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MARKET OVERVIEW

1.1 Definition and scope of the study

Perfume is a cosmetic article composed of essential oils and alcohol which can be declined in different forms, such as the perfumes and toilet waters depending on the alcohol concentration and the manufacturing process. Essential oils per se are, however, excluded from the scope of this study

The perfume market includes all the toiletries intended to be applied to a person in order to voluntarily impregnate him/her with a pleasant scent and therefore includes eaux de toilette, eaux de parfum and eaux de Cologne. Are perfumeries the places of distribution of these products and can take many different forms, from the food department store to the perfumer's workshop

The world perfume market is worth approximately 45 billion dollars and presents a continuous increase for several years, a rise that is expected to continue in the future. This dynamic is driven on the one hand by the positive performance of the luxury sector, and in particular global companies such as Chanel, Dior or L'Oréal, and on the other hand by the multiplication of the number of perfume references, thus offering products adapted to all markets and all consumers.

In France, the market has recently started to rise again after several years of declining sales. This new impetus is the result of the increase in consumption and the product upscaling preferred by French customers.

 

In this market, the driving force behind consumption has historically been and remains western Europe which has the highest concentration of consumers even though the United States remain the largest market in absolute terms.

Several recent trends are affecting the request the development of niche fragrances, original products and more "premium" than mass-market perfumes, the appearance of customization solutions of fragrances and, as in many sectors, the increase in the number of organic and responsible approaches.

On the side of the production the market is very concentrated since a dozen companies, including several French ones, account for about half of the world's production. The France is by far the leading European producer of perfumes and toiletries before Germany and Italy, testimony of a production is still often located in countries known for their know-how in the luxury industry.

The distribution a key link in the perfumery value chain, is changing, notably with the growing impact of digital, the growth of specialized e-commerce sites is evidenced by the growth of specialized e-commerce sites. Faced with this trend, the physical distributors must innovate and communicate to continue to attract customers to their points of sale. Those most likely to resist this trend are the large and strong networks, which is why independent retailers have to join a group if they don't want to disappear.

 

1.2 A rapidly growing world market still marked by geographical specificities

Fragrances are part of the cosmetics business which has been a steadily growing market since ****, with growth of *.*% in **** and a CAGR of *.**% over the period. [***]
Fragrances account for **% of this buoyant market, and the sector's worldwide sales were $**.** billion in ****. After declining in **** and ****, the market has picked up again, ...

1.3 The French domestic market, leader in a slight slowdown

In **** the French perfume market accounted for approximately *.* billion euros . The market has nevertheless been slowing down for several years, with a decline of -*% in value between **** and ****. [***]
Nevertheless, the forecast data provided by Euromonitor predict a recovery as early as **** and sustained growth until ****, reaching approximately $*.** billion. The market ...

1.4 Foreign trade: Asia is the main supplier

France posts a large surplus in the trade balance in the fragrance sector: its coverage rate stood at ****% in ****, with exports carefully *.* billion euros ***.* million in imports. [***]
After a drop of -**% between **** and ****, French exports in value terms have started to rise again, with growth of -**% between **** and **** **% between ...

DEMAND ANALYSIS

2.1 The French and perfume

Growing emphasis on appearance
In ****, French spending on appearance amounted to *,*** euros per household, or more than ** billion nationwide, including more than ** billion on beauty care
In this budget, spending on clothing is losing importance, in favor of spending on beauty care (***), whose share of the budget has increased from *% in ...

2.2 Predominance of the premium segment

The perfume market in France is mainly dominated by premium perfumes *.* billion, which in **** represented **% of sales with Paradoxically, perfumes for the mass market accounted for only **% of sales
Unsurprisingly, women account for the majority of sales in the sector. On the other hand, the share of the premium is equivalent ...

2.3 The rise of organic and natural

The perfume market is no exception to the rule broader naturalization trend in the cosmetics industry.
In ****, **% of French women used organic or natural fragrances, and **% had used them at least once. In total, **% of French women used or had used this type of product in ****

Source: ****

2.4 The impact of tourism on perfume sales in France

The impact of tourism on perfume sales in France is of course concentrated in Paris s, including sales in the airports and the haussman Boulevard department stores It is a full-fledged destination in the tours offered to tourists
Thus, in ****, the decline in tourist numbers of -*.* million people resulted in ...

2.5 Seasonal demand

Fragrances are perceived as a luxury product, and as such a large proportion of the fragrances sold are then offered. For example, in ****, **% of French people planned to offer a perfume for Christmas and **% of French people wanted to receive a perfume for Christmas. [***]

Source: ****

Source: ****
The graph above represents the ...

