The Perfume Industry

March 2014

HEC-ULg

Consumer Intelligence

Research Project - Step 1 : The perfume Industry

Group 1

Antrilli Vincent

Fikri Kenza

Hunter Patricia

Marchand Solène

Rubio Martin Carolina

The market

The perfume industry, although not being seen of capital interest for the global welfare, has a strong influence on the colorful social lives of human beings.

The perfume global market capital was worth $36,6 billion in 2009 and is expected to reach $45,6 billion by 2018, namely a growth of more than 25% over 9 years, which is quite realistic according to the annual growth path of the industry, which oscillates between 3 and 4% a year.  

The forecasted growth should be driven primarily by growth in under-penetrated emerging markets such as Asia and Latin America. In addition, innovative products launches are also expected to drive the global perfume market. Innovation is a great deal in this industry and 1492 new perfumes were marketed in 2013.

The market is split into two categories, the premium market and the mass market, accounting respectively for 55,4 % and 44,6% of the total market.

The perfume market is rather consolidated: the top 20 producers account for 73% of the market.

In this market there is a few numbers of companies that own a range of product under different brand names. Aside of those multibrand players, there are some single brand companies like Chanel and Hermès.

Sales

Let’s have a look at the decomposition of sales by area, with a particular attention to the future industry drivers, Asia and Latin America.

[pic 1]

The most important region in terms of sales is Western Europe, which accounts for 36% of 2009 sales; it’s followed by Latin America and North America. As for Asia, we can notice that the region is quite far away from the others. In terms of growth, Latin America is clearly the most promising country, with an increase of 15,8% in perfume sales, while Western Europe, the biggest market, decreases by 0,1% and third market North American decreases by 5,9%.

Looking at the market sizes by country shows us that in the growing market Brazil is the second largest market and the first in term of growth. In addition with $4812,5 million of sales, it accounts for more than half the Latin America total market size ($8531,2 M). China for its part accounts for one fifth of the Asian market, and also shows a positive growth, although it’s not as important as Brazil, neither in term of percentage or sales.