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Fragrances - Malaysia

Euromonitor International : Category Briefing May 2011

Fragrances

Malaysia

List of Contents and Tables


Headlines ................................................................................................................................................................. 1 Trends ...................................................................................................................................................................... 1 Competitive Landscape .......................................................................................................................................... 2 Prospects .................................................................................................................................................................. 3 Category Data ......................................................................................................................................................... 3 Table 1 Sales of Fragrances by Category: Value 2005-2010 .......................................................... 3 Table 2 Sales of Fragrances by Category: % Value Growth 2005-2010 ........................................ 3 Table 3 Fragrances Company Shares 2006-2010 ........................................................................... 4 Table 4 Fragrances Brand Shares by GBN 2007-2010 ................................................................... 4 Table 5 Men's Premium Fragrances Brand Shares by GBN 2007-2010 ......................................... 5 Table 6 Women's Premium Fragrances Brand Shares by GBN 2007-2010 .................................... 5 Table 7 Forecast Sales of Fragrances by Category: Value 2010-2015 ........................................... 6 Table 8 Forecast Sales of Fragrances by Category: % Value Growth 2010-2015 .......................... 6

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FRAGRANCES IN MALAYSIA
HEADLINES
Fragrances enjoyed current value growth of 5% in 2010 to reach RM314 million The trend towards cheaper options has contributed to a rise in masstige fragrances Mass fragrances report the stronger growth in 2010 with a 7% increase in value sales Average unit price increases minimally in 2010 Avon Cosmetics (M) Sdn Bhd continues to lead facing strong mass competition Over the forecast period, fragrances is expected to post a constant value CAGR of 3%

TRENDS
Both mass and premium fragrances witnessed new launches that contributed to better sales performance in 2010. Masstige in particular grew more popular as consumers desired a perfume that was not masspositioned and offered a somewhat sophisticated aroma, given that prestige brands were largely unaffordable. Masstige brands such as Esprit and Pierre Cardin slowly gained an advantage as they are more affordable and perceived as not as ordinary as mass brands. For example, Esprit Connect EDT sold in Watsons health and beauty specialist retail outlets at RM139 was offered with a free Esprit Deodorant Spray worth RM39. Fragrances registered higher value growth in 2010 compared to 2009. With economic recovery under way, new product launches and product extensions contributed to better sales in 2010. Ralph Lauren with its latest collection The Big Pony represents four key passions and fragrances of young men, with Adventure, Seduction, Sport and Style. The desire to smell fragrant and emphasise female beauty underpinned sales of womens fragrances. Many mass womens fragrances brands targeted women from young teens to adults, which enabled it to lead growth among fragrances. In addition to mass fragrances being affordable to women of all ages and offering a wide range of products, growing demand for masstige brands also added to growing sales in mass womens fragrances. The latest Nutox Eau de Perfume named Mood Magic comes with Bliss, Crave, Chill and Poise, which are designed to evoke certain moods or feelings. As part of the launch activities, the fragrance was promoted at Watsons with consumers entitled to Mood Magic Hand Therapy lotion worth RM5.90/30ml with every fragrance purchase of RM39.90/50ml. Along with mass womens fragrances, mass fragrances also saw growing interest among men. Yves Rocher offered a new range for men called vidence Homme. In addition to rising costs such as fuel and import costs, a general price increase among premium fragrances raised the average unit price of fragrances in 2010. However, the higher unit price was offset slightly by consumers who opted for more mass and masstige brands as alternatives. Mass fragrances including masstige brands were appealing to wider group of local consumers due to their affordability. Avon, which is strong in this area with an extensive distribution network and many mass fragrance brands in its portfolio, posted rising sales. There are countless brands in mass fragrances which is one factor contributing to consumers inclination towards mass fragrances. However, premium brands also made their presence felt in 2010. The niche target group of affluent, high-income, fashion- and statusconscious consumers did not reduced its spending on premium fragrances. This was partly illustrated by many new launches and more premium counter brands activities and promotions. Malaysians were not short of choice in fragrances in 2010 with flourishing new product developments in different areas. In terms of product extensions, Acqua di Goia was created in connection with its successful Acqua di Gi, and launched in the second half of 2010. Trsor achieved success when it was launched two decades earlier, and 2010 saw the relaunch of this classic with an updated version: Trsor in Love. Lancmes perfumers reformulated the original blend and created Trsor in Love which heightens Trsors

