The fragrance industry is an integral part of the Indian economy and culture. Reports suggest the Indian fragrance market was expected to reach close to ₹140 billion by 2024. However, like all other industries, the fragrance market also took a major hit owing to the pandemic.
While the market is trying to recover from the dip in sales, there are many other challenges it is facing, including shortage of raw materials and packing material, and research and development.
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Due the strict import restrictions from around the world and specifically China, there has been a major shortage of chemical-based raw materials that are used for making fragrances. The shortage has led to a rapid increase in costs, eventually trickling down to the end product. Some raw materials have seen rates double within a span of six months.
Another part of the market, which has taken a hit, is the packaging industry. Everything from containers, to glass bottles, paper and other packaging materials had its raw materials and sometimes finished materials coming from different parts of the world. Many them were also imported from China. The increasing prices of fuel have also made a major impact on the shipping costs.
When it comes to the manufacturing of the glass bottle, India has some options but they don't offer very good quality. If anyone wants a superior quality glass bottles, they have to turn to manufacturers in Europe or China.
Since the Indian fragrance market landscape is changing with investments in the industry, and more young entrepreneurs joining it, the demand of today's consumer, who's more well-travelled, is also changing. They want luxury at affordable prices. With a little help from the government, existing players can improve their offerings and also attract new players in the glass manufacturing industry.
Research and development
The global fragrance industry has seen a massive growth in terms of research. India, however, has mostly been a follower despite being a major supplier of natural raw materials and aroma molecules to the world. The government needs to help the industry to make advancements and increase research in quality testing and machine learning-based developments to cater better to the customer and make a name globally.
Vidushi Vijayvergiya is the founder of ISAK Fragrances.