Giovanni Luca Atena
Director ICE Messico
Italian Trade Agency Mexico
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Expert Contributor

How Exclusive Do You Feel?

By Giovanni Atena | Thu, 04/21/2022 - 10:00

The main difference between niche perfumes and conventional perfumes lies in the concept behind the brand. Niche perfumery is history, communication, expression of emotions, conveyed "per fumum" (through the smoke). These masterpieces are works of art that pass across fashions and rank as milestones in style and aesthetic references of all ages.

They are called "niche" because they are creations of high artistic, compositional, qualitative and stylistic value.

The brand’s offerings are directed toward consumers seeking creations of great originality, character and artistic value. They are offered in European and Extra-European markets through an extremely selective and high-quality distribution network to maintain their peculiarity.

The Italian Agency for Foreign Trade ITA, as part of its promotional activities in support of the cosmetics/perfume sector and as a complementary action of Esxence, held for the first time in Mexico the Artistic Italian Perfumery event, on March 30, 2022, at the Metropolitan Palace.

Esxence is a unique exhibition in the world of artistic perfumery, hosting every year in Milan the excellence of international and “Made in Italy” artistic perfumery, a sector that in Italy represents 12 percent of the income of alcoholic perfumery and 2.5 percent of the Italian beauty business.

This market niche is made up of many small and micro-enterprises, to the point that companies with a turnover of more than 10 million (US$10.9 million) are considered “large.” The commercial performance of the companies in the sector was especially affected by COVID-19, both due to the closure of retailers in the world, which constitute the main sales channel, and due to problems in the supply of raw materials that are difficult to find in the market.

The program aims to enhance the Esxence event, maintaining its uniqueness, underlining its identity as a fair of Italian excellence and supporting the productive sector of artistic perfumery by promoting the visibility of Italian exhibitors and meetings with foreign counterparts.

According to estimates by the Centro Studi di Cosmetica Italia, the value at the end of 2021 of artistic perfumery was 136 million (US$148 million), with close to 24 percent growth, compared to the total of alcoholic perfumery, which reached 1.085 billion (US$1.2 billion) at the end of 2021, or 22 percent growth.

The large corporations of artistic fragrances, that is, companies that generate between €10 million and 100 million (US$108 million) in turnover, grew the most in the European market in the pre-COVID period, where they registered development trends close to 15 percent, in contrast to the lower trend of companies with less than 10 million euros (+4 percent).

In the post-COVID period, until the beginning of 2022, the sector had started rebounding from the pandemic, although it had not yet recovered the values ​​of 2019. It is estimated that the return to 2019 levels will be reached in the second half of 2022.

Niche perfumery is in the midst of a radical and rapid transformation, so profound as to alter the very way in which it is defined; in fact, today, it is preferred to define it as "artistic and research" perfumery.

Indeed, to capture the attention of young consumers, scent houses and brands are shifting the classic narrative toward fragrances created by creators the public can relate to. Inspiration and collaboration with artists come from the world of pop culture and promote freedom of creation, experimentation and contamination thanks to different backgrounds and experiences.

The change that is taking place is also related to the structural evolution of the sector: the traditional framework of the offer dominated by small brands and with a strong and accentuated creative identity in an exclusive market, in which rarity and singularity attributed an added value to fragrances, has given way to a competitive map that primarily sees two very different strategic groups. On the one hand, the brands that follow the traditional positioning, and on the other, some "reference" brands of niche perfumery that, after being acquired by large cosmetics and fashion conglomerates, have made an extraordinary dimensional leap, favored by distribution expansion and cluster networks.

This evolution, together with digital marketing and online sales, represents a great challenge and opportunity for growth, not only for perfumery but for the entire supply chain.

Photo by:   Giovanni Luca Atena

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