I’m always interested in the financial side of the fragrance industry, even though I sometimes can’t make heads or tails of the specific fine point and details. I recently found some numbers for a few of the corporate giants like Givaudan whose ingredients are often the building blocks for the perfumes we wear and whose perfumers create some of the many fine fragrances released each year. The numbers demonstrate something we already knew: traditional Western fragrance markets are weakening, and the future for many perfume companies lies in emerging markets. [Update: In 2014, I took a more in-depth look at a number of Western perfume markets, from Germany to the Netherlands, France, Italy and the UK, but also examined the Indian perfume industry and the Middle Eastern one. There is also a look at the revenue figures for various industry leaders like LVMH, Givaudan, and IFF. You can read all that at: The Global Fragrance Industry. There are also posts on the massive Brazilian market, the Chinese and Japanese ones, and a 2/2014 post on the U.S. market. In another 2014 post focused more on the niche market in the context of Frederic Malle, the second half talks about Estée Lauder, L’Oreal, Elizabeth Arden, Coty, and P&G.]
What’s interesting is that Latin America is one of those emerging markets, but the Asian one isn’t quite as strong as everyone may think. In fact, analytical reports from the Euromonitor indicate both the Chinese and Japanese perfume sectors are impacted by socio-cultural issues regarding fragrance use. Still, some of the numbers involved in terms of overall, global perfume sales and revenues are astronomical. Please note, however, that almost all of the articles below focus on the more established and significantly larger commercial fragrance market, not the niche one.
U.S. SALES FIGURES:
According to a report from the Cosmetics Design group, U.S. fragrance sales slowed in 2012:
The US fragrance market has taken a hit as sales dry up due to low demand, and figures just simply can’t meet those driven by the exceptional growth seen in the previous year.
Having charted a solid performance in 2011, growth dropped off in 2012, as the market could not meet the high levels of demand and extensive product innovation that led to a good performance the previous year.
Fragrance sales the previous year had benefited from higher-income shoppers who felt more comfortable spending on others and themselves as the economy improved, but with no celebrity must-have perfumes on the market in 2012, it suffered.
As you will note, the report implies that it is celebrity perfumes that drive sales, a fact that underscores why industry-supportive groups like the Fragrance Foundation have such a focus on fragrances like that of Justin Bieber. It’s a symbiotic relationship that is necessary to sustain both groups, much like whales and barnacles. Oddly enough, after writing this paragraph, I subsequently came across a report from the Euromonitor International analysis group that specifically mentioned Justin Bieber’s fragrance as contributing enormously to U.S. market sales in the previous year! In fact, it’s the Euromonitor’s financial breakdown that is the basis for the Cosmetic Group’s report:
After growing by 9% in 2011, sales of fragrances grew by just 3% in 2012. It appears that an improving economy in 2011 combined with pent-up demand and extensive product innovation led to strong growth in 2011, but this was not able to be repeated in 2012. Fragrance sales in 2011 had benefited from higher-income shoppers who felt more comfortable spending on others and themselves as the economy improved. The 2011 blockbuster launch of Justin Bieber also contributed to strong growth in 2011 as teenagers and young girls pestered their parents to buy them the pop singer’s fragrance. In 2012, there was no must-have celebrity fragrance to entice consumers.
[UPDATE -11/18/13 — For an in-depth analysis and report on the money, astonishing sales figures, and profit leaders in the celebrity perfume industry, you can read my new article Celebrities, Best-Selling Fragrances, Sales Figures & The Perfume Industry.]
The Cosmetic Group report and the Euromonitor also add a few other details that are interesting and which I’ve summarized as follows:
- The Fragrance sector is expected to have the slowest growth out of the US Health & Beauty sectors in the upcoming years.
- Female fragrance remains the largest sector of the market, but male fragrances are expected to post better growth and numbers this year.
- Like last year, L’Oreal USA is the market leader. Its strength seems to lie in the mens market, thanks to the number one selling fragrance, Acqua di Gio, as well as Drakkar Noir and Ralph Lauren Polo For Men.
- In Premium Women’s Fragrance, it has strong sales from Lancome’s Tresor and Miracle, Viktor & Rolf’s Flowerbomb, and Ralph Lauren’s Romance.
On a positive note, the report states that niche perfumes are offering a glimmer of hope for a market heavily impacted by the recession. Unfortunately, it offers no numbers or details on the niche sector. The Euromonitor analysis report warns that fragrance companies need to do something to deal with over-saturation:
With the appeal of niche fragrances in the premium segment, affluent consumers appear to have regained their interest in fragrances. Premium niche fragrances that are sold in limited distribution channels allow affluent consumers to feel that they have made a discovery. At the same time, manufacturers of fragrances will need to address consumer apathy and confusion. There has been an explosion in the use of scents beyond fine fragrances, with everything from hand dishwashing soap to fabric softeners to women’s razor handles now infused with scents. As a result, fragrances have lost their mystique and become less “special” and commoditised. With more than 100 new launches of fragrances a year, the glut of fragrances in the marketplace has also created consumer confusion. The saturated environment in fragrances has arguably contributed to consumer confusion and apathy, making it very difficult to make a brand stand out.
IFF:
According to the Cosmetics Design group, the fragrance and flavouring giant, IFF, is doing well with second-quarter sales up 5% to $757.6 million compared to $721.3m for the corresponding period in 2012.
IFF has reported strong growth for its second quarter, driven mainly by an exceptional performance in the fragrance division, together with gains in all geographical regions including Europe.
A Market Watch article has more specific quarterly numbers:
— Reported sales increased 7% to $383.6 million, compared with $359.9 million in the second quarter of 2012. Excluding the impact of foreign currency, local currency sales increased 8%.
— Fragrance Compounds achieved local currency sales growth of 10% in the second quarter, more than offsetting a 1% decline in Fragrance Ingredients this quarter.
— Within Fragrance Compounds, our Fine and Beauty Care category had local currency sales growth of 13%, driven by double-digit growth in Latin America, North America and EAME. Functional Fragrances had local currency sales growth of 7%, led by double-digit growth in Latin America and Greater Asia and solid growth in EAME. This marks the 20th consecutive quarter of growth in Functional Fragrances, due to a strong level of new wins as a result of our three-pillar strategy.
— The emerging markets represented 52% of Fragrances Compounds sales this quarter. Within Fragrance Compounds, the emerging markets grew double digits in the second quarter over the prior year quarter, reflecting broad-based geographic and category growth. The developed markets, which represented 48% of Fragrances Compounds sales, also had strong growth.
— Fragrances segment profit increased 13% to $71.9 million in the second quarter of 2013, up from $63.6 million in the second quarter of 2012.
The interesting bottom-line conclusion from all that is that emerging markets were the real source of revenue. While all markets reported a double-digit growth, the Cosmetics Design group emphasizes that “52% of the fragrance compound sales came from emerging markets.” Furthermore, fragrance compounds grew by 10%, while the sale of actual perfume ingredients dropped by 1%. A perfume guide I found on eBay explains “a fragrance compound” as follows:
All perfumes are composed of both a base and a fragrance compound. The perfume compound will account for 20 to 50 percent of the fragrance and is made from essential oils and synthetic fragrances. Perfume bases, which account for 50 to 80 percent of a fragrance, are generally made from liquids such as alcohol and water. They also include a variety of stabilizers, which are used to fix a perfume’s scent and ensure that ingredients do not separate.
In short, it seems that IFF’s main source of revenue was a pre-existing compound base for a fragrance, as opposed to a more specific ingredient such as, say, lavender oil or jasmine oil.
GIVAUDAN:
According to a report by the Cosmetics Design group, Givaudan controls 25% of the global fragrance and flavouring market. And, in 2013, a good portion of its revenues came from the Latin American sector. The report states:
- International fragrance, consumer products and flavor giant Givaudan reported a 5.7 percent growth in sales for the first half of 2013, with a solid performance bolstered by high growth in Latin America and other emerging markets.
