Fragrances in South Africa

PROSPECTS

Challenging economic environment influences performance of fragrances

Fragrances experienced lower value growth in 2017 compared to previous years of the review period. The challenging economic environment characterised by high unemployment, rising prices, more restrictive access to credit, and declining disposable incomes contributed to this.

New product launches and marketing strategies contribute to brand success

The success of premium brands hinges on new product development and marketing strategies such as in-store signage and the use of fragrance spritzers to further promote the brands to consumers. Some popular launches in 2017 included Gucci Bloom, Twilly, Si Passione and Gabrielle and were heavily advertised.

Emergence of new purchasing patterns

Although local consumers are becoming increasingly value driven, either purchasing when their favourite brands are on discount or purchasing smaller bottles, millennials are driving the personal grooming trend and moving away from having a single signature scent to purchasing multiple scents that will suit different moods and to be worn on different occasions.

COMPETITIVE LANDSCAPE

Highly fragmented and competitive environment prevails

Both premium and mass fragrances are highly fragmented and characterised by the easy entry and exit of brands. The category is dominated by international players, although local players are trying to enter.

The Prestige Cosmetics Group leads fragrances

The acquisition of new brands after the merger between Coty and Procter & Gamble at a global level, resulted in The Prestige Cosmetics Group becoming the national licensed distributor, which contributed to increasing its share. International brands are strongly preferred by local consumers as they are perceived to be of higher quality and are seen as a status symbol among aspirational South Africans.

Parallel imports and counterfeit products

One of the problems faced by licensed distributors is the existence of parallel imports where unlicensed distributors sell the same brands for much less. Apart from the existence of parallel imports, there is a growing market of “generic” fragrances, made even more profitable by the current economic situation.

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