The fragrance and perfume market encompasses a wide range of fragrances and perfumes used to provide pleasant scents on the human body. The products offer health and wellness benefits and help reduce stress. Perfumes and fragrances play a critical role in social interactions and personal expression. Escalating disposable incomes and growing socialization trend, especially among millennials and generation Z, have catalyzed the sales of luxury body care and grooming products in recent years. Furthermore, increasing adoption of natural, organic and sustainable personal care ingredients without harsh chemicals has opened new avenues for fragrance brands.
The global Fragrance and Perfume Market is estimated to be valued at US$ 53.85 Bn in 2023 and is expected to exhibit a CAGR of 7.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends witnessed in the market is the customization of fragrances and perfumes according to consumer preferences. Leading brands are offering customers the opportunity to select signature scents by custom blending different fragrances. Moreover, there is a rising demand for vegan perfumes and environmentally-conscious formulations without animal-derived ingredients among health-conscious consumers. Premiumization is another trend, with the introduction of niche perfume brands focused on elevated experiences through distinctive fragrances and exquisite packaging. Furthermore, innovations in delivery systems such as spray bottles, roll-ons and moisturizing body mists have supported the market growth. Natural and organic perfumes composed of botanical essences are gaining substantial traction.
Porter’s Analysis
Threat of new entrants: The fragrance and perfume market has high advertisement and brand awareness costs. Creating new fragrance brands requires substantial investments, lowering the threat of new entrants.
Bargaining power of buyers: Large customers like retailers hold strong bargaining power due to their ability to demand better prices and terms from suppliers. However, the market has a wide range of established brands for buyers to choose from.
Bargaining power of suppliers: Major raw material suppliers like essential oils producers hold moderate bargaining power due to their specialized expertise and established supplier networks. However, buyers can source materials from alternative suppliers in case of price increase.
Threat of new substitutes: The threat is low as perfumes and fragrances have well-differentiated brands and strong customer loyalty. However, natural perfumes with less synthetic ingredients pose a potential threat.
Competitive rivalry: The market has strong competitive rivalry among major global players. Companies compete based on brand reputation, product quality, and marketing.
Key Takeaways
The Global Fragrance And Perfume Market Size is expected to witness high growth over the forecast period supported by increased spending on luxury goods and premiumization trend.
Europe currently dominates the market holding around 35% share attributable to high preference for natural and premium fragrances among consumers in countries like France and Italy. North America follows as the second largest region driven by private label brands and celebrity endorsementsfueling demand. Meanwhile, Asia Pacific is projected to experience fastest growth with the expanding middle class population and improving living standards in countries like China and India increasing fragrance adoption.
Key players operating in the fragrance and perfume market are BASF Corporation, DSM, Cellana Inc., JC Biotech Pvt.Ltd, FEMICO, Croda International Plc, Pharma Marine AS, Clover Corporation, Omega Protein Corporation, Kingdomway Nutrition, Inc., ECPlaza Network Inc., Bizen Chemical Co.LTD, Stepan Company, Novotech Nutraceuticals, Inc., Arjuna Natural, Jiangsu Auqi Marine Biotechnology Co., Ltd., and Aker BioMarine. The market is fragmented with these companies focusing on product differentiation and new launches to create sustainable brands and gain market share.
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