Fragrances in Georgia

PRE-COVID-19 PERFORMANCE

Price-sensitivity evident in fragrances in 2019, leading to slower demand

With ongoing price increases due to currency devaluation and the category’s reliance on imports, demand for fragrances marginally slowed in 2019, a trend more evident within the premium segment compared to mass fragrances. This trend is despite the fact that the main consumer base for premium fragrances is comprised of affluent consumers who generally tend not to be as sensitive to price rises compared to the mass market.

Direct selling and e-commerce continue to gain value share in 2019, offering affordable options to store-based retailers

E-commerce continued to play a more significant role in the distribution of fragrances in Georgia in 2019, gaining further value share from health and beauty specialist retailers and recording double-digit current value growth. Many retailers now offer online sales portals, including some beauty specialist retailers, which is therefore leading to some cannibalisation of their store-based sales.

Puig Rus strengthens leadership of fragrances in 2019 due to wide portfolio of premium and mass brands

Puig Rus strengthened its leadership of fragrances in 2019, as it offers a wide and well-known brand portfolio that offers both premium and mass brands, including Prada, Jean Paul Gaultier, Nina Ricci, Paco Rabanne, Carolina Herrera, the strongly performing United Colors of Benetton in addition to celebrity-endorsed fragrances such as Shakira and Antonio Banderas, which are well promoted through television and outdoor advertising. The company appeals to both men and women with its distinct fragrances.

2020 AND BEYOND

COVID-19 impact

Value sales of fragrances are now expected to decline by 13% in 2020 at constant 2019 prices in light of the impact of COVID-19. This compares to an expected 3% rise forecast for 2020 during research conducted at the end of 2019 before the spread of COVID-19.

Affected products within fragrances

All categories and price segments within fragrances are predicted to record double-digit volume declines in 2020 in due to the home seclusion trend in response to COVID-19. Demand for fragrances was already losing momentum at the end of the review period, due to high prices for global imports, and therefore, with consumers focusing their spending on products deemed more essential including personal care, certain tissue and hygiene products and groceries, they strongly reduced their purchases of this category.

Recovery and opportunities

Following sharp declines in demand in 2020 for all price segments for men’s, women’s and unisex fragrances due to the home seclusion trend and a greater focus by local consumers on purchasing more essential products during the pandemic, the category is predicted to quickly rebound in 2021 in volume terms. Stronger growth is predicted for fragrances, including sets/kits, compared to levels witnessed in 2019 as consumers are encouraged to restock these products, particularly as retailers including direct sellers, are likely to offer attractive promotional discounts to move volume following such a poor year of sales in 2020 due to the pandemic.

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