The perfume and fragrance market - Brazil

1.1 Market presentation

Perfume is a cosmetic product made up of essential oils and alcohol, which can take different forms, such as eau de parfum and eau de toilette, depending on the concentration of alcohol and the manufacturing process. Essential oils themselves, however, are excluded from the scope of this study.

The perfume market includes all personal care products intended to be applied to a person in order to voluntarily impregnate them with a pleasant smell and therefore includes eau de toilette, eau de parfum and eau de Cologne. Perfumeries are where these products are distributed and can take many different forms, from supermarkets to perfumers' workshops.

The global perfume market is worth around 45 billion dollars and has been growing steadily for several years, a trend that is set to continue in the future. This momentum is being driven by the positive performance of the luxury sector and, in particular, global companies such as Chanel, Dior and L'Oréal, and by the growing number of fragrance references, which offer products suitable for all markets and consumers.

According to the Brazilian Association of the Personal Hygiene, Perfumery and Cosmetics Industry (ABIHPEC), the Brazilian perfume and cosmetics market has seen significant growth in recent years.In 2022, the sector generated approximately R$18 billion for the beauty and personal care products industry in the country. This growth is attributed to several factors, including the demand for products that represent the consumer's personality and style, the impact of social media in promoting trends and the growing awareness of the importance of self-care.

Several recent trends are affecting demand: the development of niche fragrances, original products that are more premium than mass-market fragrances, the emergence of fragrance customization solutions and, as in many sectors, the proliferation of organic and responsible approaches.

The COVID-19 crisis has accelerated the transformation of the sector, especially in distribution, a key link in the perfume value chain. With the closure of physical points of sale, the main perfumers have had to compensateby developing their digital points of sale, especially websites specializing in e-commerce. Faced with this trend, physical retailers need to innovate and communicate in order to continue attracting customers to their points of sale. The retailers best placed to resist this trend are the large, solid chains, which are forcing independent retailers to join a group or risk disappearing.