- In particular, the company’s fine fragrance unit, which had declined 5.5% in the first quarter, recorded growth of 2.5% in 2013 due to new wins and volume growth in Latin America.
- The company pointed to Brazil as a particularly strong area for fragrance sales growth, with overall fine fragrance sales in the region described as “double digit.”
- Givaudan’s overall fragrance sales increased by 5.5%, to CHF [Swiss Franc] 1,047 million. [My note: a Google currency conversion shows that “1047 Swiss Franc equals 1135.70 US Dollar.]
GLOBAL FRAGRANCE MARKETS:
A long time ago, I posted an article on Cultural Differences in Perfume Tastes between the U.S. and European markets. One of the issues that article addressed was the question of the hottest or biggest perfumes in each market for a specific year. In a discussion that ensued in the comment section, I referenced some U.S. market statistics that I had found for the fragrance sector from the Statistic Brain. I think it would be useful to repeat it again here. Relying on numbers from “NPD”, the 2012 numbers for the fragrance industry break down to:
| Perfume Industry Statistics | Data |
| Annual global perfume industry sales revenue | $27.5 billion |
| Annual US perfume industry sales revenue | $5.2 billion |
| Percent of American women who don’t use perfume | 17 % |
| Number of perfume brands carried by US department stores in 2002 | 756 |
| Number of perfume brands carried by US department stores in 2010 | 1,160 |
| Percent of fragrance market held by Coty Inc | 13 % |
| Percent of designer perfume brands priced at over $75 | 46 % |
| Percent of celebrity perfume brands priced at over $75 | 1 % |
The Cosmetic Group has some global numbers for the fragrance market, though they’re from 2009:
| Table 1: Fragrance market sizes by region, 2009 (US$m) | ||
| 2009 | ±% | |
| World | 36629.5 | 3.8 |
| Asia Pacific | 2468.9 | 3.8 |
| Australasia | 486.3 | 1.9 |
| Eastern Europe | 3536.8 | 3.3 |
| Latin America | 8531.2 | 15.8 |
| Middle East & Africa | 2652.3 | 13.8 |
| North America | 5866.4 | -5.9 |
| Western Europe | 13087.5 | -0.1 |
| Source: Euromonitor International | ||
| Table 2: Fragrance market sizes by country, 2009 (US$m) | ||
| 2009 | ±% | |
| Russia | 1790.9 | 4.9 |
| Brazil | 4812.5 | 16.7 |
| China | 511.3 | 9.2 |
| India | 117.5 | 16.5 |
| US | 5294.7 | -6.5 |
| France | 2504.7 | -1.4 |
| Germany | 2531.7 | 0.8 |
| Italy | 1406.9 | -1.2 |
| Spain | 1780.8 | -3.5 |
| UK | 1492.6 | 3.2 |
| Source: Euromonitor International | ||
| Table 3: Premium global fragrance market vs mass global fragrance market | |
| % breakdown | |
| Premium | 55.4 |
| Mass | 44.6 |
| Source: Euromonitor International | |
| Table 4: Leading fragrance brands, 2009 | |
| Brand | Company |
| Avon | Avon Products Inc |
| Natura | Natura Cosméticos SA |
| Chanel | Chanel SA |
| Calvin Klein | Coty Inc |
| Christian Dior | LVMH |
| Giorgio Armani | L’Oréal Groupe |
| Estée Lauder | Estée Lauder Cos |
| Hugo Boss | Procter & Gamble Cos |
| O Boticário | Botica Comercial Farmacêutica Ltda |
| Yves Saint Laurent | L’Oréal Groupe |
| Source: Euromonitor International | |
THE JAPANESE & CHINESE PERFUME MARKETS:
Finally, I found a Cosmetic Design article from 2010 discussing the Asian fragrance market:
According to Euromonitor International, the fragrance market in Asia Pacific grew 5% in 2010, reaching US$2.7bn and the outlook shows a similar level of confidence for the next few years. Despite its economic woes Japan remained the largest consumer market ($585.9m, -2.6%) but the devastating tsunami that hit the country in March this year will undoubtedly have caused additional problems spanning raw material supply, logistics and retail.
China’s burgeoning consumerism looks set to help the country take the number one spot very soon however; it posted a 7.8% sales increase to reach $553.3m in 2010. Strong growth was also recorded in Vietnam (+21.2%, $21.5m), India (+20.2%, $139.8m) and Indonesia (+15.6%, $146.1m).
In a separate report from May 2013, the Euromonitor has some interesting assessments about the Japanese fragrance market. Given how some niche perfume houses like By Kilian and Tom Ford seem to be targeting the Asian luxury market with releases like Flower of Immortality and the Atelier d’Orient collection, the numbers for Japan don’t seem to bode well:
- Current value sales of fragrances declined by 7% in 2012. Although Japan has the second biggest market for beauty and personal care, and carries one of the most developed and mature cosmetics markets around the world, Japan’s fragrances is still in its infancy, totalling mere a ¥42 billion in 2012. Japan ranks 45th for per capita consumption of perfume and this demonstrates low penetration of fragrance use among local consumers.
- Competitive Landscape:
- Fragrances is fragmented in Japan. ‘Various distributors’ parallel import foreign fragrances with 83% value share being sold through store-based retailing in 2012. ‘Various distributors’ accounted for 24% value share in 2012, with the leading distributor, Bluebell Japan, leading the field. Bluebell Japan has been operating in Japanese fragrances since 1954 and the company distributes 25 international fragrance brands, including Bvlgari and Gucci.
- Fragrances is anticipated to decline by a constant value CAGR of 5% over the forecast period. Lack of experience in using or even seeing fragrances during childhood is one of the biggest reasons for a continuous contraction of fragrances in Japan. Although consumers are demonstrating growing awareness towards smell in general, much attention has been paid to deodorants and other scented products such as laundry detergent among consumers. As Japanese consumers have a core value to prioritise group needs and pursue harmony, troubling others should be avoided by any means. Such traditional values shared among the Japanese might have discouraged the regular use of fragrances because the majority of consumers prefer a light scent and one could offend another by wearing a different or stronger fragrance. In addition to unfamiliarity to fragrances, Japan’s traditional culture may continue to hamper sales of fragrances over the forecast period.
The perfume market isn’t huge in China, either. In April 2013, Euromonitor‘s breakdown for the Chinese fragrance market was as follows:
- Given the value sales of RMB4.6 billion in 2012, fragrances in China remained a relatively small category; around one 18th of skin care in value terms. The year-on-year current value growth was 9% in 2012, compared with 12% in 2011, mainly due to the negative impact of the economic downturn. Apart from economic reasons, the lack of new launches in 2012 also explains the relatively lacklustre performance of the category. As a whole, product penetration is quite low in even top-tier markets, and fragrances are just seen as unnecessary products by most consumers. No remarkable changes have been seen in consumers’ acceptance of fragrances – the Chinese account for 20% of the world’s population, but only contribute 1% to value sales of fragrances. The average Chinese person is not used to wearing perfume, unless they are extremely particular about their image, usually those who work for international companies or as high-ranking executives.
- Despite the large number of brands present in the market, fragrances in China continued to be dominated by international companies in 2012 in value terms. Chanel accounted for a 12% share of value sales in fragrances, followed by Parfums Christian Dior with 8%. Calvin Klein Cosmetics, Hugo Boss and L’Oréal China were in third, fourth and fifth place respectively. These world-famous companies have established high brand awareness amongst Chinese consumers, as they have in international markets, mainly thanks to continued investment in advertisements on television and in fashion magazines. A report on Chanel N°5 about its allergy-inducing ingredient triggered a possible sales ban from the European-based Scientific Committee on Consumer Safety in late 2012. Therefore, more fragrance enthusiasts may become cautious about choosing products, yet the impact on Chanel’s sales in China would be minor in 2012, given the fact that the incident occurred in November in the year of 2012.
