News Jul 15, 2024

PERFUME OF AN UNEXPECTED ASIA

The project code name « MADEMOISELLE » is a unique opportunity to invest in a fast-growing luxury niche Fragrance House fusing Asian inspirations and the classicism of French perfume heritage.

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“THE PERFUME OF AN UNEXPECTED ASIA”: The Fragrance House is uniquely positioned with its strong cinematic story-telling and multi-sensorial approach that allows for an immersive olfactory experience highlighting Asia to the world.

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The founder has identified a need of USD 1M up to USD 7M to boost the growth:

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Enhance the retail presence and build the Global Distribution Network;
Increased Brand Events and Global trade shows for brand visibility
Continue the development of new products;
Strengthen operational facilities and machinery
Strengthen the marketing and digital development of the brand globally.

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Use of funds in 2024 = USD 1,000,000 / Revenue 2024f = USD 1,150,000

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Increase production capacity with purchase of machinery - USD 350,000
Organise pop-up events in key target markets, UK, US, France, Italy - USD 250,000
Launch of new product range (Master Perfumer Series) & a new exclusive lifestyle products range - USD 350,000

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Use of funds in 2025 = USD 3,500,000 / Revenue 2025f = USD 3,300,000

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Continue and boost Pop-up events in key target markets - USD 750,000
Launch of global film collaborations with the Brand - USD 300,000
Obtain GMP certification of warehouse facilities - USD 750,000
Strengthen operational and logistical infrastructures for global distribution - USD 500,000
Increase offline and online marketing plans and engagement of global ambassadors and brand partners - USD 1,000,000
Hire key senior team members - USD 250,000
Option: Opening a Flagship store in France - USD 1,000,000

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KEY FIGURES:

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A range of 12 unique fragrances commercialised + Launch of a Master Perfumer Series & a luxury Lifestyle collection

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OVERALL STRATEGY TO ESTABLISH AS A MAJOR NICHE PERFUME HOUSE AND ACCELERATE FROM 50 DOORS TO +400, REACHING USD10M REVENUE BY 2028/29

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1. TIER 1 EXCLUSIVE DISTRIBUTION - BRAND BUILDING AND POSITIONING MARKETS: Paris, London, Milan, New York, Dubai.

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Through strategic placement, this will communicate the brand’s association with luxury, as well as the recognition of clientele whose choices shape the public opinion that will follow them. Positioning in recognized high-end luxury points-of-sales would be key to secure the halo-effect of peer placement, within the beauty, fragrance, and fashion industry.

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Given the prime positioning, the company will invest key marketing funds in implementing immersive marketing strategies (offline) in these exclusive markets for brand visibility.

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In addition, the Company will be partnering with top global hotels for in-store placement as well as partnerships for amenities, and also top airline partners for on-board sales. There is a strong position for the Company to be the key fragrance partner across top Asian airlines.

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2. TIER 2 INTENSIVE DISTRIBUTION - KEY REVENUE TARGET MARKETS: Russia, China, Italy, Germany, South America, Middle East

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The company will increase the availability of the products as much as possible through distribution in multiple outlets and in different countries with demonstrated appetite for luxury fragrances and niche-fragrances.

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The purpose of this strategy is to maximize market penetration by offering potential customers many opportunities to connect with the brand and purchase products.

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The goal is to maintain the brand image while offering broader distribution coverage, where customers will have higher accessibility to finding the product.

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3. TIER 3 SELECTIVE DISTRIBUTION - SECONDARY REVENUE TARGET MARKETS: East Europe, Rest of Europe, Rest of Asia.

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There will also be opportunities to look at fragmented markets with multiple points of sales. This will involve maintaining control over pricing and adapting to changes in the market and trends in a flexible way, by offering only a select range of the company products.

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4. STRENGTHEN THE LUXURY POSITIONING WITH A PRODUCT STRATEGY

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The Company will also execute a Product strategy that will introduce:

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a more premium range of products
a wider range of lifestyle products.

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This is crucial for entry into large retail partnerships where a minimum range of SKUs is needed.

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KEY INVESTMENT CONSIDERATIONS:

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1. The Company’s Key Strengths

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The Founder of the Company is a global citizen and a storyteller at heart, with a background in both finance and the arts. She grew up in Singapore, with Shanghainese, Malay and Dutch Indonesian heritage, and has lived around the world – from Australia to Dubai, New York to South America, London to Paris – all the while absorbing and learning from these diverse cultures and environments.

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The Founder’s background leads to a brand with a strong unique DNA that balances European luxury aesthetics and Asian timelessness and elegance, with a strong understanding of sustainable market appeal across various key markets.

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In addition, no other brand in the market has a unique travel narrative focused across the Asian continent, highlighting its heritage, philosophies and culture. This will be done with meaningful storylines combined with strong cinematic language, done in collaboration with the Company’s strong global creative network of world-renowned artists, designers and performers.

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The company has a range of high-quality perfumes with a unique olfactory DNA, having an understated elegance and transparency in the fragrances while at a 35% Extrait de Parfum concentration.

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2. Growth Drivers

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2.1. Enhance the offline, retail presence:

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The opening of a flagship store in France will strengthen the market positioning of the Company as a global key player in the Fragrance industry. This also allows for a strong presentation of the Company’s branding and stronger engagement with global clientele in a key market.

