative scent technology that may enable the company to create different categories of crafting fragrances such as fine fragrance, personal, home, fabric care and oral care flavours. However, the invention of these new technologies by various industry giants will boost the product demand.
Lockdown Restrictions to Impact the Market
The closure of beauty shops and grocery stores during the COVID-19 pandemic has impacted product sales globally. Besides, in such crises, companies face issues in conducting their production, sales, and R&D operations due to the labor and raw material shortages, thereby impacting the key players’ businesses. For instance, in 2020, Lalique Group SA, a beauty items maker, reported a 25% decline in its fragrant essential oils business revenues.
However, to avoid coronavirus infection, consumers are shifting towards hygienic & safer personal care items. Moreover, consumers prefer scents of different flavors and packaging formats that offer emotional wellbeing to them. Such factors are supporting the product revenues during crises.
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Waterless Scents is a Prominent Industry Trend
Nowadays, consumers prefer waterless hygiene items that reduce unpleasant odors immediately. Besides, they prefer fragrances made up of sustainable materials such as vanilla beans, balsams, citrus oil, and others to avoid the incidences of headache and eye & ear disorders due to the usage of chemical-based ones. This will offer newer market growth opportunities. Additionally, regular introduction of aromatherapy-based scents by the key players is likely to ease their product sales. For instance, in August 2020, Vectair Systems launched ‘Sensamist,’ a range of aromatherapy-based scent diffusers in the American market.
Companies Introduce Innovative Fragrance Solutions to Accelerate Market
Nowadays, key players are introducing innovative, touchless scent devices and AI-based solutions for regular scent users. These solutions include offering a scent profile for individual users and suggesting a scent based on their flavor preferences. This will attract the consumers toward buying such products, thereby accelerating the perfume industry growth. For instance, in April 2021, SEPHORA, LVHM owned multinational retailer introduced ‘MAISON 21G’, an innovative and touchless scent bar and an AI-powered application for the company’s Hong Kong beauty retailers. This will attract consumers to buy scented items in Hong Kong.
Rising Consumer Preferences Toward Online Shopping to Fuel the Market
This market is flourishing across all the different regions owing to the rising consumer inclination towards online shopping. According to the United Nations Conference on Trade and Development (UNCTAD), the worldwide sales of e-commerce grew approximately from 16% of the total retail sales in 2019 to 19% of the total retail sales in 2020 and reached USD 26.7 trillion in 2020.
Furthermore, increasing promotions and attractive discounts offered by various e-commerce sites, such as Amazon, Flipkart, Myntra, and others, compel the customers to buy products at reasonable rates. This, in turn, is giving rise to the market growth.
Large Necessities of R&D Investment to Limit the Market Growth
Companies heavily invest in R&D activities to offer innovative & disruptive scented items to the worldwide premium perfume consumers. This incurs additional costs to the key players’ businesses, thereby limiting the industry growth. Additionally, uncertain consumer behavior towards buying hygiene items poses challenges to the companies in introducing innovative products in the newer markets. Besides, incidences of headache, skin rashes, and other health-related issues among people due to the excessive usage of such products is restraining the market growth.
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Perfume Segment to Dominate the Market Owing to their Superior Quality
Globally, perfume type is one of the leading segments in the market as it has the highest level of fragrance concentration and includes a huge percentage of essential oils as compared to the other types. The approximate lingering power of the product is between 6 to 8 hours. Therefore, this segment is exhibiting the highest demand from the consumers which is expected to put it in the dominant position in the market.
The eau de segment is expected to be the fastest-growing segment during the forecast period. This type is less expensive as compared to the frgrant essential oils type and is more durable.
Mass Product Segment to Hold the Major Share; Premium Product to be the Fastest-Growing Segment
The mass products segment is leading the market, owing to the bulk production from various manufacturers. This results in the increasing demand for mass brand products across various regions such as Asia Pacific, Latin America, Middle East, and others. Additionally, the products of mass brands are manufactured to generate sales.
The premium segment is set to be the fastest-growing segment in the near future. Major players are focusing on presenting natural fragrances in the premium products due to the rising concerns over allergies and toxins in synthetic fragrances. The premium brand products would exhibit more opportunities to be innovative, which is thereby set to augment the product revenues during the forthcoming period.
Women Segment to Lead the Market Owing to Rising Expenditure on Cosmetic Products
Women segment leads the global market as women populations are largely inclined towards sustainable fragrances for their personal grooming purposes. According to the surveyed data presented by the published by the Environmental Sciences Europe, DOAJ Organisation, 52.9% of German women population prefer to consider natural fragrance products healthier over 47.1% of the German men population. Additionally, women’s spending power on a cosmetic product is expected to boost the product's sales. Therefore, the women segment is expected to drive the market growth.