- Fragrances is expected to witness stable growth in China over the forecast period, with a CAGR of 8% in constant value terms. Considering the currently low penetration, as consumption is still at the preliminary stages, fragrances is expected to have huge potential in the forecast period. Increasing incomes and the rising attention paid to personal image will lead to higher acceptance of the use of fragrances in China. However, most consumers consider that fragrances are not a daily necessity. Therefore, direct selling companies may have more advantages in engaging beauty advisors to influence customers, by convincing customers how important it is to wear fragrances to boost one’s image.
ALL IN ALL:
I don’t like to inundate people with numbers, but I think the breakdowns listed above are interesting for a few reasons.
First, it seems that the fragrance giants who create the ingredients and building blocks for perfumery are doing very well, but the market as a whole has softened. Over-saturation is an obvious problem; Forbes magazine listed over 600 new fragrances just for women alone in 2012. If one assumes that the men’s division gets even half of that number, that would be over 900 fragrances released in a single market year. And who did the best in 2011? It might be Justin Bieber, horrifying and repugnant as that thought may be, and the company which produces his creations (Elizabeth Arden).
Second, the Asian luxury market may not prove to be the financial savior that some perfume houses expect. If the European or Western markets are suffering due to recessionary (or other) concerns, the Asian ones have other problems. General stereotypes about different cultural perspectives in the East may be backed by the financial numbers of perfume use or sales in such markets as China and Japan. The niche and commercial fragrance houses who hope to shore up soft Western sales will have to deal with such socio-cultural issues as consumers unused to fragrance from childhood (“Lack of experience in using or even seeing fragrances during childhood,” as the Euromonitor put it), or the thought that fragrance isn’t a daily necessity. In some ways, therefore, you might see the current generation as the foundation for future sales growth. Results down the road will yield a benefit, but how much will they increase revenues in the immediate future?
Lastly, when you take all the various issues and compile them together, the main question for me personally is this: how can the market sustain the increased prices that we’re seeing every year? Chanel just raised its prices for Les Exclusifs: a 2.5 oz bottle of Coromandel that was just $130 a few months ago is now $160. Dior’s Privée Line went up from $155 for the smallest size (4.25 oz) to $170. Tom Ford’s smallest size of 1.7 oz increased from $205 to $210. Niche perfumery may be a “glimmer of hope” for some fragrance groups, but, given the prices in question, how can the overall consumer market handle things in the long-run?
On a parallel tangent, when the more established, big houses like Chanel increase prices to such an extent, what does it mean for truly niche perfumery? One doesn’t see parallel sort of price jumps in houses like, say, Neela Vermeire Créations, Andy Tauer, Parfums d’Empire, or Vero Profumo. Yet, those brands hardly have the same financial backing as a LVMH brand like Dior, or the deep-pockets of Kilian Hennessey. The smaller, truly niche houses don’t have the same sort of retail exposure or high-profile, even though they are increasingly better value for the money and quality in question.
And how does the whole IFRA/EU situation impact their chances to compete? This summer, in June, Andy Tauer’s personal blog talked about how it was becoming increasingly hard for artisanal perfumers to function within the EU. He linked to a 2009 EU regulation, No. 1223/2009, on cosmetics which detailed everything from packaging to the ingredients therein. It’s enormous and, even as a lawyer myself, it was a chore to glance through it. As Mr. Tauer noted, “Please have a look at the pdf file and imagine what it must feel like, for a young entrepreneur, somewhere in one of the EU countries, who wants to start a perfume = cosmetics business. […] Basically, you cannot do artisanal perfumery in the EU.”
When I was younger and learning Latin, I learnt “Fortune favours the brave” (or the bold). The famous phrase “Fortuna audaces iuvat” (variously attributed to Virgil, the playwright Terence, or Pliny the Elder) always seemed a little glib to me. There is more than boldness, bravery, or good luck that is required to succeed in life, though they certainly help. Actual money drives things, too. As globalisation continues full-force and conglomerates expand their reach, consuming many smaller companies within their path, truly niche perfumers will have a harder time of things by virtue of comparatively reduced resources and opportunities. Yet, obviously, it’s these niche artists who are the true engines of innovation, change, progress, and quality, not the Estée Lauder or Elizabeth Arden creations that are the primary focus of groups like the Fragrance Foundation with its FiFis. [Update: you can read more about niche versus mainstream brands and how each segment is doing in a 2014 post on Estée Lauder’s acquisition of Frederic Malle; the second half talks about Estée Lauder, L’Oreal, Elizabeth Arden, Coty, and P&G, as well as how niche sales are doing in comparison.]
Clearly, I’ve strayed from my main point about the state of the mass, commercial, perfume market in 2012 and 2013. And the state of the union is extremely strong, thanks to perfume addicts like you and me. Together, we have contributed to global sales figures in excess of $27 billion — BILLION — in 2012. One can only imagine how those numbers will increase in the years to come.
Ego sum fascinavit. Forbes seem to differ from Octavian / Micheal Edwards who cite around 1330 releases from 2012. I think the difference must be that niche is not included in the Forbes figures. It really is game on for the industry. Thank you for compiling this. I hope you do so periodically. This is almost a case for brands to decrease their prices. Hmm.
You’re very welcome, my dear. I thought of you while compiling it, as you and I have often discussed the issue of the Asian market. 🙂 As for Octavian’s numbers, I’m sure it is a comprehensive figure which includes mens’ fragrances, in addition to women’s and niche. The Forbes number pertains solely to womens’ fragrances and, quite possibly perhaps, only to mainstream releases at that. Octavian’s figures are probably the full, sum total.
As for the softening sales market in the West warranting decreased perfume prices, I wish! Someone at Chanel clearly doesn’t feel the same way. 😉 Their recent price hike for the Exclusifs seems to be the biggest by far. I think Undina calculated it as a little under a 25% increase, or something like that. (She has the facility for numbers, not me, so I will leave it up to her to jump in with the specific percentage, especially as all these figures have made my head hurt. lol)
Well… Technically, it’s 23% but only if you count it from the last price. The previous increase happened in January of this year. Compared to the previous price it’s a 45% raise in less than a year (2.5 oz EdT was $110 a year ago and now it’s $160). I’m not going to buy any Exclusifs for a while.
I knew I could count on you for the numbers!! You know, the degree of the increase at Chanel makes me wonder about how well their fashion lines are doing, post-recession. An article I read a while back (on the NY Times, I believe) said that many fashion houses support their supposed “main” core business (clothing collections) only through the cash infusion from their beauty and fragrance lines. Without the money from those, there was no way they could do Haute Couture and sustain themselves. I believe Armani was one of those that was explicitly mentioned.
The fact that Chanel has a price hike of 45% in less than a year makes me think they can’t be doing so well on other fronts and need the increased revenues to shore up/hide their financial bottom line.
I’m glad it was brought up that they raised their price TWICE in less than a year, and not by inconsequential amounts. Huge price increase! Luckily, it’s still fairly affordable as far as price/ml goes for a “niche” or “niche-adjacent” scent.
I was thinking today just how much I envied your foresight and wisdom in buying that extra-large bottle of Chanel’s Coromandel way back when. I so, SOOOOOO wish I had followed your lead. I’ve actually been kicking myself nonstop over it all for the last 10 days. Also, I keep thinking, if I don’t buy it now at these currently ridiculous prices, how much worse will it be in eight months from now. And, you know what? The thought of that inevitable, further price hike just pisses me off even further! Grrrrrr.
Fascinating. I’m forwarding this to my friend.