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classic signature with a fruitier scent. Paco Rabannes One Million mens fragrance extended its success to include a female counterpart with the launch of Lady Million. In terms of more novel, fun-orientated scents, 212 VIP Carolina Herrera was launched identifying its target consumers as real VIPs, people with flair, style and a sense of humour and who want to have a good time. The fragrance offers three notes Fun, Socialite and Stylish, in dazzling gold and bullet-shaped bottles. The trend towards celebrity fragrances shows no sign of waning as many stars continue to attach their names to fragrances. Reese Witherspoon, as an Avon ambassador, is one of the latest celebrities to add her name in developing In Bloom. Premium fragrances also tapped into exclusivity with limited editions attracting impulse and emotionallydriven purchases by consumers. Limited edition launches included Annick Goutal Rose Splendide, Elizabeth Arden 5th Avenue Gold, Lola Marc Jacobs Velvet Edition, and Marc Jacobs Daisy Pop Art Edition. Another notable brand to enter the local Malaysian market was Creed with several new products including Creed Royal Water. The fragrance was created in 1997 as a tribute to Princess Diana, appealing to consumers who like the association with the royalty. Mens fragrances also witnessed a number of novel scents. In addition to Big Pony and Creed Himalaya, there were Le Male Terrible from Jean Paul Gaultier, Paul Smith Man 2 and Davidoff Champion. Marc Jacobs launched its first masculine scent Bang in 2010. To emphasise to men the strong connection between nude physique and the fragrance, a provocative campaign starring Marc Jacobs himself was put in place for the launch. Mature and more affluent consumers drive the sales in high-end or exclusive fragrances. Something novel may include perfume featuring not Western, Japanese or local but Arabian scents. Ajmal with best-selling perfumes such as Sacrifice For Her and Entice For Her, also allows customers to make their own scents which will be given an ID number to re-order and make adjustments until they find the right scent. Premium fragrances attract target consumers with eye-catching and special packaging that some purchase in order to keep the attractive bottle. One new launch in 2010 saw popular French designer Philippe Starck work on the creation of new packaging for Nina Riccis LAir du Temps with bottle design inspired by Lalique.

COMPETITIVE LANDSCAPE
Avon Cosmetics (M) Sdn Bhd continued to lead fragrances with a 31% value share in 2010. Appealing to mass consumers, its wide distribution network reached into every corner of the country especially to nonChinese consumers. Avon offers many brands and choices ranging from Far Away, Sweet Honesty, Haiku and Imari for women to Black Suede, Black Leather, Titanium and Wild Country for men. The company also saw more Malay consumers switching from talcum and deodorants that contain perfume to real fragrances. Rampai-Niaga Sdn Bhd benefited from the shift in demand from mass to masstige fragrances and was one of the fastest growing players in 2010. New launches such as Dreams Unlimited and a growing number of outlets coupled with the rising significance of beauty specialist stores as retail channels, especially in smaller towns, underpinned an increase in fragrances sales for The Body Shop. Compared to other beauty specialist retailers, The Body Shop has more outlets and has a wider choice of fragrances plus different pack sizes and types which consumers find attractive. Fragrances saw international companies command high value shares with names such as Avon, Calvin Klein and Ralph Lauren leading. However, domestic manufacturers witnessed growing sales with Unza (M) Sdn Bhd, Alliance Cosmetics Sdn Bhd and Tohtonku Sdn Bhd continuing to improve with new products. In addition to Mood Magic, Enchanteur Paris was introduced in three new variants Adore, Belle Amour and Mon Amie. This new range was priced higher than its old range with a retail price difference of RM4 for each fragrance. Another new mass entry was Silkygirl Stunning. Among the three new products, Mood Magic was launched with a higher price than Enchanteur Paris and the lowest was Silkygirl Stunning. The only company that saw a decline in sales, despite new launches such as Beauty, was Calvin Klein. This was mainly attributed to the discontinuation of Contradiction in both mens and womens fragrances in the country.

