11 April 2018
Sweet Smell of Success Wafts in from India's Surging Fragrance Market
With 10% per annum growth over the past five years, profits are not hard to sniff out in the Indian scent sector.
Over recent years, few things have smelled sweeter than India's fragrance market. Over the period 2010-15, the sector grew by about 10% per annum, with expansion expected to continue at a similar rate until at least 2020. At present, this puts the overall annual value of the Indian perfume market at some US$307 million, a figure that is expected to rise to $460 million within three years.
While the majority of scent sales have been conducted via conventional retailers, the country's nascent online sector has also played its part, with its contribution expected to accelerate over the near term. In 2015, Indian consumers bought $22.7 million worth of perfumes and scents online, with this figure expected to exceed $53 million by 2020 as online shopping and fragrance purchases both become more commonplace.
Overall, the expansion of the sector has been attributed to two factors. Firstly, consumer spending on beauty and wellness products has risen in line with changing societal attitudes towards grooming and personal presentation. Hand in hand with this has been a sudden surge in the number and variety of fragrances available, a consequence of both increasing imports and a rising domestic production base. Despite this heightened level of choice, however, floral fragrances remain the most popular and still dominate across the majority of scent platforms, including perfumes, colognes and domestic air-fresheners.
One other phenomenon that has helped to sustain the growth of the sector is India's perennially hot and humid climate. This has led to many newly body-conscious professionals actively seeking to ensure they remain fragrant and easy-on-the-nose throughout the whole working day, regardless of their immediate environment and the prevailing weather conditions.
This new body-consciousness is, at least in part, derived from a constant drip-feed of advertising on the part of perfume brand owners that has sought to instil a horror of natural odours among white-collar workers. In addition, many Indian businesses have also sought to engender conspicuous hygiene practices among staff as a way of creating an image of an international standard of professionalism.
Despite the changes to the sector, India's fragrance market remains sharply divided between perfumes / colognes and deodorants, with each sector having its keen adherents. Overall, the deodorant sector still accounts for the largest proportion of the market, with perfumes / colognes still far behind in terms of comparative share.
Even as the perfume market expands, the gap between the two sectors may remain constant or even widen, with the deodorant market expected to grow by 15% a year until 2022. It is also expected that aerosol deodorants will continue to be the most in demand.
Despite the clear loyalty of the deodorant brigade, perfume and after-shave brands should not be deterred. At present, it is estimated that only 4% of India's 1.35 billion strong population has ever used a commercially-produced scent product. The potential, then, is clearly immense.
Mitra Dave, Mumbai Consultant