I’m glad you found it interesting, Mike. The numbers are staggering, aren’t they?
Thank you for this very very interesting analysis.
It is sad to see perfumery, such a beautiful art, led by money.
I hope small brands and real, original perfumer and creator will make it in the future.
Let us hope that truly niche brands like Parfum d’Empire, Neela Vermeire Créations, Andy Tauer, or Vero Profumo will resist to the big industry.
First off, welcome Candice! It’s always lovely to see a new face. 🙂 I’m glad you found the analysis interesting, even if it is depressing. As for the truly niche brands, my fear is not that they will sell out, but that they won’t be able to sustain themselves competitively in the long run in a very aggressive marketplace dominated by such behemoth giants as LVMH. Anyway, thank you so much for stopping by and sharing your thoughts. I hope to see you again. 🙂
I read some of the numbers before but it’s still fascinating.
I just found out that I do not know two of the “leading brands” – Natura and O Boticário. Do we know any of the Brazilian perfumes?
No, I’m afraid I don’t know any Brazilian brands. I found it interesting that they didn’t mention Mexico as a very profitable market. I know it’s not technically “Latin America,” but I’ve read that the Mexican beauty/fragrance market is quite robust.
Mexico is actually Latin America lol, at least the culture and people that live in Mexico definitely count as it. The fact that Mexico isn´t mentioned doesn´t surprise me since people in this country are obsessed with cleanliness, bathing very frequently so it´s more like a shampoo/soap obsession, not perfume, really people that use perfume are in the minority. There is a definite obsession with makeup, clothes and even hair dyes but not with fragrances and the ones that are used are just the truly atrocious, commercial ones Katy Perry fragrance, Justin Beiber, Brittany Spears etc. 🙁
Ah, thank you. I’m never sure as to how geographers may classify Mexico in terms of Central, Latin/South America. I’m not talking culturally, but more in terms of the technical, geographic classification. Either way, I know Mexico has a very strong market for Beauty products, but perhaps they are slowly, slowly starting to appreciate perfume a little more as well. 🙂 Since the financial breakdowns pertain almost entirely to commercial scents like the ones you mentioned (Justin Beiber, Brittany Spears, Katy Perry, etc.), a growth in that sector would seem to go with your personal experiences about people’s tastes there. 🙂
Very interesting article indeed and very interesting comments from your followers.
Regarding mexican perfumes market, oh yes, mexicans are very into perfumes, happens that “countertypes” both formal and informal market is huge (60 -70% maybe?). Major perfumery houses (certainly not Givaudan, IFF or Firmenich) have a significant share of their revenues in selling this type of fragrances.
Hi Armando, welcome to the blog! Thank you so much for stopping by and sharing your extremely interesting insights! So, could you explain more about the “countertypes”? I don’t want to make assumptions or misread the phrase. You’re not talking about counterfeit fakes, are you? As in copies of established scents like Chanel No. 5 or Shalimar? If you are, can you explain how the “major perfumery houses” in Mexico are profiting? To me, it would seem like counterfeit fragrances would be something that a really major perfume house wouldn’t do. More like counterfeiting houses. I’m sure I’m misunderstanding though, so perhaps you can explain further if you get the chance? 🙂
Thanks for your response. Yes I´m talking about counterfeits, huge market here, perfumery houses sell to counterfeit makers, formal or informal, their versions of fine fragrances developed for deos, body mists, even shampoos. Some even CGL’s the originals and develop as close versions as possible to enter this market since first to present a versión of a recent fine fragrance launch wins the “lion´s share” of the business. The excess in launchings and the lack of creativity in the fine fragrance segment makes this “more” posible.
All these huge numbers and figures look enormously scaring but also fascinating, like Undina said it!
The EU directives that Andy Tauer mentioned and linked make me sad because it makes me realize that if I want to establish my own perfume brand once in the future I might not be able to do it because of the restrictions – unless they change, and they’re probably unlikely to change. Sheesh!
The EU Directive is definitely a big obstacle to new, independent or artisanal perfumers. It’s almost an anti-competitive law in some ways. It helps boost the big beauty/fragrance monopolies by discouraging true market equality and competition at its core. Very depressing.
Thanks for the indepth and informative information K. I would have expected that that the Asian markets would have been a boon for the industry, never thinking culturally that fragrance is not part of the lifestyle. However, I do see an opportunity to for large luxury corporate branding opportunities…they like their Gucci bags, they’ll eventually like and want Gucci perfume too. Thanks again for the expose! xoxooxx
I think what happens now will lay the foundation for the future, thereby making this current generation in Asia the Generation Zero in a way. As I said in the article, the benefits may not be immediate, but I’m sure they are there in the long run because you’re right, they do love their luxury brands in some categories, like bags!
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Quite interesting, Kafka. I tend to think, as the Scented Hound does, that in Asian markets where there seems to be a hunger for designer handbags and accessories, over time we might see them coming around to perfume. I’m thinking China, not so much Japan, as from your report, the Chinese are simply not accustomed to wearing fragrance, whereas in Japan, I do indeed get the impression (from friends who have traveled there) that what is referenced in that one report is quite true, about the cultural emphasis on maintaining harmony. (“Japanese consumers have a core value to prioritise group needs and pursue harmony, troubling others should be avoided by any means…”)
As for the statistics from the US, what surprised me most was that only 17 percent of women here don’t use perfume. I would have guessed that percentage to be much higher.
I agree with you, Suzanne, China has much more potential than Japan due to the latter’s cultural/philosophical values. As I told Mr. Hound, I think the work they are doing now will yield dividends down the road when the current generation becomes akin to Generation Zero for perfumery and fragrance habits.
But can the overall, global market sustain these high prices in the meantime without damaging itself until the Asian sector can help shore it up? The price hikes can hardly be commensurate with actual production costs, so they’re there solely to boost the corporate bottom line and make fashion houses like Chanel seem as though they’re not losing money. But how long will consumers go along with it all?
A 45% increase in Chanel Exclusif fragrance prices in *less* than a full calender year? Madness! This time last year, I could buy a small bottle of Coromandel for $110, and now it’s $160 — $50 more in less than 12 months. I had hoped to buy the LARGE bottle of Coromandel this year, but guess what? I probably won’t. I’m almost angry because I feel as though I’m being played as a sucker in some ways. 🙁
I wonder if the 17% includes women who own or wear any perfume at all during the year, instead of the higher bar of wearing perfume every (or almost every) day. It seemed low to me, too.
The rising prices I think might reflect the desire of corporations to ignore the shrinking middle class in favor of chasing the small in number, but growing exponentially in income, wealthy consumers.
The 17% figure was for women who do NOT use perfume, so 83% of American women do wear it. I think that number is high, in a happy, positive, good way. What would be interesting is to see the number of women who do wear fragrance daily. I saw some statistic, somewhere, some time ago, but I can’t recall the details. Actually, it may have concerned the number of women (in the UK, maybe?) who owned more than a few different bottles of perfume. That number was quite low, something like 9% or 15%? I wish I could recall more details. Anyway, that number seemed very low to me.
As for the rising prices, I’m sure you’re right and the issue you noted is one of the (several) reasons for their decision. Yet another reflection of how everyone courts the 1%….
Oops, you’re right, I meant “includes women who don’t own or wear any perfume during the year.” Then the 83% would include women like my grandmother, who had a very pretty mirrored tray of bottles that she’d been given over the years, but never, that I can recall, wore any of them. I’d also like to know the percentage of Americans who wear perfume daily.
Is this the grandmother of yours who was very strict and proper, but wore Tabu? (Or am I mixing you up with another commentator on the blog? If so, my apologies.) Either way, don’t you wish we had a hold of those perfumes today? I certainly do! 🙂
This grandmother was the daughter-in-law of my Tabu-wearing great-grandmother, and perfume was one of many things they didn’t agree on. I sniffed my grandmother’s unused perfumes repeatedly as a child, but the only ones I can remember now are Youth Dew and Tresor.