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Fragrances

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Mass brands continue to hold dominance in fragrances with a wide consumer base. Avon brands, and brands Enchanteur and Silkygirl delivered good performance. Premium brands smaller base also continued to see sales increase with loyal followers who are accustomed to such exclusive scents. Attractive packaging, unsurpassed by mass brands packaging, attracts many purchases, often due to a liking for the striking bottles. In 2010, private label was still negligible as such products were considered unnecessary given that mass brands can be found at very low prices.

PROSPECTS
Consumers will see more masstige brands being introduced that are of growing interest to them. While affluent consumers will stick to their premium brands, Malaysia is dominated by consumers who are not overly demanding in terms of scents but are more concern with the price. Masstige brands will see more introductions by market players and upcoming brands. Fragrances will continue to grow positively over the forecast period with the influx of new product developments. Despite slower growth in premium unisex fragrances, masstige brands expected growth will offset performance in the slow-rising category. Mass mens and womens fragrances are likely to produce better performance with the growing interest in masstige brands. In addition, more Malay consumers are shifting to mass fragrances from talcum and deodorants. In line with the emergence of masstige brands, average unit price of fragrances is expected to fall. However, the drop will be softened by new premium launches in 2010 attracting affluent groups who desire exclusive scents. New product launches are expected to show positive performance in the short term. Other manufacturers will introduce more products particularly cheaper alternatives to premium brands such as masstige fragrances. One such local company One Drop Perfumes is working in that direction distributing fragrances inspired by international brands but selling the products at mass prices.

CATEGORY DATA
Table 1 RM million 2005 Premium Fragrances - Premium Men's Fragrances - Premium Women's Fragrances - Premium Unisex Fragrances Mass Fragrances - Mass Men's Fragrances - Mass Women's Fragrances - Mass Unisex Fragrances Fragrances
Source:

Sales of Fragrances by Category: Value 2005-2010

2006 119.0 48.7 67.8 2.5 124.9 36.4 88.5 243.9

2007 125.8 52.1 71.2 2.5 138.1 37.2 100.9 263.9

2008 132.2 55.2 74.4 2.6 155.3 39.2 116.1 287.5

2009 137.1 57.4 77.0 2.6 161.3 40.6 120.7 298.4

2010 141.4 59.4 79.4 2.7 172.8 43.0 129.8 314.2

112.9 45.6 64.9 2.4 117.5 35.6 82.0 230.5

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2

Sales of Fragrances by Category: % Value Growth 2005-2010

% current value growth 2009/10 Premium Fragrances - Premium Men's Fragrances - Premium Women's Fragrances 3.2 3.5 3.0 2005-10 CAGR 4.6 5.4 4.1 2005/10 TOTAL 25.3 30.3 22.2

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- Premium Unisex Fragrances Mass Fragrances - Mass Men's Fragrances - Mass Women's Fragrances - Mass Unisex Fragrances Fragrances
Source:

1.0 7.1 6.0 7.5 5.3

2.4 8.0 3.9 9.6 6.4

12.4 47.0 20.9 58.3 36.3

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3 % retail value rsp Company

Fragrances Company Shares 2006-2010

2006 25.6 9.7 5.6 6.0 4.8 3.4 1.4 2.6 2.0 1.5 1.6 2.2 1.4 1.3 1.4 1.3 1.1 1.1 0.2 0.2 0.4 0.3 25.0 100.0

2007 29.2 8.9 5.6 5.9 4.6 3.4 2.0 2.6 2.0 1.6 1.3 1.9 1.4 1.2 1.2 1.1 0.9 1.0 0.2 0.2 0.3 0.2 23.3 100.0

2008 32.9 8.5 5.6 5.4 4.1 3.2 2.4 2.5 1.9 1.7 1.3 1.6 1.3 1.2 1.2 1.0 0.8 0.7 0.2 0.2 0.2 22.1 100.0

2009 29.5 8.5 5.8 5.4 3.9 3.2 3.0 2.5 1.9 1.7 1.5 1.5 1.3 1.0 1.1 0.9 0.8 0.5 0.2 0.2 0.1 25.4 100.0

