NEW DELHI: The fragrance industry is expected to reach Rs 10,000 crore by 2015 at a compounded annual growth rate of over 40 per cent. The industry is at present poised at Rs 3,700 crore, according to a study a study titled Domestic Fragrance Industry: The way ahead released by Assocham.
The Indian fragrance market comprises products including deodorants, perfumes and roll-ons. The local deodorant and roll-on market is currently poised at about Rs 1,800 crore and is growing at about 55 per cent annually, while the perfume market is poised at about Rs 1,500 crore and growing at 30 per cent. The roll-on market is comparatively new and small; it is valued at Rs 400 crore. Only a handful of brands have actually ventured into this market. Though still at a nascent stage, the Indian fragrance industry’s growth is driven by growing awareness among the strong middle class with high disposable incomes. “More and more people are splurging on lifestyle products to look and feel good,” says D S
Rawat, secretary-general of the industry chamber. “And with grooming and personal hygiene fast becoming a part of everybody’s life, the demand for fragrances is likely to spiral upwards,” he adds.
Interestingly, the Assocham study says the demand for new grooming products and accessories is being largely driven by the tier II and tier III cities. Increased demand from these cities has forced the companies to explore and concentrate on these markets. Indeed, several companies are looking at launching a range of affordable products this summer for the new and evolving markets.
The unorganized sector accounts for nearly 30 per cent of the total fragrance industry. Men’s grooming products dominate about 60 per cent of the total market, which is highly fragmented and changes from time to time depending on the season, the study points out. High-end perfumes in the male category are also doing brisk business mainly because a sizeable section of the population prefers imported high-end fragrances.
Armani, Azzaro, Burberry, Chanel, CK1, Dior, Escada, Estee Lauder, Ferrari, Hugo Boss, Lacoste, Nina Ricci, Polo and Shiseido are the highest-sold perfume brands in India. In the deodorant category, Axe, Park Avenue, Nivea, Set Wet, WildStone, Garnier and Yardley lead the pack.
Teenagers form a significant segment of buyers in both male and female categories, and an average teenager at an urban centre spends between `500 and `2,000 only on fragrances—that includes deodorants, roll-ons and perfumes, according to Assocham.
Although the fragrance business is not seasonal and consumers use the products all around the year, almost half of the aggregate sales of deodorants and perfumes occur between March and September.
Coastal cities account for the maximum sales of deodorants across India because of the hot and humid climate there almost throughout the year.