As an outsider, who used to enjoy wearing fragrance, I won’t be buying any in the near future. The cheap scents, with exorbitant prices are a total turn off. I’m old enough to remember when cheap perfume was reserved for the likes of Wal-Mart. Now it dons every department store counter in the United States and around the world. If the fragrance industry wants to shake things up, bring back the old school formulas, and send the cheap stuff back to Wal-Mart where it belongs.
Hi Leslie, welcome to the blog. Thank you for stopping by and for sharing your perspective. I agree with you, whole-heartedly. It’s why I cover almost entirely niche fragrances because that’s where the quality (and innovation) is nowadays. Department store fragrances are all about synthetics made in two or perhaps 3 main styles (fruity-floral, gourmand, and fresh/clean) and subject to focus-group marketing. Almost none of the celebs have any involvement in the fragrances that they give their name to. The whole process is not even about the end smell, even, but about something else entirely.
Perfumery has really changed from a few decades ago when a house like Dior or YSL would work years and years to create one single, really top-notch, unique scent. Nowadays, unfortunately, to get high-quality, real ingredients, done in the old manner with elegance and without a generic sameness, the only real choice is niche. Alas, you end up paying a hefty amount for that — though even commercial, mainstream scents aren’t cheap these days either.
Anyway, I really appreciate you stopping by and sharing your feelings about the industry today. Do you wear perfume at all today and, if so, are they vintage? Many of my absolute favorite scents are vintage treasures that one can only get from eBay, but they blow most modern fragrances out of the water, in my opinion.
I don’t currently wear fragrance, as I’m pursuing a career in healthcare. The cheap stuff doesn’t just make me sick. It would make everyone around me sick. I agree completely with your comments. If I were to purchase fragrance at this point, it would be from a niche brand. I don’t have any favorites, as my budget won’t allow for it at this point. We do not live near a boutique or high-end department store that might stock quality fragrances. Therefore, I’ve chosen no favorites. On rarest of occasion when I’ve had access to such, I let my nose lead me. I know what I like when I smell it, and pay little attention to brands. The bottle and colors attract; the nose yields a verdict. LOL! Looking forward to getting through school so I can partake once again. I’m just trying to figure out when things changed. I’m 40. I remember “regular” brands still having quality in my teens. It all changed shortly thereafter. Do you know when the shift occurred?
I have a tendency to put the changes at the start of the ’90s. In fact, I blame Armani’s Acqua di Gio for a lot of things: the realisation that the use of cheap synthetics made for high profit margins given actual cost of ingredients; the launch of the “fresh, clean” era of fragrances that don’t actually smell of fragrance itself but of Tide, fabric softener, or synthetic notes; and the creation of “flankers” that merely tweak an existing formula, instead of creating a whole new scent from scratch.
I blame Acqua di Gio for a LOT of things, but the perfume regulatory group, IFRA, is a culprit too. Along with the EU, IFRA has imposed regulations on the ingredients in perfumery, banning almost entirely certain key foundational elements like oakmoss. That’s at the heart of the entire chypre category of fragrances which is what many, MANY of the old classics used to be. Half of the most famous old legendary perfumes are chypres, but how can you make a chypre without oakmoss? How can you make lots of different types of perfumes if you’re banned from certain notes. Heck, the EU is currently mulling over a proposal to completely ban the production/sale of Chanel No. 5, along with a few other famous perfumes. Can you imagine? I don’t like Chanel No. 5, but the mere thought of banning it is outrageous.
If you take the many, increasingly restrictive IFRA/EU proposals on ingredients, combine it with other factors, what you get are perfume houses creating a whole host of perfumes that smell very much alike. Brands like Guerlain want to skew younger, to appeal to young women who may think their classics (which are all reformulated and which they can’t make in the same way anyway) are fusty and “old lady.” So they make ultra sweet, sugary fragrances or fruity florals. They use synthetics to lower their production costs, while raising prices, to make the most money. And the result is a sameness throughout. When you add in the fact that some perfume brands (like Armani, Chanel, Dior, etc.) use their Beauty/Fragrance divisions to totally fund and support their fashion lines, then making money from perfumery becomes even more important. Which means more fragrances each year, on a quicker, rushed, hurried production schedule that focuses on the financial bottom line instead of creating one, high-quality, expensive, luxurious and unique masterpiece every 4 or 5 years.
In short, it’s a perfect storm of various different factors swirling together to result in what many experts have called the end of the age of classic perfumery. It really has ended for some things entirely, as true, genuine chypre fragrances are essentially almost an extinct species. So too are Oriental fragrances built around sandalwood, since Mysore sandalwood is so rare and endangered, it is too prohibitive to use. In the old days, all orientals had copious amounts of sandalwood; now, it’s nothing but ersatz, fake synthetics or the bad Australian kind (which is wholly different and unrelated). Goodbye to true sandalwood fragrances as well. Fragrances with lots of orange blossom essential oils and some other citrus oils? Bye-Bye to the same quantity, type and feel there too, thanks to the IFRA restrictions which have lowered the amount which can be used. All in all, it’s thoroughly depressing.
I hope that you will get to try a new niche fragrances. Sites like Surrender to Chance are invaluable in offering every single possible fragrance in a small vial that you can sample and test out. (It’s where I get my stuff.) Of course, that doesn’t change the issue of the perfume’s cost, or the fact that your career in healthcare limits how/what you can wear. I definitely agree that the cheap stuff would be problematic. Hell, it gives me headaches nonstop if I test them. Anyway, I’ve gabbed on too long, but I hope I answered your questions. I wish you all the best in your healthcare career and with school. It’s a really admirable thing that you’re doing! 🙂
Fantastic Article! I I am very impressed and intrigued by the numbers as someone who worked in fragrance industry for a while.
Hi Jelena, welcome. Thank you so much for your kind comments, and I’m so glad you found the numbers interesting. 🙂 What did you find most intriguing or telling? As for the industry, it’s certainly changed a lot since I first started getting into perfumery, decades ago, when I was very young. You yourself must have seen a lot of changes, in everything from the pricing to the popularity of certain categories/types of fragrances. I hope you’ll feel free to share any trends that you may have noticed. 🙂 Thank you so much for stopping by.
Thank you for a fascinating, if disturbing, article. I too bought a 75ml bottle of Coromandel earlier this year and am kicking myself for not having bought the 200ml one. But like you, I’m also so annoyed at the TWO price hikes that I’m strangely reluctant to buy anything from them now. I wonder whether this price point strategy will backfire; surely we can’t be the only customers who’ll react this way.
Interesting about the Japanese market – the summary hits the nail on the head, I think. If I were in the biz, I’d try marketing the bolder perfumes (or stronger concentrations) as personal fragrances to be worn at home as a private indulgence. This would allow consumers a safe way to experiment with fragrance while avoiding the social taboo of disturbing others. (Well, in theory the spouse might be disturbed, I suppose, but if the fragrance was purchased with the spouse’s tastes also in mind, it would actually reinforce the social-harmony aspect.)
By the way, I’m not Japanese but I do study Japanese tea ceremony. My experience is that in traditional culture, at least, there is exquisite sensitivity to fragrance, it’s just that its group use is strictly constrained. For example, in the tearoom you use sandalwood (byakudan) chips in summertime and aloeswood-based kneaded incense (nerikou) in the winter. There is a whole ‘incense ceremony’ that focuses on aloeswood (kyara) alone, and it is most definitely a social activity in which the participants assess different incenses together. Sometimes I wonder if Japanese-style oud fragrances might be successful if approached a certain way…
First, welcome Chamekke! (I love your Gravatar image, by the way!) Thank you so much for stopping by and sharing your insights. How fascinating about the various woods used in the Japanese Tea Ceremony. I too studied it, but briefly, in a historical context, and a very long, long time ago. Nothing like you, though, and how cool that there is an actual incense ceremony!! Do they use Hinoki wood at all?
