Scent of success: What’s driving the growth of India’s fragrance market

Indian fragrance sector has grown 11% in the last two years fuelled by several factors…

Bengaluru: The Indian fragrance industry is growing at a massive pace. A surge of homegrown niche fragrance brands such as Bombay Perfumery, Ajmal Perfumes, Isak and Roja and the influx of international brands like Victoria’s Secret, Alexandre.J and Rabanne have further enriched the market.

The global fragrance and flavour industry is worth $24 billion and India contributes approximately $500 million, as per a study by the Government of India’s Ministry of Micro, Small & Medium Enterprises (MSMEs)

The study further says, fragrance sector in India has grown at a rate of 11% in the last few years fuelled by factors such as the growing middle class, increasing disposable income, the influence of Western culture, shifting lifestyle preferences of consumers and affordable price of fragrance in the form of mass perfumes and deodorants.

Growth drivers

The rise in the number of Indians stocking a variety of perfumes and deodorants at home is indicative of several underlying trends. India’s tropical climate necessitates the use of deodorants for personal hygiene and comfort, especially during the sweltering months.

However, beyond mere necessity, there’s a cultural shift towards personal grooming and self-expression. In today’s society, smelling good has transcended mere functionality; it has become a style statement.

“India is a territory rich in cultural and social diversity with extremely high potential demand due to the emergence of the middle-class shopping more and more international brands,” said Amelie Jabban, global brand director at Alexandre.J, a French fragrance brand that entered India in February this year.

Consumer spending within the personal care and wellness category has experienced a significant uptick in recent years with the increased health awareness, accessibility of quality products, social media influence and as a method of stress reduction. On a per capita basis, spending on beauty and personal care stands at $14 in the country, according to a report by Redseer Strategy Consultants and Peak XV.

“India’s millennial population, comprising around 34% of the total, is increasingly investing in personal grooming products. They seek products of high social value, making them a crucial consumer segment for international perfume brands,” said Kadambari Lakhani, director of Baccarose Perfumes & Beauty Products, a Mumbai-based perfume retail and distribution house.

In the fiscal year (FY) 2024 Baccarose partnered with global fragrance brands like Alexandre.J, Micallef, and Eternal Journey, facilitating their entry into the country. It currently manages more than 65 beauty and fragrance brands on leading e-commerce platforms.

“The rise of e-commerce has revolutionised retail, providing easier access to a wide range of products, including perfumes. International brands can leverage digital channels to reach a broader audience, particularly tech-savvy millennials who prefer online shopping. By adapting to local tastes and preferences, these brands can capture a significant market share,” added Lakhani.

The resurgence of India’s age-old traditions and a growing preference for natural and organic products have given an uplift to the traditional attar industry in the country.

“Fragrance holds significant cultural importance in India, where it has been used for centuries in rituals, ceremonies, and daily life,” said Nabeel Adam Ali, director of the UAE-born perfume house Swiss Arabian, which recently celebrated its golden jubilee.

“Indie and niche perfume brands are expected to gain traction in the Indian market, appealing to consumers looking for alternatives to mainstream fragrances,” he added.

Home fragrance brand Rosemoore credits the industry’s growth to the influence of advertisements and celebrity endorsements.

“Ads have a vital role in playing with consumers’ minds and creating a zeal to buy more. Also, the government is helping by making rules to make sure Indian perfumes can be sold abroad, which helps the industry grow even more,” said Ridhima Kansal, director of Rosemoore.

Future potential

The fragrances market in India is anticipated to generate a revenue of $316.90 million in 2024, according to data analytics platform Statista. Over the following years, the market segment is projected to experience a steady annual growth rate of 1.49%, reaching an estimated value of $338.20 million by 2028.

From multinational companies to locally grown Indian direct-to-consumer (D2C) brands, players in the fragrance industry are pursuing diverse objectives ultimately aimed at driving revenue and sales growth.

“Looking ahead to the next fiscal year, we anticipate further growth momentum. We aim to capitalise on the positive trajectory established in FY24 by continuing to invest in product development, expanding our distribution channels, and strengthening our brand presence in key markets like India,” said Ali of Swiss Arabian.

In a competitive market like India, where myriad brands pop up daily, investing in marketing is inevitable.

Savour & Aura, a D2C brand specialising in body fragrances and oils, is planning for further expansion in its market share through targeted advertising campaigns, partnerships with influencers and the introduction of new fragrances that resonate with its target audience, as stated by brand director Ritika Singh.

Premium fragrance and personal care retailer The Secret Dew is expecting a substantial 20% increase in revenue and a 30% rise in sales. “Our positive outlook is backed by our dedication to new ideas, focus on customers, and strategic partnerships with renowned corporate events,” said founder Shweta Sharma.

Mysore Deep Perfumery House (MDPH), the Indian FMCG company which owns household brands like Zed Black, Manthan and Orva, for instance, reports a multifold increase in sales in the previous fiscal. It aims to clock a turnover of Rs 1,000 crore by the fiscal year 2027.

“We are seeing consistent jumps and double-digit growth for the last five years and now the company has seen 15% quarter-on-quarter growth in revenue this fiscal as well,” said Ankit Agrawal director of MDPH.

French Essence, the fragrance brand under the umbrella of Delhi-based Vanesa Cosmetics, is anticipating a seven times growth rate in FY24. “With our ongoing dedication to innovation, localisation, and consumer-centric initiatives, we are confident in our ability to capitalise on growing opportunities,” said Nidhi Gupta, chief marketing officer of French Essence.

Did you know

Out of approximately 300 significant natural fragrant raw materials used worldwide, half are cultivated, with 110 of these covering 95% of global consumption. India is renowned globally for 31 of these fragrant raw materials, while there are nearly 21 others that are grown but have not yet reached a level of global significance.

The country has made a global impact with essential oils of menthol mint, sandalwood, jasmine, tuberose and spices.

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