What are the opportunities of the Indonesian Fragrance Industry? What are its prospects?

Keywords: Fragrance, Perfume, Scent, Beauty Products

Source: Groupon

Fragrances are unique artistic creations by perfume specialists, scientists, chemists, and marketers in the industry. They are designed with great care to make people’s lives enjoyable and smell good, in general! Globally, the fragrance industry is currently experiencing a decline due to the COVID-19 pandemic, this was proven by the fact that the sales of the European fine fragrance dropped by more than 18% to USD 14.1 million, compared to the 2019 figures. Despite the decline, this industry still shows promise especially with the fact that it is expected to grow at a compound annual growth rate of 4% between 2021 and 2026.

With that issue in hand, what are the opportunities of the fragrance industry? What are its prospects? How are they going to survive amid the pandemic? Read more to find out!

Overview of the Indonesian Fragrance Industry

In 2020, the revenue of the fragrance market in Indonesia stood at USD 394 million. The Statista Consumer Market Outlook estimates that this revenue will reach nearly 500 million dollars by 2025. The fragrances market in Indonesia is forecasted to have growth at a compound annual growth rate of 3.6% and is driven by the rise in disposable income and a young population base. 

The most largest and popular category in value and volume terms is the female fragrances category, in which it is forecasted to register the fastest growth in the upcoming years. Research also states that mass fragrances are more popular than Premium Fragrances in all three Fragrance categories. In addition, department stores are seen as the leading distribution channel for fragrance products, followed by Health and Beauty stores.

An Indonesian local brand, HMNS, was able to send its products to the 2022 Paris Fashion Week. This would make them the first Indonesian fragrance brand to make an international debut. For their international presence, they would be selling their perfumes for IDR 2.5 million, and for local customers, they would be selling their products at IDR 495 thousand. The HMNS team stated that this was possible because the Paris Fashion Week team approved of their perfume submission, alongside consistency and passion. 

International Brands Who Have Successfully Penetrated the Indonesian Market

The international players who are currently leading the Indonesian fragrance market are

1. L’Oreal – L’Oreal is a French personal care company that was able to outperform the fragrance market despite the uncertain times. By the end of June 2021, there was a very strong increase and returned to its pre-Covid growth rate by about 6.6%. They were also able to record market share gains in all divisions and all geographic zones. With that, their geographic zones have now been redefined around more homogenous consumption areas. 
2. Calvin Klein – Calvin Klein is an American fashion house company established in 1968, which not only focuses on clothing, but also accessories, home furnishings, perfumery, jewelry, and more. In 2019, the PVH’s revenue from Calvin Klein brands amounted to about USD 3.67 billion. 
3. Oriflame – Oriflame is a Swedish-Swiss multinational multi-level marketing company that sells beauty and personal care products. By 2020, the company was able to garner EUR 1.2 billion and will continue to grow in the future. 

Future Prospects of the Fragrance Industry

In the future, the fragrances and perfumes market is projected to register a CAGR of 5.5% during the forecast period of 2021-2026. Though it is impacted by the COVID-19 pandemic, trends which were already shaping the market are more likely to get accelerated by the rise of the global middle-class population and the use of e-commerce. The growth of the fragrances and perfumes market is primarily influenced by unpredictable and changing fashion trends, therefore, the key market players are focusing on developing exciting and new fragrances to attract different consumer groups across the world.

Enter the Indonesian Fragrance Industry with BRIGHT Indonesia

With the constant shift of consumer behavior and demands, it would need a lot of in-depth research about the Indonesian fragrance industry. Therefore, to enter the Indonesian market, you would need the right local partner to assist you. 

BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

1. Assist you in expanding and developing your business by identification of potential partners.
2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arranging business meetings, and acting as a liaison.

3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email info@brightindonesia.net.