As for the Japanese market, do you think that the Japanese could think stronger perfumes could be a private, personal indulgence at home? Would the heaviness not be an issue with bolder fragrances? There is a lovely perfume blogger who is English but lives in Japan, and he says the weight and strength of Western fragrances is something that the Japanese don’t really like. I think it may be hard to change their minds, even if the context were moved to just indoors and behind closed doors. Either way, even if there were such marketing, I think it would take a long, long time to have a significant effect in changing the culture.
With regard to the Coromandel, how great that you’re another fan of the fragrance. But the price hikes….. gah. If they’re chasing that tiny sector of consumers who don’t care about prices at all, that’s one thing, but are there enough of such consumers to actually prop them up in the long run? We’ll see. They’ve clearly annoyed some of their base, people like you, me and a few other posters here.
Anyway, it was lovely of you to stop by and I hope you will do so again in the future! I so appreciated your insights into Japan and some of its cultural, historical traditions. 🙂
There’s no use of hinoki wood in Kōdō (incense ceremony) as far as I’ve been able to learn, the emphasis seems to be on pure aloeswood – which is heated rather than burnt. There are traditionally 6 different origins of aloeswood in what’s called a rikkoku set, and 5 “flavours” that any single aloeswood piece may have; so the incense ceremony mainly involves mindfully inhaling the aroma of the different pieces and trying to identify them. (I should say that I’ve never had the good fortune to attend an incense ceremony – it’s almost never held outside Japan itself – but someone did generously give me a small rikkoku set once, and — wow. Let’s just say that if the perfume industry is ever able to bottle THAT fragrance, I’ll be the first in line!)
Anyway I was going to say that hinoki does feature in many ‘burnt’ Japanese incenses, along with other traditional ingredients (benzoin, cloves, sandalwood, camphor, star anise, etc.), it’s just that it’s not used ceremonially – to my knowledge. But people do use it to scent their homes.
The other use of ‘scent’ that is really distinctive Japanese is the chakōro or “tea burner”. It looks a lot like an essential-oil fragrancer except that it’s unglazed, and it’s used exclusively for heating tea leaves! This removes unpleasant household aromas (very effectively!) and replaces them with the delicate fragrance of tea. You can find them sold as “tea incense burners” sometimes in the west, although they’re still not known much outside Japan.
You’re right that the Japanese are unlikely to go straight from delicate, watery fragrances to powerhouse sillage monsters. I think any change in taste is going to be incremental and very slow. So yes, it will take a long long time. But if I were looking to crack this particular nut, that’s the tack I’d take. (Whether it’s worth the effort and time involved is another question, of course 😉
I think maybe the answer to the Chanel dilemma is for more of us to split bottles. I’ve never done a split with anyone (partly because I’m Facebook-averse – apparently FB is the place to go for perfume split opportunities?), but I’m definitely considering it now. If it’s a toss-up between buying an expensive 75ml bottle and splitting an admittedly-expensive-but-much-less-so-if-you-share-the-cost 200ml bottle, the latter seems infinitely more attractive. Plus, I’ve already got a 75ml bottle to put my share into <333
Utterly fascinating! I can’t tell you how much I enjoyed every bit of your explanation and all the lovely details. Thank you! Seriously, thank you for taking the time to write all that and to share it with me. It was all new to me, minus the bit about the chakōro. I’m utterly fascinated by this incense ceremony. How I wish I could participate in one!!
With regard to splits, Facebook groups aren’t your only option. Basenotes has a whole board devoted to it. One of the readers of the blog gets all her decants from Basenotes because, like you, she abhors Facebook. There is one chap in particular that she buys from and he gets a wide range of fragrances from expensive to ultra high-end perfume houses like Amouage, Puredistance, Profumum, Lutens and more. As for your 75 ml bottle, did you finish it all already? If so, you’re my kind of perfume addict! And long live Coromandel! 😉 You know, if you like that, you should consider trying to get a sample of Dior’s Mitzah. It’s just been discontinued, but existing bottles are still widely available from Dior, and it’s a real beauty of a scent. A cult hit, actually. There is even a faint overlap at times with Coromandel, so if it sounds interesting, you may want to check out my review for it and see if it sounds appealing. 🙂
Hello Kafka, long time no see 😛 , very interesting article you have here. I haven´t been around lately, since my life has been in a very rapid change, in just two months many things have happened to me, good and bad, I graduated college, may move to another continent permanently from November onwards, a very close relative of mine has unexpectedly died due to cancer (we didn´t knew he was sick until his illness was terminal and we didn´t notice anything bad was happening because we live in different countries) so really my life has been in a turmoil, with all that I mentioned above amongst other things. This market study is interesting because I would never consider Latin America as a strong market when it comes to fragrance, I know from personal experience that people that use perfume are in the minority, very few and the ones that do use perfumes just buy the commercial kind like the Justin beiber one or Chanel number 5 when the person is classy lol. Still this market study is truly interesting, since the place I remember smelling many different perfumes emanating from people is France ( will be in France again in November 🙂 ) and that would be Western Europe…Interesting read nonetheless 😀 .
Hi Vicki, so good to see you again. What a lot of changes you’ve gone through in a short while. I’m so sorry about your relative and his passing. I hope your family is holding up well. But congratulations on graduation and your possible move back to Europe!
As for Latin America, I think the point of the reports is that it is a new and emerging market. Not a historically set, established, strong one, but a market for the future which is displaying growth and increased sales. To the extent that the sales reports may possibly reflect slow, cultural or social changes, it is a sign for the future. 🙂
I have a couple of the Brazilian fragrances that my SO brought back from a trip to Sao Paolo – from the O Boticario and Natura lines. The Natura ones are more fresh smelling, and the O Boticario ones (at least the few I have) seem to be knockoffs of some foreign fragrances (such as the original formulation of Miss Dior Cherie). I hear the import duties are very stiff in Brazil, which would explain them knocking off foreign fragrances to make them affordable for the local population.
As for the Chanel price increases, I think they do it to maintain exclusivity, they really don’t care about accessibiity to the mainstream customer as that is not their target. I am glad that I did the bulk of my collection in the 2005-2009 period and have plenty to last me for the rest of my life. The reformulations and discontinuations are so distressing, as well as the stupid IFRA regulations. It makes me not want to buy any more perfume. There are a few niche houses that I will continue to follow, but my interest has been definitely diminished in the past several years due to the factors mentioned above.
Thanks for the insights on Natura and O Boticario, Tara! And how lucky that you bought the bulk of your collection so early, before all the reformulations and discontinuations! What are some of the niche houses that you continue to follow and which have stood out for you, despite your generally diminished enthusiasm?
I am a fan of Andy Tauer, Vero Kern, and Neela Vermeire, so I will continue to follow these niche perfumers. I also enjoy several of the Micallef fragrances, as well as Amouage, Frederic Malle and Serge Lutens, with the usual caveats especially towards SL and Amouage, as they have fragrances I used to love that have been ruined by reformulation. Comme des Garcons occasionally comes out with something interesting too, although lately it’s been more miss than hit, with the exception of Black, which I really enjoy.
