Smelling Fine on a Dime: 3 Insights on Malaysia’s Fragrances eCommerce Market

Amanda Lim

Smelling Fine on a Dime: 3 Insights on Malaysia’s Fragrances eCommerce Market

Smelling Fine on a Dime: Malaysia's Fragrances eCommerce Market Trends

Like its Southeast Asian neighbours, Malaysia is within a region that enjoys sunny weather all year long. Businesses selling fragrances have smelt this opportunity to set up shop in this tiger cub economy, and your eCommerce business can do the same by tapping into the developed infrastructures in this close to ¾ urbanised country.1

The fragrances industry in Malaysia reached MYR 622 million in 2018, and is forecasted to grow to MYR 863 million in 2023 with a CAGR of 7 per cent.2 However, with the recent COVID-19 breakout, there’s speculation that demand for items like fragrances may take a hit on its growth.

But for some Malaysians, fragrances will still be bought to help address personal care concerns to make them feel more self-confident.

Smelling nice is but one aspect of personal care in anyone’s routine. If you want to read more about the personal care market in general, we’ve covered them here.

Key Things to Know about Malaysia’s Fragrances Consumers

As previously mentioned, Malaysia’s urbanisation is at 73 per cent, just shy of Singapore (100 per cent) and Brunei’s (78 per cent) urbanisation rate in Southeast Asia.3 This brings perks like a high internet penetration rate (83 per cent in 2020), and the modern conveniences of online shopping, where 82 per cent of these internet users have ever purchased via eCommerce.4

In Malaysia’s eCommerce personal care market at large, the largest group of spenders fall within the millennial age group (25-34 year olds) at 30 per cent. Compared to other age groups, this particular group of spenders are make extensive use of promotions, deals and discounts which helps to keep their online spending habit at a manageable cost.5 The millennial age group consists of young adults who are just entering the workforce and don’t have as much disposable income compared to their older peers.

When it comes to income, the average annual income of all Malaysian households is between MYR 40,700 (USD10,000) to MYR 101,000 (USD 25,000).6 Even though there’s a rising GDP per capita, the income gap between the rich and the poor is also increasing. With taxes also squeezing the middle class,7 middle class Malaysian consumers will feel the pinch.

However, the fragmented fragrances market in Malaysia means there is no clear market leader in terms of brand share. This means an opportunity for international brands and online merchants to enter this market. Currently, Avon Cosmetics leads the pack, but it only holds 8.4 per cent of market share in 2018. This is followed closely by Wipro Unza at 6.1 per cent, and Calvin Klein at 6.1 per cent as well.8 If your products are able to cater to this young urbanite population and their unique problems, you’ll have a chance in grabbing your market share too.

If you’d like to find more insights on Malaysian eCommerce in general, head over to our Malaysia country page to find out more!

Wanna sell your fragrances into Malaysia? Get your products into the tiger cub economy fuss free with Janio’s shipping solutions. Talk to us and find out more!

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Now that we know these background factors on the fragrance market, let’s dive into some insights on why Malaysians purchase fragrances.

Unisex Fragrances are Winning Malaysian Hearts All Over

Unisex fragrances are winning Malaysians due to their increasing open mindedness and experimentation

With body odour being a concern that cuts through gender divides in Malaysia’s hot and humid climate, it’s no surprise that fragrance products exist to address them.

Fragrances are usually gendered products, with woody smells targeting men and floral smells targeting women. But what’s interesting is the fact that gender neutral fragrances are starting to appear, and they’re taking Malaysia’s market by storm. In an earlier GlobalData report in 2015, unisex fragrances were predicted to have the highest CAGR at 4.8 per cent among fragrance products from 2014 to 2019.9

This is supported by an uptick in unisex fragrances globally. The premium unisex fragrance market had the strongest global sales at 7.5 per cent according to Euromonitor’s report in 2018. Additionally, 51 per cent of global unisex fragrance launches in 2018 were unisex, a sharp increase from 17 per cent in 2010.10

