Taking Perfumery Industry to the Next Level

Vandita Jadeja

29 Jan 2018

People have been using oils, soothing ointments and perfume for thousands of years. With the development in technology and the latest innovations coming into the market, these products have become highly valued in every culture. Products that enhance the feel of the skin and smell on your body have become a prominent part of every individual’s life. Earlier, perfume oil was extracted from flora such as rose, jasmine, lily, etc. These extracts were then steeped in oils until a perfumed unguent was formed. This formation was then rubbed into skin. The first era of perfume began in the 19^th century and today, both men and women have fragrance wardrobes of atleast a few different perfumes, keeping special and high valued perfumes for special occasions.

The perfumery industry has become a huge market in India with high end brands further moving up to higher value products. The global fragrance market is estimated to be worth USD 40.1 billion.With an ever expanding product line, the Indian fragrance market has shown a steady growth in the last five years. The significant expansions in technology and the growing importance towards personal grooming and appearance along with the increase in customer spending on beauty products has contributed to the growth of the market. The overall size of the perfume industry in India is about Rs.2000 crores, and this is projected to grow by 50% in the next five years. This means it could reach Rs.3000 crores by the next five years. The current online perfume market stands at Rs 148 crores which is expected to grow by 120% to Rs 345 crores.With an increase in online shopping, the online market share of perfumes is set to rise in the coming years as well. Many companies extract essential oils in India in an unorganized manner which needs to be done by following a scientific method. The image below depicts the growth of the industry over the years.
Crafting Luxury Lifestyle

Natural ingredients and resources like alcohol, petrochemicals, coal and coal tars are used in the process of manufacturing a perfume. Some plants do not produce oil naturally;hence synthetic chemicals are used to recreate the smells of non-oily substances. Synthetics can create original scents which are not found in nature. Some perfume ingredients are animal products like castor which comes from beaver, musk from male deer. These animal substances are often used as fixatives which enable perfume to evaporate slowly and emit odors longer. The ratio of alcohol to the scent determines whether the perfume is a cologne or toilet water. Over 400 chemicals are used in the fragrance industry today. The common chemicals include ethanol, cetone, limonene, methylene chloride, camphor, ethyl acetate, linalool, benzyl alcohol, benzaldehyde and formaldehyde. 80% of the fragrances are comprised of these chemicals and the 100% of a formula can be synthetic. Perfumes are available in two forms-natural and synthetic. Various brands deal in both the types of perfumes.

When it comes to the art of perfumes, no country ranks higher than France. Some of the greatest names in the perfumery industry today come from France and it is a leader with a 30% share of the market. Some of its brands include Chanel, Christian Dior and Estee Lauder. France is one of the oldest perfume manufacturers in the World.The best fragrance companies know that the using the right ingredients will ensure a mesmerizing scent. The global perfume market has been forecast to reach US $45.6 billion by 2018, which will be primarily driven by growth across the unpenetrated and emerging markets. Women’s fragrances continue to dominate the market with the maximum number of product launches for the fairer sex. This scenario is expected to change with men’s fragrance industry witnessing a strong potential for growth. The leading companies in the industry include high end labels like Chanel, Dior and Guerlain. Unisex fragrance is the third category which is slowly showing growth in the industry. Although its growth is projected to be lower than men’s fragrances, there is a minor segment which prefers the unisex fragrance. A large number of online portals are specially catering to unisex fragrance demands and ensuring that there is enough variety in the same. A market segmentation has been shown below:
shown below:
Future Market Insights

The future of the perfumery industry is strong and the demand for the same is also consistently growing. The analytical capabilities of the industry laboratories have become so good that one can easily derive a formula for a perfume. With the increase in the purchasing power and the Indian customers becoming savvy, the fragrance scene is evolving in the country. There is a significant domination by the big brands but the impact of niche labels has reached critical mass. Various labels are offering personalization for a bespoke feel. The prestige brands offer a personalized bottle engraved with your initials, or a fragrance with no title, allowing consumers to name it themselves.
global perfumes market revenue

The Western Europe accounts for the maximum revenue share of the global market, followed by North America. The Western Europe perfume market is expected to grow by a CAGR of 3.2% over the coming years.In order to appeal the consumers, brands are constantly looking to understand the personality of the consumer and how the scent relates to them. The premium labels connect with the clients and gather information which helps create the ideal scent. For this industry, there is a long way to go and with the constant innovation in technology, there is a possibility of reaching out to new customers and create exceptional fragrances. The leading market players are adopting the digital marketing strategies that help them reach a larger customer base. Major players are strategically investing across the Middle East and Africa where the per capita consumption of perfume is high.