The Battle of the Fragrance Titans - J'Adore Dior Vs. Chanel No. 5

Back in February during LVMH’s annual shareholder meeting, Bernard Arnault stated that the company aims to make J’Adore the world’s best-selling women’s fragrance. He went on to say how the fragrance has already overtaken its main rival (Chanel No 5) in many markets around the world and has retained its leading position in France. This statement was reaffirmed by Mr Arnault at April’s annual general meeting when he credited the strong performance of Christian Dior fragrances, including J’Adore, as a key growth driver of LVMH’s Cosmetics and Fragrances division.

2013 marked a crucial turning point for both J’Adore and LVMH as J’Adore overtook Chanel No 5 to become the best-selling women’s fragrance in China. Of the top 10 markets in women’s premium fragrances in 2013, J’Adore ranked first in four of them, two more than its main rival, which had a higher ranking in the rest of the top 10 with the exception of South Africa.

Top 10 Countries for Premium Women’s Fragrances

Source: Euromonitor International

J’Adore has performed considerably better than Chanel in emerging premium fragrance markets, including China, South Africa and Brazil, which is currently just outside the top 10. Despite issues with high import taxes, the premium fragrances segment in Brazil is set to grow by a further US$200 million to 2018. China, which has less potency towards fragrance  is set to overtake both Italy and Spain in the rankings by 2018, showcasing the strength of Western influences and branding on Chinese consumers’ purchasing decisions.

In contrast, Chanel No 5’s main advantage is its strength in developed markets, especially the US, Germany and the UK, where J’Adore is significantly behind in the rankings. The sheer size of these markets, with a combined value of US$6 billion, coupled with their consumers’ high per capita spending on fragrances, make them crucial in the battle for the leading position globally. The Chanel brand enjoys much greater awareness and popularity in these markets.

It is thus no coincidence that Christian Dior has been seeking to boost brand awareness and exposure in the UK over the past couple of years. Examples of its strong interest in the UK market include a Christian Dior exhibition in Harrods which took place during Dior’s takeover of Harrods last spring, the opening of a beauty shop in Covent Garden next to its main rival and the revamping of its flagship Bond Steet store, which is expected to take over two years.

In the US, recent promotional activity for the Christian Dior brand includes the addition of dedicated space for the new La Collection Privée Christian Dior in Saks Fifth Avenue, a mother and daughter tea event organised by the retailer and the high-profile Christian Dior Cruise 2015 fashion show in Brooklyn, which promoted the brand’s values. With the US expected to add over US$0.5 billion to the premium fragrances category by 2018, more needs to be done to raise brand awareness in the US. Chanel’s dedicated US beauty website, with videos featuring the well-known make-up artist Lisa Aldridge, and activities throughout the year have enabled Chanel to maintain stronger awareness and a stronger brand image than Christian Dior.

J’Adore also faces in-house competition from Guerlain’s La Petite Robe Noire and the re-launch of Shalimar, which is generating strong revenues in Russia. Furthermore, L’Oréal, with Lancôme’s new La Vie est Belle, is quickly climbing up the rankings in Western markets, including France. While Christian Dior is trying to boost both brand exposure and awareness across the globe, so is its main rival. Chanel has been making inroads in Brazil’s problematic market while maintaining its focus on the US. As much as Mr Arnault wants to see J’Adore at the top, the brand will have to win every battle against its rival, which, even with LVMH’s financial backing, is practically a mission impossible.