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Global Fragrance Market Poised for Growth

Although it was hard hit during the recession like markets for other luxury goods and services, the global fragrance market has rebounded and is now poised for aggressive growth. Fragrance was one of the beauty areas that suffered the biggest losses in the recession, with growth slowing to as low as 3 percent in 2009. The industry didn’t stay down for long, however: Steady growth turned into a 6 percent growth in sales in 2011, for the highest fragrance growth percentage seen since 2006. In contrast to the turnaround for fragrances, other retail growth areas remain slow or stagnant. The market is expected to continue growing at a rapid rate, and predicted by some analysts to be worth over $30 billion by 2015.

Trends and Top-Sellers

Key to driving the success of the fragrance market are celebrity fragrances. Over the 2012 holiday season, the new Bond perfume broke the men’s Top 10 fragrance list, and the Lady Gaga perfume did the same for women’s fragrances. One reason these types of perfumes may be so popular is that they initially sell themselves when A-list celebrities with large fan followings release products. Perfume houses can package everything from the bottle to the advertising to reflect the brand image of the given celeb. To stay on top year after year, celebrity perfumes have to reflect the elusive “star quality” of the talent attached, and have a scent allure. Celebrity perfumes hope to garner a share of the youth market, which is seen as a major growth market for the fragrance industry. These perfumes, perhaps unexpectedly, also garnered a large share of the growing male fragrance market, proving that star power can and does drive sales in this sector of the beauty industry.

Other trends that have spurred growth include a return to more nostalgic floral essences, such as rose, and increased interest in Eastern scents like musk and sandalwood. Global fragrance player Bell expects these to continue, listing “Outdated to Updated, “ “1920’s” and “Past - Present - Future” as 2013 trends for the perfume industry.

Worldwide, perfumers are hoping to capture a greater market share from teenagers and men, who are placing increased importance on grooming and appearance. Men’s fragrances have historically been in the aftershave category, but special occasion perfumes are selling stronger and expected to drive new growth for men. Youth-oriented scents may come onto the market as well, along with customizable scents and naturally derived perfumes that cater to those seeking a unique experience or an all-natural fragrance.

Geographic Growth

While North America experienced double-digit fragrance growth in 2011, historically the region hasn’t been a big player in the fragrance market. Europe has been — and is expected to remain — the largest market for perfumes. In the UK alone, consumers spent £790 on fragrances during the holiday season, or Emerging markets, which can help with further growth — include Latin America, Eastern Europe, the Middle East and the Asia-Pacific region.

In both the UK market and the larger European market as a whole, fragrances appear on track to continue selling well not only in the holiday months, but year round. With increased specialization in scents and increased celebrity collaboration, fragrance houses may have to work harder to demonstrate the niche value of particular products or to garner a brand following. The growth in beauty market sectors promises additional employment opportunities for those involved with scent manufacturing, marketing and retail. While fragrance is shaping up to be a consumer’s market, expect economic gains all around in Europe and throughout the global marketplace.

This was posted in Bdaily's Members' News section by Danielle M. .