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The location of the Store will be in a prime position associated with other luxury brands. The Company has already prepared a strong store concept to be implemented immediately.

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In addition, pop-up brand events in respective country markets will increase Brand engagement through innovative and immersive customer experiences.

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2.2 Price Positioning

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For the initial market entry and to build up initial market traction, the brand set a more competitive price point. This allows consumers to enter the Brand universe through accessible price points.

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There is upside to increase prices and to capture market share in the top luxury segment of the Fragrance market, highlighting the quality of the Extrait de Parfums offerings, compared to Eau de Parfum and Eau de Toilette.

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This will be made possible with the opening of the Flagship store in France and the distribution strategy into the top luxury retail malls for a higher positioning in the market.

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2.3 Build and strengthen the Global Distribution Network

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The Company will be positioning its products in top key luxury markets including Paris, London, Milan, New York, Dubai.

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The market entry will be focused on securing top luxury retail partners to position the premium positioning of the brand, before going into the next stage of tier 2 retail distributors for wider reach.

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Participation in more global trade shows and offering adequate market support via co-sharing of marketing initiatives to distributors and retailers would be crucial in the building and strengthening the global distribution network.

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2.4 Innovative Brand Experience

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Collaboration with Global Film schools to create a unique immersive brand experience that will enhance the consumer journey and further highlight the Company’s unique brand DNA.

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Collaboration with up-and-coming filmmaking talent will position the Brand as a thought-leader, providing a new sensorial genre of film that combines scent and audiovisuals.

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These film concepts will also be applied at pop-up brand events for an immersive customer experience.

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In addition, the Company has a strong global creative network of world-renowned artists, designers and performers for other immersive experiences, e.g. Collaboration with artists for a limited artist series inspired packaging and launch brand events supported by famous performers.

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2.5. New Products Development

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2.5.1. Master Perfumer Series

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The Brand will launch a Master Perfumer Series in collaboration with world-renowned perfumers that have created notable perfumes already in the market. This will position the brand strongly within the Fragrance industry and customers, adding to the credibility and perceived quality of the fragrance offerings.

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The Master Perfumer Series would also be positioned at a premium price point (1.3-1.5x core range price point) to allow for positioning in the top price points in the Fragrance market, opening up a new clientele of consumers.

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2.5.2. Lifestyle Collection

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The Brand will be launching exquisite, scented lifestyle products / objects of desire hand-selected by the Founder. These objects relate to the perfume story: the place, the emotion, the inspiration behind its creation.

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All products will be done in collaboration with world-renowned designers showcasing luxurious local craftsmanship, offering a strong and unique lifestyle range to enhance the product offerings.

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2.6. Marketing development strategy:

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The Company will be focusing on amping up aggressively its digital presence in key country markets aligned with on-ground marketing efforts with country retail partners.

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The Company has also identified key global ambassadors and brand partners to increase perceived brand equity and positioning in the luxury market segment.

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3. An Attractive Market

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The global Luxury Niche Perfume is booming, having tripled over the last decade, the market is set to double by 2030: valued at USD 3BN in 2024 it is expected to reach USD 6bn million (CAGR of 13.2%). Source

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The market growth is driven by:

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The Chinese market (+17% CAGR): only 2.5% of the population use perfume, compared with 84% in France today.
A shift in consumer interest from fragrances by the major international houses to niche fragrances.
The changing attitudes of Gen Z: self-expression and gender neutrality.

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In 2023, 3,314 fragrance launches were recorded, including 1,563 in the niche brands (+16% vs. 2022, +970% vs. 2003). Sales of luxury fragrances (>100 euros) increased by +177% between 2019 and 2022. Source

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With the growing appetite for luxury goods from emerging markets, new brands from Asia & Middle East are increasing. Source

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Sources : Xerfi, Statista, Mintel, JingDaily, NPD

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4. M&A Trends

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Strong M&A activity driven by financial investors attracted by the sector\'s strong momentum and by strategic players looking to accelerate their growth and diversify their offering.

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Innovative brands and fragrance houses are attracting financial investors:

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EURAZEO takes a minority stake in EX NIHILO for EUR25M in January 2024 (source)
Perfume Lounge raised USD250K with Deepak and Parvesh in seed funding 2023 (source)
Maison 21G, a Singapore-based haute perfumery brand, closes Series A funding in 2022 two years after initial launch (source)

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Strategic Acquisitions of niche brands by major players to enhance their product portfolio

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Kering acquired luxury heritage house Creed in 2023, for EUR3.5BN (source)
Puig acquired a majority stake of Byredo for EUR1BN in 2022 (source)

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Companies are targeting acquisitions that help them adopt sustainable practices

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Croda acquired Parfex in 2021 for EUR45M with their sustainable and eco-friendly ingredients in mind (source)
Givaudan acquired Custom Essence for their natural ingredients in 2022 for EUR270M (source)

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Expansion into emerging markets:

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Eurofragrance has acquired PT Euronindo Fragrance in Indonesia in 2023 to reinforce their presence in the Asia Pacific region (source)
Belgian fragrance manufacturer Azelis acquired a majority stake of Ashapura Aroma in 2022 for USD150M (source)

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