MARKET STRUCTURE

3.1 Overview of the value chain

A synthesis of the steps in the value chain is proposed:

3.2 Cultivation of perfume plants

Fragrant flowers are part of a category of plants called the PPAM (***). The grasse region is one of the main producing regions for perfume flowers in France, with very characteristic flowers such as the Pink Centifolia The Jasmine Grandifolium and the Tuberose . [***]
The cultivation of PPAM in France covered more than ...

3.3 The stages of perfume manufacturing

Once the raw materials have been produced, the perfume is then manufactured in * steps (***)
The perfumer mixture of different essences (***) to create what is called a scented base; This scented base is diluted in alcohol Depending on the concentration chosen for the type of article (***). Distilled water is also added; This ...

3.4 Distribution largely dominated by perfumeries and department stores

Perfumeries and department stores
Selective perfumeries represent the the bulk of perfume sales in France and conversely, the perfume represents more than **% of the **** points of sale in France of the selective circuit. [***]
**% of the value of the selective circuit was created via large national chains (***) accounted for *.*% of the selective ...

3.5 A highly fragmented market

The Herfindahl-Hirschmann Index calculated for this perfume sector in France is *** points . It is obtained by adding the square of the market shares (***) of all companies in the sector concerned. It thus provides a relevant indicator of market concentration according to the following scale :

We can deduce that the perfume market ...

ANALYSIS OF THE OFFER

4.1 French people's favourite brands

The most used brands among French women are the classic and historic Dior and Chanel brands (***).

Source: ****

Source: ****

4.2 The different types of perfumery articles

There are different types of articles and different designations depending on the alcohol concentration obtained during manufacture (***)
Flavour: alcohol concentration between **% and **% Eau de parfum: concentration between **% and **% The eau de toilette: concentration < **%. Eau de Cologne: concentration < *%.
This alcohol concentration determines the quality of the finished product, and consequently its price ...

4.3 Perfume composition

A perfume can be broken down and analyzed according to what is called the "olfactory pyramid" with three levels. [***]
Top Notes These are the smells you smell right after spraying the perfume, but also the ones that fade the fastest. They are often the freshest and greenest notes, like bergamot or ...

4.4 The rise in perfume prices

Perfume prices have been rising steadily for several years now . Consumer price index data provided by the INSEE for perfumes and eaux de toilette thus show that the index reached *** in **** (***). This indicates that the purchase price of perfumes and eaux de toilette grew by **% in ** years .
One of the main ...

4.5 Alternative perfumery in response to market standardization

For several years now, the trend in the French perfume market has been to the accumulation of launches . Indeed, brands tend to rely on their best-selling fragrances, by declining an already existing perfume ad infinitum with minimal variations, with the aim of make the most of the success of these products, ...

REGULATION

5.1 The Cosmetic Regulation n°1223/2009

The Regulations n°****/**** says Cosmetic Regulations is one of the main regulatory texts at European level for the cosmetics market
Designation of a responsible person
For each product placed on the market, undertakings must designate a Responsible Person (***). The Responsible Person can be the manufacturer, the importer if the manufacturer is ...

5.2 The IFRA Code

IFRA is the International Fragrance Association (***).
It is mandatory for all IFRA companies to comply with the standards set out in the text. Thus, the fragrance manufacturer can provide a iFRA certificate on its production to ensure that its products comply with the rules laid down in the IFRA Code.

POSITIONING OF THE PLAYERS

6. Segmentation of players

The following segmentation of the actors is retained:

  • Givaudan
  • V. MANE Fils
  • CENTRI DI BELLEZZA YVES ROCHER ITALIA Y.R.A.M. S.R.L.
  • L'Occitane
  • Sephora
  • Marionnaud
  • Dior
  • Chanel
  • Jo Malone
  • L'artisan Parfumeur

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chargé d'études économiques, Xerfi

Hugo Schott

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Mathieu Luinaud

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PhD Industrial transformations

Robin Charbonnier

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Pierre Doussau

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Arnaud Walter

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Amaury de Balincourt

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Pierrick Cudonnec

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Maelle Vitry

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Héloise Fruchard

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Imane Essadiq

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Vincent Defrenet

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Eva-Garance Tison

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Jules Decour

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Alexia Vacheron

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Emil Ohlsson

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Anna Oeser

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Gabriel Salvitti

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