(2 min Read)
With the drastic slowdown of Luxury & Premium brand sales in China, all global eyes are now looking at India as the next growth frontier.
India is in the developed stage of a wave of ‘premiumisation’ as a mindset, affecting consumption patterns of ‘new money’ spenders.
Consumers have been visibly moving up the aspirational value chain from needs to wants. Mass customers are looking for premium options, while premium customers are aspiring to luxury brands.
Luxury fragrances are often the first accessible high-end purchase for an existing premium consumer. For anywhere between $50-$100 (₹4,500 – ₹8,500 one can acquire a well – designed & giftable product from any of the top haute couture (high-end) fashion houses like Armani, Prada, Dior, YSL (India’s # 1 imported and exported luxury fragrance brand) Calvin Klein & Davidoff.
India’s imports of premium & luxury brand perfumes are valued at USD$850 mn or (₹7,500cr) in ‘Annualised Retail Value’ (ARV). ARV is approximately 5x of product cost as the business requires sharing of significant retailer/distributor margins and marketing investments.
Correspondingly, exports (imports & re-exports of those imports) of Luxury & Premium branded fragrances from India have also picked up significantly, adding up to USD $300mn (₹2,500cr) in Annualised Retail Value (ARV) between January 2024 & December 2024. Based on publicly available IM/PEX official data, brands like YSL, Versace, Gucci, D&G, Shiseido & Hugo Boss from Baccarose Perfume & Beauty Ltd, successfully top the list of the most exported/re-exported traded luxury brands enabled by existing ICD’s (Inland Container Depots) and efficient Free Trade Zones (FTZ/SEZ’s).
In the next bracket of cross category brands like Body Shop, Kiehls, Max Factor, Kylie by Kylie Jenner Bath & Body Works etc from Quest Retail in second place for export/re-export. Followed by cross category player BCPL (luxury & masstige), with brands like Bvlgari, Chopard, Parfum de Marley, Benetton, Antonio Banderas etc. These three players are at the forefront of enabling import/re-export facilitation, most primarily using the Dubai inspired free trade zones promoted by the Indian Government’s new premium development initiatives, akin to the success of the diamond cutting-polishing import/re-export verticals that thrived until the disruption caused by the introduction and adoption of lab grown diamonds.
FOGG by Vini Cosmetics leads both locally & in exports in the Mass segment and Bella Vita leading exports in the Mass – Premium category.
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The fastest growth for perfumes is in the overall Premium price band (Mass-Premium, Premium & Premium plus). Bella Vita, a phenomenal ‘Make in India’ story founded by Akash Anand, Anu Anand & Ashima Anand is the top selling fragrance positioned as ‘mass premium’ with a 100ml bottle available for $6-$10 (500-900rs) and is the unchallenged, as yet #1 bestseller across all e-commerce platforms.
Titan Skinn, the #1 premium brand in fragrances ranges between $10-$50( Rs. Rs.800 – Rs.4,000) and is also the #1 brand in most organised retail chains such as Shoppers Stop, Lifestyle & Reliance Trends followed at #2 by another home-grown brand – Embark founded by award-winning perfume industry veterans Varsha Dalal & Sejal Kapashi. Ananya Birla’s new ‘Contraband’ perfume offering just dropped. With the heft of the Birla group behind the brand and Ananya’s charismatic personality, it’s likely to shake up the market both in terms of local sales as well as exports.
International Luxury brands have been making a beeline to set up their corporate offices & operations in India. COTY, PUIG & L’Oreal who are the largest corporate global licensees of premium & luxury perfume brands have already localised their sales, marketing & supply chain operations, while prioritising the D2C platforms to reach consumers efficiently and tightly controlling the marketing narratives.
With over 300 million mass consumers rapidly becoming conscious about looking, smelling & feeling better, we can expect to see most of the upcoming international luxury & local premium brands setting up or expanding their manufacturing, distribution, logistics, import/re-export verticals, sales & marketing offices here directly catering to the new Indian ‘Premium’ class.
Sahil Sadarangani
Partner, FWC 360