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MARKET OVERVIEW

1.1 Definition and scope of study

The perfume market refers to the market of fragrant liquid typically made from essential oils extracted from flowers and spices, used to give a pleasant smell to one's body. These are often alcohol based.

Every year around 400 new patented perfumes are put on the global market, which is worth around $11 billion. It seems the world is hungry for inebriating fragrances and Italy is no different, being the fifth world market for these products (Behind USA, France, Germany and UK). In fact, perfumes represent the third highest purchase for the Italian family within the ‘body care’ sector (preceded by face and body treatment products)

Up until the COVID-19 pandemic and the economic context that it unleashed this industry was in full growth in years prior (fluctuating between +2-3.5%year-on-year, +2.3% in 2019). The domestic market increased by 1.9% while the export market grew by almost 3%. Despite prices regularly increasing in perfumeries and mass distribution centres, this market continued to grow, making up around 20% of the Italian cosmetics sector. 2020 was the first year of contraction in the market in over a decade with a drop off of 12.8%, with the internal market contracting by 9.8% and exports decreasing by 16.5%.

The perfume sector is markedly segmented in terms of sales with four major types of sellers:

  • Perfume shops (individual perfumeries, local franchises and brand stores that sell other products but also perfumes) account for 75% of the market share
  • Large retailers (i.e. Sephora) account for 22% of the market
  • Pharmacies account for less than 2% of the market
  • Supermarkets, hypermarkets and other forms of distribution account for less than 1%

Production is unevenly distributed in a geographic sense, with over 50% of manufacturing centres and companies in the northern region of Lombardy, followed by Emilia Romagna with around 10% and Veneto with almost 8%. The north largely predominates the south in terms of manufacturing with 3 southern regions nor even ranked due to low production levels. Italy has 7 yearly free perfume expos which help to diffuse the new fragrances to the greater public.

There has been a digital revolution in the perfume market. The growth of this market up to 2020 was in part driven by the increase in its e-commerce sector (+22% in 2019, double figure growth in 2018 and 2017). Online sales are projected to equal in person sales by 2025. Men make up a mere 38% of the Italian perfume market, with women being the big spenders in terms of value and volume, with a growth of 4.4% in 2019.

The last 3 years show a trend that ‘niche perfumeries’ (individual designers) are increasingly attractive to Italian consumers (12.5% of the sector in 2018). Italian have made a shift towards buying house and toilet fragrances in the past few years (4% of the market share).

With the economic downturn of the pandemic the perfume industry in Italy saw a boost during the festive period as perfumes tend to be popular and easy gifts. This was taken as a positive signal by industry insiders for a possible comeback in 2021

DEMAND ANALYSIS

MARKET STRUCTURE

ANALYSIS OF THE OFFER

REGULATION

POSITIONING OF THE PLAYERS

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Analysts

Hugo S.

chargé d'études économiques, Xerfi

Hugo S.

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Mathieu Luinaud

Associate Consultant

Mathieu Luinaud

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Education Formation
Robin C.

PhD Industrial transformations

Robin C.

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Pierre D.

Analyst

Pierre D.

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Ross Alumni Club France

Arnaud W.

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Pierrick C.

Consultant

Pierrick C.

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Maelle V.

Project Finance Analyst, Consulting

Maelle V.

Héloise Fruchard

Etudiante en Double-Diplôme Ingénieur-Manager Centrale

Héloise Fruchard

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Imane E.

EDHEC

Imane E.

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Vincent D.

Auditeur

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Eva-Garance T.

Eva-Garance T.

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Michela G.

Market Research Analyst

Michela G.

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Azelie P.

Market Research Analyst @Businesscoot

Azelie P.

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Cantiane G.

Market Research Analyst @Businesscoot

Cantiane G.

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Jules D.

Consultant

Jules D.

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Alexia V.

Alexia V.

Emil Ohlsson

Emil Ohlsson

Anna O.

Anna O.

Gabriel S.

Gabriel S.