Fragrances in Latvia

PROSPECTS

Premium brands remain prominent among the leading names in fragrances

Premium brands continue to dominate sales of fragrances, the only category in beauty and personal care in Latvia in which sales are not heavily dominated by mas brands. The main reason for this is that fragrances are seen as inherently luxurious and indulgent products and it is also common that people only use these products for special occasions.

Increasing competition between the retailers of fragrances means lower unit prices

Beauty specialist retailers and department stores continue to dominate sales of fragrances in Latvia and this is associated with the prestige and cachet that high-end retailers in these channels carry, which lends itself to the purchase of a premium fragrance brand. However, these channels are facing competition from mass merchandisers, direct selling and, increasingly, internet retailing, all of which offer much better value for money on purchases of fragrances.

Premium brands to continue leading the category

With premium brands set to benefit from the ongoing stability and growth in the Latvian economy and higher consumer spending on both fragrances and premium beauty and personal care brands, the dominant position of premium brands can be expected to improve over the forecast period. Mass fragrance brands increasingly cater to very low-income people and teenagers and young adults, consumers who are less sophisticated in their tastes and far less likely to be able to afford premium fragrances brands on a regular basis.

COMPETITIVE LANDSCAPE

Premium brands lead the way in terms of marketing promotions

With the cutting edge of competition in fragrance involving premium brands, advertising is common in the category. This includes both media advertising campaigns, price promotions and in-store activities and these are most commonly applied to new product launches.

Consumer preference for well-known premium brands present barriers to entry

Consumers tend to prefer well-known and prestigious brands when it comes to fragrances and this presents something of an obstacle for newcomers, especially those that seek to make their mark in the premium segment. However, it is not uncommon for new brands to be seen in the mass segment as branding and prestige are much less important factors in mass fragrances.

No major changes expected in the competitive environment in fragrances

The forecast period is likely to see a continuation of the major trends that defined the category during the review period. These include the further shift towards premium products, the increasing interest in niche brands that offer genuine points of difference and scents that are unique and intriguing, the shift towards larger pack sizes that offer better value for money through lower unit prices, the constant appearance of new products in an increasingly crowded brand environment of current trends, higher interest in products with higher concentrations of perfume and the shift towards internet retailing as a source of fragrances, a trend which is likely to hit direct selling the hardest.

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