The perfume market in Israel has undergone significant changes in recent decades, mainly in terms of consumption habits of men and women, competition between networks, and the entry of parallel imports. This market is in constant growth, with consumption patterns changing according to economic, cultural, and technological developments. At the same time, there has been an increase in consumer awareness of international brands and luxury products, trends that have led to intensified market competition.
The perfume market in Israel is still clearly divided between female and male consumers, although the gender gap is narrowing. Women use perfumes at twice the rate of men, with the annual consumption of women's perfumes in Israel estimated at around NIS 600M. However, men's perfume consumption has also significantly increased in recent years, currently standing at over NIS 300M per year.
One NIS Billion a Year
Until a few decades ago, men were content with aftershave – a post-shaving antiseptic product with a light scent. Today, the wide variety of luxury perfumes for men, including Eau de Parfum (EDP) and/or Eau de Toilette (EDT), reflects the change in the perception of masculinity. Men today are increasingly interested in their appearance and personal grooming, and perfume has become an integral part of modern life. The Arab sector in Israel, for example, has seen an increase in the use of luxury and well-known perfumes influenced by exposure to countries like Turkey and the Emirates.
This trend is also evident in the Haredi and religious-national sectors, which in recent years have adopted the use of perfumes as part of daily grooming, thus increasing the overall demand for perfume products.
The perfume market generates about one NIS billion annually and is influenced by several key trends: The first is the proliferation of brands, including international and luxury brands sold across different networks and online stores. The second is the opening of the market to parallel imports a few years ago, which led to a temporary reduction in prices.
Parallel imports allowed many in Israel to purchase perfumes at lower prices than in traditional networks. But, as with many cases in the local market, the price drop did not last, and many perfumes returned to their previous high prices.
However, many online stores have emerged and tried to capture market shares from major pharmacy chains, led by Super-Pharm, which manages to maintain its position as a leader in the Israeli perfume market through expansion into additional segments such as toy and technology products on its sales sites.
It can be seen that competition in the Israeli perfume market is primarily concentrated among three main pharmacy networks: Be by Shufersal, Super-Pharm, and Good Pharm from the Rami Levy Group. In addition to these networks, specialized perfume stores and other networks such as April and Hamashbir Lazarchan also operate in the market.
Super-Pharm, the leading and long-established pharmacy network, maintains its position through a wide range of perfumes, quality customer service, and attractive promotions throughout the year. Be also offers a similar range with some differences in prices and brands. The Good Pharm network entered the market with the goal of reducing prices, but over time the price gaps have narrowed, and today customers choose not only based on price but also based on the overall shopping experience.
Stores like Super-Pharm, Be, and Hamashbir Lazarchan offer dedicated perfume consultants who provide personalized recommendations and advice on products. These consultants contribute to increased sales, especially when it comes to expensive products with an average price of around NIS 200 per perfume bottle, compared to products in supermarkets with much lower average prices.
With the rise of online commerce, many online stores have offered perfumes at competitive prices, leading to a slight decrease in physical competition. However, the shopping experience remains a significant component for many customers who prefer to visit a store, test the perfume on their skin, and make a decision on the spot.
Perfumes, especially when it comes to gifts for holidays or loved ones, are products associated with emotion and personal experience. Many consumers go to physical stores to try the perfume on their skin, experience the scent, and ensure it suits them. In stores like Super-Pharm, one can also see a range of international brands along with a personal perfume matching experience by a professional consultant.
Wide Range, Large Gaps
Sales in the perfume market spike mainly before the Jewish High Holidays and Passover, when many people buy perfumes as gifts for family and friends. During these times, sales can double the regular monthly rate. Romantic holidays such as Valentine’s Day, Tu B’Av, and Christmas also lead to a sharp increase in perfume consumption, especially among women.
Retail chains prepare specifically for these periods, with unique promotions and fast shipping on online sites. However, competition is not limited to local networks – duty-free shops at airports also offer attractive deals, and consumers flock to take advantage of the opportunity to buy perfumes during trips abroad.
Despite the increasing competition between networks and online stores, there are significant price gaps between products. An examination of well-known perfume brands found price differences of up to 66% for the same product across different networks. This means that consumers must compare prices before making a purchase, especially during promotional periods or holidays.
The advertising of promotions by different pharmacy networks is very important, as often a promotion advertised as a significant saving turns out to be less advantageous compared to promotions at other networks or online stores. Stores like KSP, which also shows growth in perfume sales, manage to compete with pharmacy networks with attractive prices and fast delivery services.
We selected a range of leading branded perfumes and checked the prices at three of the major pharmacy networks in Israel, aiming to identify significant price gaps and determine whether it is worth waiting for the next vacation for a purchase. We found that there are brands where the competition is very close and even prices are identical, but we also found products where price differences exceed 60%. Therefore, it is very important to take advantage of promotions offered throughout the year, check prices online before purchasing, and ensure that we are not paying too much when swiping our credit card for hundreds of shekels.
Some examples: Thierry Mugler's Alien perfume sells for NIS 539 at Good Pharm, compared to NIS 479 at Be and NIS 449 at Super-Pharm. A reverse trend is observed with Christian Dior's Fahrenheit (NIS 474 at Super-Pharm compared to NIS 479 at Be and NIS 429 at Good Pharm).
Christian Dior’s J'adore is priced at NIS 636 at Good Pharm – significantly cheaper than Super-Pharm - NIS 818 and Be with NIS 819. Narciso Rodriguez's Ambra sells at Good Pharm for NIS 329, a 36% gap compared to NIS 444 (Super-Pharm) and NIS 449 (Be). A 45% gap was found between the price of Tom Ford's Black Orchid at Good Pharm (NIS 529) compared to NIS 770 at Be and Super-Pharm. At the peak of the gaps (66%) is Juliette Has a Gun's Not a Perfume: NIS 299 at Good Pharm, NIS 399 at Be, and NIS 499 at Super-Pharm.
It should be noted that the Israeli perfume market is not isolated from the global market. International luxury brands such as Chanel, Dior, and Armani are also in demand in Israel, and the culture of using natural and organic perfumes is gaining momentum. Local consumers are more aware of environmentally friendly and healthy products, and there is an increasing amount of advertisements and demand for natural products.
Furthermore, the perfume market is influenced by campaigns from luxury fashion brands such as Gucci and Prada, which connect to the world of high fashion and offer grooming and perfume products that are on the global consciousness.
In conclusion, the perfume market in Israel continues to grow and develop, with increasing competition between major networks and online stores. The shopping experience and diverse offerings make perfume purchases an important part of the modern consumer experience. With the narrowing gender gap and global competition, Israeli consumers enjoy a broader selection, though they must be cautious of high price differences and keep track of promotions and opportunities.
The review was conducted by the Institute for Retail Research. Prices are based on reports from retail networks to the Economy Ministry's website, PriceZ, and network websites. Images are for illustrative purposes only. T.L.H. Data is accurate as of 09/10/2024.