Fragrances in Estonia

PRE-COVID-19 PERFORMANCE

Premiumisation drives overall growth in 2019

Fragrances saw strong and stable growth in Estonia in 2019, with improved purchasing power enabling increased numbers of consumers to opt for premium varieties over mass. The premiumisation trend drove overall growth as consumers continued to shift from mass to premium, seeking out high quality scents and the prestige associated with the names of world-renowned fashion houses.

E-Commerce continues to grow as consumer trust increases in 2019

E-Commerce and beauty specialist retailers held the highest shares in fragrances in 2019, with the former growing at significantly higher rate than the latter. Consumers continue to be drawn to the convenience of e-commerce, and the ability to compare prices and select the best option, particularly when it comes to costly premium-positioned fragrances, quickly and easily.

Coty leads with top-ranking Hugo Boss brand in 2019

Coty Inc maintained a strong lead of fragrances overall in 2019, as well as leading premium men’s and premium women’s fragrances, premium unisex fragrances and premium fragrances sets/kits, mass men’s fragrances and dominating mass unisex fragrances. Direct selling company Avon Eesti AS led mass women’s fragrances and dominated mass fragrances sets/kits.

2020 AND BEYOND

COVID-19 impact

Sales of fragrances are now expected to fall by 17% in 2020 in 2019 constant value terms in light of the impact of COVID-19. This compares to an expected 1% rise forecast for 2020 during research conducted at the end of 2019 before the spread of COVID-19.

Affected products within fragrances

All product areas within fragrances are seeing steep, double-digit declines in both constant and current value terms, with premium fragrances seeing slightly slower decline than mass fragrances. As restrictions are lifted and cafes, bars and restaurants begin to reopen, consumers will return to purchasing fragrances, with a short-term spike in sales throughout the category expected during 2020-2021.

Recovery and opportunities

Fragrances’ initial rebound at the beginning of the forecast period will be followed by a significant slowdown in growth and will fail to offset the damage caused by COVID-19 by the end of the forecast period. The pandemic is expected to have a significant effect on Estonia’s economy, with rising levels of unemployment and falling levels of disposable income prompting conservative purchasing behaviour and will move fragrances further down consumers’ lists of priorities.

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