Consumers are also becoming more open minded and experimental, which solidifies the case for unisex fragrances entering to cater to Malaysians’ fragrance needs. Prior to the entrance of unisex fragrances, Malaysian women have admitted to using masculine scents on themselves in a feature by the Star. The men and women interviewed in the newspaper also said they don’t mind sharing their fragrances with their partners too, further pushing the idea that unisex fragrances is acceptable for Malaysian consumers.11

eCommerce platforms are also starting to pay attention to this product trend. Lazada, Malaysia’s top eCommerce platform and one of the top platforms in Southeast Asia, has a dedicated section just for unisex fragrances.12 If you carry a few gender neutral fragrances, you can consider listing your product on this platform to get your product to as many people as possible.

Listing on platforms like Lazada is a safe way for you to test out Malaysia’s market. Alternatively, there’s evidence that selling fragrances on your own eCommerce store can also do well in Malaysia. For instance, there are a few resellers running their own online fragrance stores which are able to attract Malaysian buyers with their seasonal promotions and discounts strategy.

With these online channels, you can choose to fulfil your international orders using the cross-border shipping model. With this model, you wouldn’t need to have a significant financial investment compared to setting up a local supply chain within Malaysia.

On-the-Go Malaysians Seek More Portability in Fragrances

Urban living drives Malaysians to adopt more on-the-go lifestyles, and this is reflected in the types of fragrances they buy. Dashing, a brand owned by the 2nd biggest market holder in Malaysia, Wipro Unza, released a product line of pocket-sized fragrances. At 18 ml, these mens’ fragrances can easily fit into the back pockets of mens’ trousers, making it easy to carry and use anywhere.13

Dashing isn’t the only brand opting to sell their fragrances in smaller bottles either. In the premium market, Louis Vuitton made their Le Jour se Leve and Rose De Vents product line in a travel size as well. Each of these bottles are at 7.5 ml – half the size of those thin perfume bottles that fit a purse – and comes with four refills that magnetically clip onto the spray for ease of use.14

Selling products in smaller sizes also gives an advantage for eCommerce merchants. Because of this need to be on-the-go, the small, value-for-money vial of perfume can appeal to the need for portability, price sensitivity, and helps to address their scepticism when shopping online.

These brands also engage influencers to win over Malaysians with their marketing campaign. For instance, Dashing engaged sports influencers like Fazziq Muqris15 and travel influencers like Reef Omar16 to promote their products on Instagram. We’ll cover more on how to utilise these marketing channels when we discuss how to enter Malaysia’s eCommerce market below.

Price Sensitivity is Edging Out Luxury Brands

Luxury brands in the Malaysian market are seeing dampened sales as consumers become more price sensitive towards non-essentials. Statista has forecasted that 57 per cent of the fragrance market’s revenue will belong to non-luxury goods in 2020,17 which isn’t surprising given that the middle class is getting squeezed by overtaxation.18

This has made way for the body mist to enter Malaysia’s market, giving luxury brands a run for the money. Body mists have a lesser concentration of fragrance in its product, making them a cheaper alternative to eau de toilette or eau de parfum. Body mists particularly appeal to the young, cash-strapped consumer, but older consumers are also inclined to purchase body mists for their use as well. A Bath & Body spokesperson, quoted on New Straits Times, has mentioned that consumers for their body mist products range from 18 year olds to 45 year olds.19

With the fragrances market in a fragmented state, mass market fragrances will continue to fight on price point in order to attract consumers. With eCommerce platforms like Shopee and Lazada running themed promotions seasonally, international brands that have yet to enter can take advantage of the platform’s campaigns to win Malaysian customers over. But this has to be backed by a solid marketing strategy in order to sustain the eCommerce business as nearly half of Malaysians are swayed by new brands if they display value for money according to Nielsen’s study in 2019.20

However, luxury brands that carry premium fragrances will have the advantage of Malaysians’ brand loyalty, specifically those who already buy luxury goods from these fashion houses like bags and accessories.

