Fragrances in Portugal

PRE-COVID-19 PERFORMANCE

Premium fragrance start to show first signs of recovery in 2019 after a long period of economic crisis

2019 saw the first signs of recovery in premium perfumes following the deep economic crisis of the 2010s. While mass fragrances started to show good growth from 2016, premium fragrances had lagged behind as consumers remained unwilling to pay a higher price and instead opted for mass market replicas of premium brands such as Equivalenza or Caravan.

Online sales blossom for premium brands, while grocery makes strides in mass brands

Online sales were a fast growth area in 2019, particularly for premium brands due to the higher degree of brand loyalty at this end of the market, which precludes the need for testing in store. Beauty specialists invested in this channel through exclusive online promotions, especially around holiday seasons.

Consolidation among big name players increases as Nedphyl withdraws from the market

Leading player Puig and second ranked L’Oréal both increased their share in 2019 as the sector became more consolidated. Both players have a wide portfolio of established premium brands that are widely advertised.

2020 AND BEYOND

COVID-19 impact

COVID-19 has had a clear impact on fragrance sales. Sales are now forecast to fall by 2% in 2020 in 2019 constant value terms in light of the impact of the pandemic.

Affected products within fragrances

The impact of COVID-19 is most evident in mass fragrances, where sales are expected to fall by 3% compared to a 2% fall in premium fragrances. Premium fragrances are commonly purchased online, while mass fragrances are more typically purchased on impulse at beauty specialist stores and mass grocery/pharmacies.

Recovery and opportunities

Fragrances will return to positive growth in most categories by 2022, but sales are not expected to return to the fast growth seen in 2019 during the forecast period. Growth will remain muted throughout the forecast period, with an overall forecast CAGR of less than 1% in constant 2019 value terms.

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