Some great houses there, Tara! The first three that you mention, in specific, constantly reflect great talent and quality. 🙂 Hope for the future, indeed. 🙂
this was a fascinating read, thank you!
during my high school years in hong kong and singapore, there were a few perfumes that the wealthy girls wore – clinique happy, kenzo flower, ralph lauren romance – but most people i knew did not wear perfume. my mother didn’t either; my first perfume was a bottle of dior j’adore that was gifted to my mother, who didn’t want it and subsequently passed it on to me. a rather good “starter” perfume, i think, even if it’s not to my taste now. 🙂
there are cosmetics shops on every street in hong kong, each of which have a fragrance section, as well as shops providing niche lines like diptyque, amouage, etc. many visitors from the mainland come to HK to buy fragrances, too, since they’re cheaper in HK. it’s definitely true that the typical asian consumer prefers lighter, greener scents – the SA at the HK diptyque store told me l’ombre dans l’eau was the bestseller, and the jo malone line is doing extremely well – and there’s a big emphasis on brand name. perfume is still more often purchased as a gift rather for oneself in HK, so the money generally goes to the big names – chanel, gucci, etc – since it’s one of the cheaper “luxury” items one can purchase…
i am not sure about the future of the fragrance industry in (ex-japan) asia. the vast bulk of cosmetics-related purchases in HK have been, and will be, on skincare. and while the growing middle class is very brand-conscious, most prefer to purchase branded products that others can actually see. 😉
How intriguing and fascinating! Thank you so much, Julia, for taking the time to describe the perfume culture in HK, the reason for perfume purchases, and the types that are more appreciated. It’s wonderful to get the “view on the ground,” so to speak, even if it pertains to your highschool years. As for the future, I know that the beauty market is gigantic, flourishing, and extremely lucrative, but primarily focused on skincare (BB creams!). I can see brand sales growing with regard to bags and shoes, but I think it will take at least a generation for perfume to really make some inroads. Anyway, thank you so much for stopping by and for sharing your insights! I greatly appreciate it and hope you’ll feel free to drop in again. 🙂
As a market researcher – albeit qual, not quant – I found this interesting. I did find a small snippet from the 2012 UK Mintel report on usage (they want you to buy the thing…) on frequency of use – the base year will be 2011:
“Fragrances are used for a variety of occasions, from work to meeting with friends and special events, supporting sales. The number-one reason to wear fragrance is simply to smell good (70%), but it has become a routine for more than half of fragrance users (54%) and is a finishing touch when getting dressed up for almost half (45%).”
It doesn’t say what constitutes ‘a routine’, but still.
Very interesting. Thank you, Vanessa. 🙂
Fascinating! Thank you for compiling this. I, too, was a little surprised that the Asian market wasnt a hotbed for growth in the fragrance industry, though it does make perfect sense now. I am hopeful to see that change in the future. As several have indicated, the Asian market is one that is consumer laden and they enjoy their high end brands. I also believe that while there is a lot of tradition, there is also quite a bit of forward thinking. Perhaps this is a market that must be slowly tapped continuously before a furious growth eventually sets in.
First, welcome to the blog, Scentatorium. 🙂 Second, I’m so glad you found the piece interesting. I think the issue of cultural perspectives and usage to be revealing microcosms of larger societal trends, so I wish I could find analysis on more perfume markets. For example, Canada or Western vs. Eastern Europe! Perhaps one day. 🙂 As for the Asian market, the interesting thing will be to see just how long it takes, and the extent to which the celebrity culture may have an impact. After all, they follow people like Justin Beiber or Lady Gaga just as much as those in the West. lol. Anyway, thank you for stopping by and for sharing your perspective. I greatly appreciate it. 🙂
Wonderful article! I may am a niche and natural perfumer fan. I am see that now these perfumers are now offering bespoke/private line services to their perfumeries. Although I love this section of perfumery, they too can price themselves out. Unfortunately there are still so many people that do not understand indie, niche and natural perfumery that they get confused with those of mass market or simply know nothing about this underground market.
Hi there, Felicia, sorry for the delay in the reply. I’m very glad you enjoyed the piece and that you found it interesting. You raise a very interesting point about bespoke perfumery. I have to wonder, however, if the very nature of the service demands exorbitant prices from the most famous noses, if only to provide the exclusivity that the client demands. I suppose it really depends on the fame of the perfumer in question. Someone who wants a bespoke fragrance from Roja Dove would undoubtedly be disappointed if the price were reasonable enough to let others obtain a personalised scent very easily. Smaller perfumers, however, would not come with such expectations though. But you’re right that there are limits to everything in the end. 🙂
Thank you for stopping by and sharing your thoughts, as well as raising such an interesting issue. 🙂
Very interesting and quite complete study.
Giving presentation on perfumery worldwide, it does reinforce my knowledge and figures.
As to the good results of the perfume industry, why deny it and would say that in that case MONEY AS NO SMELL.
Merci, Alain, I’m very glad you enjoyed the piece and found it informative. 🙂
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Since these figures refer to data from 2009, and I am also very grateful for this extremely interesting article and comments, my question is ‘why’? Where is the non-US data for 2012 please?
I provided what I found from sources accessible to me. And non-US data is not easy to find, especially in sources available to me or in languages that I read.
The accusatory, aggressive nature of your tone perplexes me. You demand, “Why”? You demand, why not other years, why not non-US data? This is not a market research blog. I am not required to provide market share analysis, financial figures or industry data — for any year, for any region, or even at all. This is not a blog focused on industry sales figures. It is a blog focused on perfume reviews and analysis of the olfactory profile of high-end, luxury fragrances. Once in a while, I will stumble across something that I find to be interesting on the wider picture, do some digging, and present the information to my readers. It is a courtesy, a passing thing because it interested me. It is not an obligation. It is most certainly not my job.
I suggest you contact a market research firm for the information that you’re demanding. It may cost you several hundred dollars to get it, but then, that is their area of expertise and their actual job.
It was certainly not meant as accusatory or aggressive, rather as a question as to why the industry does not have such data available Kafka. Please accept my apologies if it seemed like a question directed at you.
Ah, in that case, let’s just start again. As a lawyer, I tend to focus on tone and nuance perhaps more than most, so please accept my apologies. With regard to the general question as to non-US data, there seems to be a few factors at play. It’s actually part of a larger issue that I debated recently with Helg from The Perfume Shrine.
First, there is undoubtedly an Anglo-Western or US/UK focus in a lot of these pieces. Two, non US/UK sources aren’t as readily available, or they may not have compiled information in the same way. The individual markets may also be more fragmented, in some ways, if we’re going to take into account various small EU countries or Asian, East-Asian markets that may not have quite the same interest or focus on perfume sales. I know markets like India and the like are booming, but do their researchers have such a tradition of examining the industry as a whole, long term, and with the same sort of empirical focus? I don’t know, but I would suspect it would be a new field for them.
Lastly, perfume sales have historically been a big deal in European or Western markets. As this piece intimated, the Asian markets like China and Japan may not consider perfume to be as important as something like luxury handbags, luxury watches, shoes or more traditional beauty products. I would love to see numbers for perfume sales in such geographic areas, but I probably wouldn’t be able to read it even if I could find such numbers. (I don’t read Mandarin, for example.) Lastly, I’m sure that some of these numbers for specific perfume houses are considered quite confidential indeed.
I know that none of this definitively and concretely answers your questions, and that it’s a lot of speculation, but, honestly, I have no other answer for you. I found it SOOOO impossible to find anything on other markets. It was a surprise to me, and I really checked the summary reports for a few different parts of the world on places like Euromonitor or the archives of the other group. It got to the point that I was quite shocked to find the thing on China and Japan. Perfume sales for things like celebrity fragrances have been around in Europe for a while, but even when I was doing my recent piece on such fragrances, I couldn’t find the European sales numbers for fragrances from people like Catherine Deneueve. I tried a few big European celebrity names to see what, if any, could be found regarding their sales. Nothing that I could easily see. It was quite frustrating.
Kafka, many thanks for this additional information. I am trying to glean some snippets of new information relating to Western Europe, particularly Germany which showed the highest revenue from this sector amongst all the other countries including France. In fact it was not a great surprise to me if you consider their general need for top quality products and the fact that Germany continues to grow in what is otherwise a sinkhole of money called the EU. If I manage to find anything I am more than happy to share what I find with others here. The more transparency we have the better.