Additionally, reseller websites like Luxury Perfumes, PerfumeStore, and Perfume Berry are starting to gain stronger distribution for premium fragrances according to Euromonitor.21 While premium products are usually sold in department stores and standalone retail stores or kiosks, eCommerce as a sales channel is emerging rapidly for these premium goods.

Entering Malaysia’s eCommerce Fragrances Market

With more Malaysian consumers online than ever, social media is also increasingly used as a means to do their research on specific products. According to Starngage, 86 per cent of women would turn to a social network before making a purchase, and 71 per cent of consumers are likely to make a purchase based on a social media reference.22

You could take a leaf out of Wipro Unza’s playbook and engage influencers that help to position your product amongst your target audience. Since Dashing’s pocket sized product was a men’s brand, it made sense to engage in sports and travel influencers to promote their product.

Once you have your marketing channels down, you’ll also need to know where you’re selling your product. Listing on eCommerce marketplaces like Lazada and Shopee is a good start if your product is made for the mass market. But if you’re a premium product, you may want to consider online or omnichannel retailers like Hermo and Sephora.

Lazada and Shopee enjoy a high volume of monthly visitors at 10.2 million visitors23 and 25 million visitors24 respectively in the month of February 2020. While Hermo and Sephora have 355 thousand visitors25 and 292 thousand visitors26 in the month of February 2020, the number is nothing to sneeze at since these sites are targeted towards consumers who would buy premium products. Additionally, these online stores also run their own seasonal discount and promotion strategy to win over price sensitive Malaysians.

Since brick-and-mortar stores are also seeing less foot traffic due to the fears of catching COVID-19, shoppers could turn to eCommerce for their quick shopping fix. To ensure that you can give them a pleasant eCommerce experience, getting a reliable shipping partner who knows how to handle fragrances is key. Ultimately, you would want to keep a pulse on what’s happening in Malaysia’s market before making the jump. If you’re interested to know more about Malaysia’s eCommerce trends as a whole, consider getting our updated Guide to Malaysia’s eCommerce Market.

 

To find more on the latest news on logistics and eCommerce in Southeast Asia, consider signing up for our Janio newsletter.

If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.

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Interested in Malaysian Health and Beauty eCommerce insights? Find more of them here!

References

  1. Worldbank: Urban population (% of total population) – Malaysia
  2. Euromonitor: Fragrances in Malaysia
  3. Worldbank: Urban population (% of total population)
  4. Hootsuite/We are social: Digital 2020 – Malaysia
  5. Marketing Magazine: Gen-Y​ ​Shaping​ ​Up​​ ​Beauty​ ​Shopping​ ​in​ ​Malaysia
  6. Singapore Business Review: Malaysian household spending to grow 10.8% by 2022
  7. Malay Mail – The overtaxed middle class | Opinion
  8. Euromonitor: Fragrances in Malaysia
  9. GlobalData Consumer and Market Insights: Fragrances Market in Malaysia
  10. Cosmetics Business reveals the 5 Biggest Fragrance Trends in New Report
  11. The Star: Malaysians feel the freedom in gender neutral fragrances
  12. Lazada: Unisex Fragrances
  13. Euromonitor: Fragrances in Malaysia
  14. Ibid
  15. Instagram: Muqris (@fazziqmuqris)
  16. Instagram: Reef Omar (@reefofficial)
  17. Statista: Fragrances in Malaysia
  18. Malay Mail – The overtaxed middle class | Opinion
  19. New Straits Times: Ringgit and scents
  20. Nielsen: What’s new? Malaysians say yes to trying new brands
  21. Euromonitor: Fragrances in Malaysia
  22. Starngage: Influencer Marketing in Malaysia
  23. Similarweb: Lazada.com.my Analytics
  24. Similarweb: Shopee.com.my Analytics 
  25. Similarweb: Sephora.com.my Analytics
  26. Similarweb: Hermo.my Analytics
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