Increasing personal hygiene & grooming awareness among men is fuelling the men segmental growth. Men fragrances are stronger and more aromatic in nature, which, in turn, may increase the product's adoption. In addition, the rising demand for fragrant flavors is likely to boost the product demand. These factors support the men segmental revenues.
Online Retail Segment to Lead Backed by Rising Number of E-commerce Platforms
The online retail segment is projected to hold the major perfume market share owing to the rapid inclination of the customers towards online shopping. Introduction of online platforms, such as Amazon, Flipkart, Parfumdreams, and others, is attracting customers to buy the required products online. This, in turn, is expected to drive the online retail segment. Additionally, these platforms are expected to be the fastest growing, owing to increasing number of internet users. Similarly, attractive discounts offered by various e-commerce sites are increasing the purchasing power of online customers.
North America Perfume Market Size, 2020 (USD Billion)
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In North America, the market stood at USD 10.5 billion in 2020. North America exhibited a major market share owing to the growing economy and increasing demand for premium products. Moreover, the rising standard of living in the United States, Canada, and Mexico is projected to boost the market revenue in this region.
The Asia Pacific market will register fast growth during the forecast period of 2021-2028 owing to the increasing young population, high levels of disposable incomes, increasing awareness regarding the product's benefits, and growing working-class population. According to the data presented by the Ministry of Statistics and Programme Implementation (MoSPI), Government of India, in May 2019, India’s per capita income is predicted to rise by 10%. Furthermore, many players are expanding their presence in emerging economies, such as India and China, to fulfill the fragrance requirements of customers in these countries. For instance, in November 2020, MATIERE PREMIERE, a scented products maker expanded its business by introducing its pop-up stores and e-commerce sites in Shanghai and China.
In Asia Pacific, China is projected to hold a major share in the market worldwide. With increasing purchasing power and rising focus on personal grooming, Chinese consumers prefer scents from premium brands. This is one of the important market trends that is projected to accelerate the growth in China.
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The growing number of beauty shops and thriving e-commerce industry in the UAE & Saudi Arabia support the product’s consumption rate in the Middle East region. Dubai CommerCity, a UAE-based e-commerce technology platform provider, reported e-commerce sales to rise from USD 2.09 billion in 2017 to USD 4.28 billion in 2020 in Saudi Arabia. Furthermore, increasing hygiene & grooming awareness among the South African populations is mainly fueling the African market growth.
Key Players Focus on Expanding Geographic Presence by Adopting Various Strategies
Some major players in this market include L’Oreal, Unilever, Coty, Procter & Gamble, Estee Lauder, and others. Several of these companies are planning to expand their businesses in various regions to achieve a significant position in the market. For instance, In July 2018, Ajmal, a UAE-based scent maker expanded its business in India and has planned to start 300 outlets of the fragrant essential oils in the Indian market.
However, local players are entering the market by using various business strategies including expansion, partnerships, product launches, development & innovations, mergers and acquisitions, and others. They are mainly adopting these strategies to sustain the growth of the global market in the coming years.
An Infographic Representation of Perfume Market
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The global perfume market research report provides a detailed analysis of the market and focuses on key aspects such as competitive landscape, distribution channels, and leading product types. Besides this, the report offers insights into the market trends and highlights key industry developments.
In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Billion)
By Distribution Channel
North America (By Type, Product, End-User, Distribution Channel, and by Country)
Europe (By Type, Product, End-User, Distribution Channel, and by Country)
Asia Pacific (By Type, Product, End-User, Distribution Channel, and by Country)
South America (By Type, Product, End-User, Distribution Channel, and by Country)
Middle East and Africa (By Type, Product, End-User, Distribution Channel, and by Country)
Fortune Business Insights says that the global market stood at USD 29.8 billion in 2020.
The market is projected to grow at a CAGR of 5.0% in the forecast period (2021-2028).
The women segment under the end-user criterion is expected to lead the market.
Introduction of innovative cosmetic solutions is driving the global market. Additionally, rising consumer preference for online shopping will help the market in its future development.
LOreal, Unilever, Coty, Procter & Gamble, and Estee Lauder the top players in the market.
North America market is expected to hold the highest market share.
Online channel is expected to witness the fastest growth in the global market.
Increasing standard of living, rising investments by key players for customization of products in this market, and increasing young population are the key market trends.
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