Fragrance sales totalled $30.5bn (€20.85bn) in 2006 experiencing 6 per cent growth (in US$ with fixed exchange rate terms) according to the market research company.
Although premium fragrances make up more than half of the market, it is mass brands that account for much of the growth, writes Euromonitor senior analyst Diana Dodson.
In developed markets premium brands remain extremely important, however Dodson notes movement towards a younger demographic and discount strategies to attract the new consumer.
Mass brands popular in emerging markets A significant proportion of the 6 per cent growth in the fragrance market is due to economic prosperity in emerging markets where mass brands remain particularly popular, according to Dodson.
"Although there have been moves towards masstige and premium fragrances in Latin America, there is still a strong preference for mass brands right across the region; and they outsell premium fragrances in Eastern Europe too," said Dodson.
Younger consumer important in developed markets The developed markets are exploiting the teenage consumer and this strategy could also hold strong potential for the premium fragrances as this demographic has increasingly significant spending power.
One way in which manufacturers can target younger and therefore less affluent consumers is to launch smaller cheaper bottles of signature fragrances.
The strategy was employed by Elizabeth Arden which introduced a 30ml bottle of the Curious Britney fragrance.
Furthermore, Dodson highlights the increased sophistication of this demographic suggesting premium fragrances may be well received by the group.
The fashion house Valentino has attempted to capture the benefits of this market with their launch in 2006 of Rock 'n Rose that hopes to inspire a new generation of young Valentino women.
The launch was followed a year later by a second fragrance Rock 'n Rose Couture.
In addition, Burberry is launching The Beat, a fragrance designed to appeal to the younger consumer, of which license holder Inter Parfums has high hopes.