Is Mexico the next great fragrance market?
For over a decade, Le Labo’s City Exclusive fragrance collection has been a useful tool for generating desire for perfumes exclusive to their respective cities. But as the collection has grown, it’s become more than just a marketing strategy — it’s also a map of growing perfume hubs.
In 2019, Miami, on the start of a luxury retail upswing, got its own entry with Le Labo’s Tabac 28. Last year, Shanghai welcomed Myrrhe 55, as well as Le Labo’s first store in mainland China, where a niche fragrance boom doesn’t appear to be slowing anytime soon. And now, the Estée Lauder-owned fragrance brand is expanding the City Exclusive line to a new region altogether. On Thursday, Le Labo launched Coriandre 39 as an exclusive to Mexico City, its first in Latin America.
Le Labo is just one of many luxury fragrance makers banking on Mexico’s growing appetite for fine fragrances. Fellow Estée Lauder property Kilian entered the country last year through the Palacio de Hierro department store, while British perfumer Creed opened a store in Mexico City’s upscale Polanco neighborhood in 2021. Fueguia, originally founded in Buenos Aires in 2010 with stores now throughout Asia and Europe, opened a store in the capital’s bustling Roma Norte in 2023. Just a few blocks away is Le Labo’s outpost in the neighborhood, which opened in 2020.
For perfumer and Mexico City native Rodrigo Flores-Roux, it’s a long overdue recognition of the country’s olfactive sensibilities. “Mexico is very, very perfume-hungry. We have a highly educated nose,” said Flores-Roux, vp of perfumery at fragrance manufacturer Givaudan. “It has to do with the biodiversity of the country. We are plant, tree and flower lovers. And of course, something that is very important for us in our culture is our culinary richness.”
It’s not merely outside companies turning their eyes to Mexico, but local brands and entrepreneurs are driving demand, as well. Xinú, the perfume brand founded in 2016 by Veronica Peña, Ignacio Cadena and Héctor Esrawe with scents created by Flores-Roux, expanded to a second store in the Mexican capital earlier this year in the trendy Juarez neighborhood. Last fall, fragrance collector Eduardo García de Alba Barroso realized his dream of creating a niche perfume store in Mexico City with the opening of My Scent Journey. Located in the Colonia Nápoles neighborhood, the store carries a diverse mix of global independent brands, like Jorum Studio of Scotland, Frassaï of Argentina and Eris Parfums from New York City.
Historically, Mexico has been a major consumer of beauty and fragrance, Flores-Roux said. When he became interested in fragrance in the 1980s, department stores were the main hubs for launches like Thierry Mugler Angel and Lancôme Trésor, while smaller perfume stores have lined Calle Tacuba in Mexico City’s historic center since the early 20th century. “We relish in olfaction. We relish in perfume. We have always had a culture,” he said.
But translating that culture into a contemporary market for today’s niche perfume world is still a work in progress.
In 2022, Eduardo García de Alba launched the first edition of MxScent, a niche fragrance expo modeled, in part, after the likes of Exsence in Milan, the annual trade show that brings together fragrance retailers, distributors and creators for educational and networking opportunities. But rather than take a B2B approach like Exsence, MxScent puts the focus on cultivating a consumer base by allowing brands to sell to consumers directly at the expo. “We are in a stage where we have to create culture about it. Talk about it, create curiosity about it,” he said.
García de Alba Barroso has been able to translate that curiosity into his brick-and-mortar store My Scent Journey. But one of the largest barriers for small retailers like his own are Mexico’s high customs fees, he said, which makes importing fragrances from abroad a costly endeavor. Those high fees have created a gray market for high-priced goods like electronics, wherein consumers buy products like cell phones through unofficial channels to avoid paying import fees. Rather than transferring those fees to the customer, García de Alba Barroso believes it is crucial to keep retail prices in line with the U.S. and Europe to encourage local buying.
“Unfortunately, Mexico is very near to the United States, so if you mark up your prices a lot, [consumers are] going to say, ‘OK, I have a cousin who lives in Texas. Give me a second. I’ll buy it there,’” he said. “I tell the brands, ‘I’m going to sacrifice margin. Do the same. We’re building a market.’”
For Lauren Leibrandt, director in Baird’s global consumer investment banking group, the recent growth in fragrance in Mexico is not necessarily unique to the region but reflective of global trends.
“Mexico is the second largest beauty market behind Brazil in Latin America,” she said. “It’s not surprising that it’s fragrance-focused, given how much the fragrance industry has been growing globally.”
Beauty powerhouse Ulta Beauty also announced expansion to Mexico this year, as Latin America has potential to grow across beauty. For the first fiscal quarter of 2024, Estée Lauder reported double-digit growth in Mexico and Brazil. Globally, fragrance offers particular room to grow, with regions like Asia emerging as key markets outside of traditional fragrance hotspots in Europe and the Middle East. French luxury perfumer Ex Nihilo opened a Hong Kong store last November, while Le Labo arrived in the Philippines earlier this year.
But Leibrandt cautions that moving into a new market too quickly can be more harmful than beneficial.
“You can’t just take the brand, take the product, and literally start selling it in a store in France or in the U.K. or in Asia. These are markets that are difficult to get to in the first place,” she said. “Brands today are focused, or should be focused, on growth, but profitable growth. If you look at the amount of investment it takes to get X million dollars of sales in an international market, it’s going to require an investment that is typically beyond whatever level of sales you’re generating, at least in the initial phases.”
While it may take time for more international fragrance brands to arrive in Mexico, culturally, the interest in perfume is brewing. Last summer marked the opening of the Museo del Perfume on Calle Tacuba, the same street that has been home to small perfume shops for nearly a century. The museum holds more than 4,000 perfume objects and traces the history of perfume from antiquity to Elsa Schiaparelli’s Shocking to today. “It is quite unique in the world,” said Flores-Roux, who consulted on the museum’s creation. “I’m very proud.”
Since opening My Scent Journey, García de Alba Barroso has welcomed visitors from throughout Mexico and across the globe. While the audience for niche perfume is still relatively small, he believes that once consumers catch the bug for fragrance, there’s no going back.
“One of the analogies that I always use is, Mexico right now is one of the main countries of craft beer. But twenty years ago, it didn’t exist,” he said. “It has to start somewhere. If you don’t push the first ball, it doesn’t roll.”
