Fragrances in Israel

PROSPECTS

Fragrances records a decline in current value terms in 2017 due to a change in pricing policy

At the beginning of 2017, leading health and beauty specialist retailer chain Super-Pharm and other beauty specialist retailers made a dramatic change in their pricing policy. Previously offering fragrances at frequent, deep discounts, they now priced fragrances lower on a regular basis.

Parallel imports and online retailing increase competition

Fragrances are also affected by growing parallel imports, which are most prevalent within internet retailing. Although parallel imports are irregular and often difficult to achieve, several retailers still prefer to offer these products as they can price them very competitively in comparison to official importers.

More travel affects sales

Personal imports are also driving growth of online sales. Consumers are travelling overseas more often as flight prices decline and Israelis are increasingly exposed to lower prices in other countries; therefore, they purchase fragrances overseas or seek low prices on online international retailers' websites.

COMPETITIVE LANDSCAPE

Lilit Cosmetics leads thanks to its large portfolio

Lilit Cosmetics continued to lead fragrances in 2017 with a product portfolio that was significantly larger than its competitors and available in all leading beauty and personal care retailers, including Super-Pharm, New Pharm, Hamashbir and April. The company frequently launches new fragrances accompanied by extensive marketing campaigns, expanding its brands' series, and employing sales consultants at most sales points.

Lilit Cosmetics strengthens its position

Due to Lilit Cosmetics’ large brand portfolio, it is expected to maintain its lead of fragrances throughout the forecast period. In fact, in 2017, the company even acquired 50% of Golden Elements, the local distributor of Jivago fragrances, allowing Lilit Cosmetics to expand further through new brands and products.

Online retailing challenges traditional retailers

As mentioned above, online retailing is growing fast, driven by the lower prices of parallel imports as well as personal imports from international websites. Online sales of fragrances are also growing thanks to the overall rise in internet retailing, as growing numbers of consumers make online transactions every year, and they therefore feel increasingly comfortable making a larger proportion of their purchases online.

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