Perfumes & Fragrances — The Rise of Global Market

By Pramit Ghosh

By Pramit Ghosh

Image Attribute: 955169 / Pixabay.com / Creative Commons 0

The five senses — Sight (Vision), Hearing (Audition), Taste (Gustation), touch (Somatosensation) and importantly for this article – Smell (Olfaction). Their scientific definitions and hard-to-pronounce names just don’t do enough justice to their contribution to civilizational evolution or their manifested importance in today's world diaspora. 

For instance, when did we decide what smells good. Endless eons back, the human nerve system, connected to the brain, through its olfactory sensors housed in different shapes of noses decided that the smell of fresh flower is good and indeed – enticing and the smell of waste is bad. A pattern emerged – that which was fresh – indeed was more savory and olfactory satisfying. Other, which had a  rotten and smelt bad. 

If you think about it, "Fragrance" plays a huge role in the modern personal care industry. The more exotic the smell, the more enticing the allure. Obviously, at some point, Human Beings decided that ambiance is damned; even ‘WE’ have to smell good. 

The modern organized perfume industry, according to Statista, is worth US$ 72 billion. This is poised to reach US$ 100 billion by the year 2025. In the "personal care" category, fragrance products have the second largest market share, following only the "household products" category.

This is huge when you consider that it's just a spray before work in the morning and a mist before the party at night. As global spending potential increases, and more people understand the subtleties and joys of global, perfume brands, these projections could go wildly and upwardly awry. 

So which are these perfumes that one uses actually in reality? Of course, they are inspired by nature and environment but are composed of highly sophisticated ingredients to suit the most exacting sensory glands. Fragrances or perfumes are derived from a mixture of essential oils or aroma compounds, fixatives and solvents commonly used to provide a pleasant scent to the human body, animals, food, objects and any living space. The global fragrance market can be broken down into three categories such as perfume, deodorants, and others.

Companies like L'Oréal and LVMH Moët Hennessy Louis Vuitton SE (Louis Vuitton) own and operate the most successful "Smells in the business". As of 2015, the leading cosmetic and fragrance company in the world was L'Oreal, which generated a revenue of €25.3 billion, controlled nearly 30% of the massive global revenue in 2017 and will continue to do so with increased penetration into the developing markets (where unorganized and local brands hold a major share of the market).

The largest market in the world is North America. Obviously, it’s the developed countries that rule the roost. However, considering the pace of financial development in the other parts of the world, China and India are expected to drive and dominate the next decade due to the rise in disposable income as this allows the customers to spend more on luxury products among which fragrances play key roles. Further, this has been made easier by the e–Retail revolution. Now, an Indian lady sitting in a remote corner can access stores like "Vaicitri" and "Nykaa" to put her on a similar footing as her cousin in Saint Germain in Paris.

Even a superficial study of a developing market such as India shows the recent domination of scents and perfumes in the electronic media. Brands such as Wild Stone, Allure, and Axe dominate the television commercials with wild and exaggerated claims, while a walk into the major airports shows off Paco Rabanne and Hugo Boss in niftily done up airport kiosks. There is an obvious market out there and everybody wants a slice. 

Say’s Bhasker Rajamani, the managing director of Vaicitri.com, an e-Retail startup from Chennai in South India – "The inspiration was the rising Indian diaspora, whose requirement of international grade perfumes has long been ignored. Now we access and stock the most successful and exotic of World Brands such as Chanel, PacoRabanne, Hugo Boss, Jimmy Choo and others and deliver them for free to any corner in India. This accessibility is what was lacking. E- Retail will give a boost to the international perfume industry in terms of revenue and unimaginable reach". 

Surely, it will be a good smelling world from here on.

About the Author:

Pramit Ghosh (TR RID: C-2882-2018 | ORCID: 0000-0002-8062-2381) is the founder of Cognito Innovo, a tenured marketing professional with 16 years experience in telecom vertical specializing in Marketing Operations, Strategic Planning, Product Marketing, MARCOM / Brand Management, Base Management, Trade Marketing, GTM Plans & implementation, Team Management and Product Launch.