Thank you once more for the enormous effort which went into your research and I hope to make up our initial misunderstanding by contributing data when I find it! Sherlock Holmes is on the case…
Our initial misunderstanding? I have no idea what you’re talking about….. 😉 🙂
I laughed at the “sinkhole of money called the EU.” Heh, all too true, it seems. I would love to hear anything you discover for Germany and its markets. You know, if various readers from different parts of Europe could scour their particular papers, sources, or business articles in the language that only they could read, it would be amazing. We could put together all their discoveries into one useful document, covering everything from the German market to the Finnish, Swedish, Balkan, Greek, Spanish, Italian, etc. How I wish it would be possible. What a picture it would provide! We’d also probably make a fortune from the information being compiled all in one place. *grin*
I totally agree. I have sent out a number of requests, and double requests, without success in receiving any input regarding industry data so far. I suspect that I can say for sure that Parfums d’Orsay Paris will not be contributing anything but that still leaves quite a few other names I will get around to following up with and sharing the response with others here.
I thought I might also share a factual story although I will keep the names anonymous. I would love to hear from others what they think.
I happen to frequent a certain niche perfume shop in Brussels. The ‘nose’ and all the staff provide fantastic service. I asked how they attract customers, to which the response was ‘we have loyal customers and sometimes people suddenly discover by chance that the shop exists’. I asked what marketing they do and why the website is still under construction. I understand that it has been like this for 2 years and the online sales services are ‘momentarily suspended’. Do they have any special events planned to attract their loyal and, importantly, new clientele at least in the weeks running up to Xmas to buy the expensive perfumes they sell? Not one. Have they ever thought of targeting high net value individuals in and around Brussels at any time in the year? Nope, not to mention affluent Antwerp not far away.
So if Mr Donie is reading this, and since he was not professional enough to respond to two emails I sent offering a coffee and some free input, how do you expect your wonderful shop to continue selling perfumes at 160 euros and more without any proactive marketing? (Not to mention the range of Tom Ford and other perfumes which cost considerably more!)?
I truly hope they continue and are successful but it seems to me, in the current economic climate, that everyone should be maximising their opportunities to find new customers and not just waiting for the odd passer-by to pay a visit inside.
What is the experience of other people here?
I fear you won’t get many replies or insights from others, Iain. This post may be one of the most read on the blog, but no-one ever comments on it. lol. As for getting industry data from the perfume houses themselves, I wish you lots of luck. Frankly, I’d be shocked if anyone volunteered precise numbers. If you do hear back from anyone, do let me know.
With regard to the situation involving the niche boutique, it does seem a little short-sighted not to have a fully functional website or e-store, not to mention the absence of any marketing. They clearly are not interested and want to pursue an old-fashioned approach. That is fine, but it certainly won’t expand their business. The amount of stores I link to….. I know people have bought from them. Clearly, the internet does send clients and sales to whomever is willing to spend the minimum amount of time on having a functional website e-store. But if they’re not interested in new sales or in expanding their client base, there is little you can do. Perhaps they’re so small that they think they can’t keep up with all the demands of an e-store? Or lack the money to invest in a proper web designer? Still, a small investment would go a long way, I’m sure.
Still no data…But I had the chance to see the infamous Mr Donier from afar when I went to the shop for a bottle of Comme des Garcons Black early tonight. He seemed to be curious about this jean-clad individual but said nothing to me. I enquired about the e-store and sadly it is still temporarily unavailable. This being Belgium the work may continue on the website front for a few years more. Having bought my 84 euro bottle of delight I also enquired about their range of Serge Lutens and could I have a small sample of his Borneo 1834 please? Sadly samples are now available only from Paris. Oh well, perhaps I should now get on a night train to gai Paris…
A Christmas Carol and the Ghosts of Christmas Past, Present, and Yet to Come
Once upon a time there was a company which was founded 5 years ago. In this company lived a man and his wife and a lot of creams. They loved their creams with just a few of the ingredients so synonymous with their country’s image.
No-one had heard of their company or their creams but they put all their love and devotion into making it the best blend of additives, colourings and, after just 5 years, they were ready to go to market in the following new year and bring joy to the world.
Earlier in that year a man had suddenly appeared at the door and offered them a perfume, and the couple were delighted to include it as part of their range of natural products.
The couple had forgotten to do any market research at all but a stranger appeared and advised them of the need to do so. The stranger set about finding out what experts thought of the creams and the new perfume, and markets and prices, pro bono for this was the Season of Good Will. The stranger presented his results to the couple who were kind enough to listen but insisted that finding ‘very hungry’ distributors was the best path forward to success because the distributors better know the 4 P’s of Marketing.
And so we move forward in our tale towards Xmas 2013 not knowing what the outcome will be of this classic story. But hoping, sincerely, that Ebenezer Scrooge will reflect on the past, the present and the future, and that the tale will have a happy ending.
Thank you for this great summary of the fragrance market -our clients who we have represented from the French Luxury Fragrance sector, tell me that aside from the US, which used to be their target for sales, now Russia, and Asia, are the markets they turn to for higher sales. The US market seems to function more on a PR level than anything, and for this reason we provide these fragrances with exclusive platforms for PR, such as the Oscars, which lends them the celebrity factor, that is critical for driving worldwide sales in other territories.
Welcome, and thank you for sharing your insights. Russia definitely seems to be a target of the more established, larger luxury lines, from Guerlain to Killian with their city exclusives. Personally, though, I think the Middle East tops both Russia and Asia at the moment in terms of places where the luxury houses are aiming to create vast in-roads. I’m curious, how do you define the “French Luxury Fragrance sector”? I focus primarily on niche lines, from high-end luxury to super luxury ones like Roja Dove and Puredistance. I suspect the goals for niche houses may be very different than that for larger, more mainstream, commercial brands like Tom Ford or Guerlain, both of which are backed with vast conglomerate wealth.
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My family has been in the distribution of perfumes and cosmetics for the past 50 years in the Latin American market with HQ´s in Panama. Very interesting data. Our biggest market is now Colombia and we are having quite the success in penetration of Chile. It is quite competitive but very protifable.
How interesting about Chile! I know that Brazil, and to some extent Colombia, Argentina, and Mexico have had quite a lot of growth in this area, but I didn’t know about Chile. Thank you for the information.
Stumbled here by mistake but as a fine fragrance expert who has worked at a few of the leading fragrance houses & brands mentioned in your post, I am very impressed! Your commitment to put together a report that most of my clients’ teams wouldn’t be able to so well speaks to a passion for the beauty industry. Reading this has made me realize how much of our strategy recommendations implemented by our prestige beauty clients are still not captured by traditional data sources and how our comprehensive market analysis serves our clients well–and, one day, the consumer!
Thank you for your kind note and the high praise. I apologise for the slight delay in replying, as it’s been a rather hectic few days, but I greatly appreciated your compliment. I was interested by your comments regarding “traditional data sources” not capturing much of your strategic marketing recommendations. Could you perhaps elaborate on that? I don’t have a marketing or finance background at all, only a legal one, so some of that last sentence went a little over my head. LOL.
As a side note, if any of the analysis provided here was of use to you, perhaps you might find of interest some of my posts on other perfume markets. For example, the Chinese and Japanese ones with their cultural barriers to perfumery (vs. actual beauty products), the massive Brazilian perfume market, the celebrity perfume industry, or the more varied global look at some specific European markets (Germany, the Netherlands, Italy, etc.) mixed in with India’s new emerging perfume market and the Middle Eastern one. Maybe one of those would entail analysis that would be useful to both you and your clients. I think the Chinese/Japanese one entailed some rather eye-opening issues.
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