2010 30.7 7.6 5.8 5.5 3.9 3.2 3.0 2.4 1.9 1.6 1.6 1.4 1.4 1.1 1.1 0.8 0.8 0.5 0.2 0.2 0.1 25.1 100.0

Avon Cosmetics (M) Sdn Bhd Calvin Klein Cosmetics Co Ralph Lauren, Parfums Unza (M) Sdn Bhd Este Lauder Cos Inc Mandom (M) Sdn Bhd Alliance Cosmetics Sdn Bhd Parfums Christian Dior Chanel SA Elizabeth Arden Inc Rampai-Niaga Sdn Bhd Unilever (M) Holdings Sdn Bhd Hugo Boss AG L'Oral (M) Sdn Bhd Bulgari Parfums SA Gervas Corp Sdn Bhd Cosway (M) Sdn Bhd Tohtonku Sdn Bhd Yves Rocher (M) Sdn Bhd Mary Kay (M) Sdn Bhd Cosmopolitan Cosmetics GmbH Revlon Inc Amway (M) Sdn Bhd P&G Prestige Beaut GmbH Others Total
Source:

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 4 % retail value rsp Brand

Fragrances Brand Shares by GBN 2007-2010

Company Avon Cosmetics (M) Sdn Bhd Avon Cosmetics (M) Sdn Bhd Unza (M) Sdn Bhd Alliance Cosmetics Sdn Bhd Mandom (M) Sdn Bhd Avon Cosmetics (M) Sdn Bhd Unilever (M) Holdings Sdn Bhd Mandom (M) Sdn Bhd Unza (M) Sdn Bhd

2007 7.1 6.9 3.6 1.5 2.2 2.0 1.9 1.3 1.4

2008 7.7 7.7 3.5 1.8 2.0 2.2 1.6 1.2 1.2

2009 7.3 7.1 3.4 2.2 1.9 1.9 1.5 1.2 1.2

2010 7.6 7.4 3.6 2.3 2.0 1.9 1.4 1.2 1.2

Avon Far Away Avon Sweet Honesty Enchanteur Silkygirl Pucelle Avon Wild Country Brut Gatsby Dashing

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Avon Charisma Bvlgari BLV pour Homme Romance Aramis Eternity Designer Collection Boss in Motion Romano Silky for Men Eternity for Men J'adore Romance for Men ck one White Musk Follow Me Avon Mesmerize for Men 5th Avenue Allure Homme Gervenne Gervas Clinique Happy Chanel N 5 Trsor cK be Yves Rocher Dazzling Gold Mary Kay Yardley White Musk For Men Bvlgari pour Homme Pleasures for Men Contradiction Contradiction for Men Others Total
Source:

Avon Cosmetics (M) Sdn Bhd Bulgari Parfums SA Ralph Lauren, Parfums Este Lauder Cos Inc Calvin Klein Cosmetics Co Cosway (M) Sdn Bhd Hugo Boss AG Unza (M) Sdn Bhd Alliance Cosmetics Sdn Bhd Calvin Klein Cosmetics Co Parfums Christian Dior Ralph Lauren, Parfums Calvin Klein Cosmetics Co Rampai-Niaga Sdn Bhd Tohtonku Sdn Bhd Avon Cosmetics (M) Sdn Bhd Elizabeth Arden Inc Chanel SA Gervas Corp Sdn Bhd Gervas Corp Sdn Bhd Este Lauder Cos Inc Chanel SA L'Oral (M) Sdn Bhd Calvin Klein Cosmetics Co Yves Rocher (M) Sdn Bhd Este Lauder Cos Inc Mary Kay (M) Sdn Bhd Cosmopolitan Cosmetics GmbH Rampai-Niaga Sdn Bhd Bulgari Parfums SA Este Lauder Cos Inc Calvin Klein Cosmetics Co Calvin Klein Cosmetics Co

1.5 1.1 1.2 1.2 1.2 0.9 1.0 0.9 0.5 0.9 0.9 0.8 0.6 0.4 1.0 0.7 0.6 0.5 0.5 0.4 0.3 0.3 0.3 0.3 0.2 0.4 0.2 0.3 0.2 0.2 0.2 0.8 0.5 51.3 100.0

