Fragrance industry to cross Rs.10K cr by 2015: Study

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SME Times News Bureau | 22 May, 2012
The Indian fragrance industry is likely to reach Rs 10,000 crore by 2015, industry body the Associated Chambers of Commerce and Industry of India (ASSOCHAM) said recently.

Growing at a compounded annual growth rate (CAGR) of over 40 per cent, the fragrance industry, which is currently poised at about Rs 3,700 crore, has the potential to reach Rs 10,000 crore by 2015, according to a study conducted by ASSOCHAM.

“Rising demand for fragrances from tier II and III markets is the real growth driver of this industry as a result companies are gradually shifting their focus from metros and exploring other markets and gearing to launch a range of affordable deodorants, perfumes and colognes during summers,” said the study.

The fragrance industry consisting of deodorants, perfumes and roll-ons.

Indian 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 growing at about 30 per cent and is currently poised at about Rs 1,500 crore. The roll on market’s current size is a meager Rs 400 crore as only a handful of brands are operating in this domain, highlights the study.

Releasing the study, ASSOCHAM secretary general D.S. Rawat said, "Fragrance industry in India is still at nascent stage but its rising demand is largely driven by growing awareness and preferences amid strong Indian middle class with high disposable incomes as they do not shy away from splurging on lifestyle products to look and feel good."

Unorganised sector accounts for nearly 30 per cent of the total fragrance industry.

Nearly 60 per cent of the whole fragrance market is dominated by the men's category which is also highly fragmented and keeps evolving with change in attitudes and lifestyle. Besides, high-end perfumes in the male category are also doing a brisk business courtesy the growing urge among urbane Indian males to stay well-groomed.

Though there are limited options for women but the segment is likely to see an upsurge with various existing brands and new entrants resorting to sustained media campaigns to cash in on the untapped category with enormous growth potential.

Teenagers are a significant segment in both male and female categories as an average teenager at an urban centre tends to spend anywhere between Rs 500 and Rs 2,000 only on fragrance including – deodorants, roll-ons and perfumes.

Although, the fragrance business is not seasonal and consumers use it across the year but almost half of the aggregate sales of deodorants and perfumes occur between March and September as people splurge more to counter sweat causing body odour and remain fresh, said the study.

Armani, Azzaro, Burberry, Chanel, CK 1, Dior, Escada, Estee Lauder, Ferrari, Hugo Boss, Lacoste, Nina Ricci Polo, Shiseido, etc. are certain most sold leading perfume brands in India. Amid the deodorant category Axe, Park Avenue, Nivea, Set Wet, Wild Stone, Garnier, Yardley, etc. are leading.