Fragrances in Latvia

PRE-COVID-19 PERFORMANCE

Strong value growth despite maturity of demand as sales shift to premium brands

At the end of the review period, demand for mass fragrances remained very mature, with demand for premium fragrances also relatively saturated after many years of strong growth. However, strong value growth was still recorded across fragrances during the year due to the trend towards premium brands.

Mass fragrances have an image problem as more consumers seek premium quality

Mass fragrances continued to register lower sales and slower growth than premium fragrances during 2019. In addition to wide distribution via direct selling, low-cost mass fragrances brands are usually sold in supermarkets, hypermarkets and parapharmacies/drugstores and although there are numerous strong brands present in the category, these products are struggling to retain the trust and loyalty of consumers.

Premium brands continue to dominate sales of fragrances

2019 saw sales of fragrances in Latvia heavily dominated by premium brands. The leading companies behind these premium fragrance brands include Coty, L’Oréal and LVMH Moët Hennessy Louis Vuitton.

2020 AND BEYOND

COVID-19 impact

Sales of fragrances are now expected to decline by 16% in 2020 in 2019 constant value terms in light of the impact of COVID-19. This represents a major change from the expected 2% rise forecast for 2020 during research conducted at the end of 2019 before the spread of COVID-19.

Affected products within fragrances

Although all categories of fragrances are expected to have experienced declining sales due to COVID-19, mass fragrances is likely to have experienced a stronger decline in demand. This is because demand for mass preferences was already under considerable pressure prior to the onset of COVID-19, with consumers increasingly preferring premium fragrances due to the higher quality and greater prestige that these products represent.

Recovery and opportunities

With sales of mass fragrances already under considerable pressure towards the end of the review period prior to the COVID-19 situation emerging, the category is not expected to recover from the slump that is expected to have been seen in sales over the course of 2020 before the end of the forecast period. This has serious indications for the category’s leading direct selling players Oriflame and Avon, which are likely to bear the brunt of any reluctance on the part of consumers to purchase mass fragrances.

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