1.6 1.0 1.1 1.1 1.0 0.8 0.9 0.8 0.6 0.8 0.9 0.7 0.6 0.4 0.7 0.8 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.2 0.3 0.2 0.2 0.2 0.1 0.1 0.6 0.5 52.2 100.0

1.0 1.0 1.0 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.6 0.5 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.2 0.1 0.1 0.1 0.1 0.5 0.4 55.4 100.0

1.2 1.0 1.0 0.9 0.9 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.6 0.5 0.5 0.5 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 55.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 5 % retail value rsp Brand

Men's Premium Fragrances Brand Shares by GBN 2007-2010

Company Bulgari Parfums SA Este Lauder Cos Inc Hugo Boss AG Calvin Klein Cosmetics Co Ralph Lauren, Parfums Chanel SA Bulgari Parfums SA Este Lauder Cos Inc Calvin Klein Cosmetics Co

2007 5.5 6.0 5.0 4.5 4.0 2.5 0.8 0.8 2.5 68.4 100.0

2008 5.3 5.5 4.5 4.0 3.5 2.5 0.7 0.7 2.5 70.8 100.0

2009 5.3 5.0 4.0 3.5 3.5 2.0 0.5 0.5 2.0 73.7 100.0

2010 5.4 5.0 4.0 3.7 3.5 2.0 0.6 0.6 75.2 100.0

Bvlgari BLV pour Homme Aramis Boss in Motion Eternity for Men Romance for Men Allure Homme Bvlgari pour Homme Pleasures for Men Contradiction for Men Others Total
Source:

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 6

Women's Premium Fragrances Brand Shares by GBN 2007-2010

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% retail value rsp Brand Romance Eternity J'adore 5th Avenue Clinique Happy Chanel N 5 Trsor Dazzling Gold Contradiction Others Total
Source:

Company Ralph Lauren, Parfums Calvin Klein Cosmetics Co Parfums Christian Dior Elizabeth Arden Inc Este Lauder Cos Inc Chanel SA L'Oral (M) Sdn Bhd Este Lauder Cos Inc Calvin Klein Cosmetics Co

2007 4.5 4.5 3.5 2.2 1.3 1.0 1.0 1.5 3.0 77.5 100.0

2008 4.3 4.0 3.3 2.0 1.2 1.0 1.0 1.0 2.5 79.7 100.0

2009 4.0 3.5 2.8 1.5 1.0 1.0 1.0 1.0 2.0 82.2 100.0

2010 4.0 3.5 2.7 1.5 1.1 1.1 1.1 0.9 84.1 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 7 RM million

Forecast Sales of Fragrances by Category: Value 2010-2015

2010 Premium Fragrances - Premium Men's Fragrances - Premium Women's Fragrances - Premium Unisex Fragrances Mass Fragrances - Mass Men's Fragrances - Mass Women's Fragrances - Mass Unisex Fragrances Fragrances
Source:

2011 142.8 60.2 80.0 2.6 181.5 44.7 136.8 324.3

2012 144.1 60.9 80.6 2.6 190.9 46.6 144.3 334.9

2013 145.2 61.6 81.0 2.6 200.9 48.5 152.4 346.1

2014 146.2 62.2 81.4 2.5 211.7 50.6 161.0 357.8

2015 147.0 62.8 81.8 2.5 223.2 52.8 170.4 370.2

141.4 59.4 79.4 2.7 172.8 43.0 129.8 314.2

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 8

Forecast Sales of Fragrances by Category: % Value Growth 2010-2015

% constant value growth 2010-15 CAGR Premium Fragrances - Premium Men's Fragrances - Premium Women's Fragrances - Premium Unisex Fragrances Mass Fragrances - Mass Men's Fragrances - Mass Women's Fragrances - Mass Unisex Fragrances Fragrances
Source:

2010/15 TOTAL 3.9 5.6 3.0 -6.8 29.2 22.8 31.3 17.8

0.8 1.1 0.6 -1.4 5.3 4.2 5.6 3.3

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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