China comprises only a small fraction of the global perfumery business: Western perfumes weren’t introduced to the country until the 1980s, and only 26% of women in Beijing, Shanghai, Guangzhou, and Chengdu regularly wear fragrance. “The fragrance market in China is still very nascent. In 2020, fragrances only accounted for 2.5% of the global market category with approximately 20 million Chinese consumers, so there remains a lot more room for growth and brand offerings alongside evolving consumer tastes,” states Iris Chan, Partner in International Client Development at Digital Luxury Group, who cites women as the main target audience.
However, in light of recent developments, the fragrance market in China holds much promise and potential for the near future. Tmall Global introduced a direct flight route to enable easier logistics for European brands looking to expand into the market. The fragrance business grew 51% in 2020 and is estimated to reach 40 billion RMB by 2022, largely driven by digitally savvy Gen Z consumers. TMall Global reported a 70% annual increase in imported perfumes, with niche brands showing the highest growth rate.
Given the country’s strong economic rebound from the pandemic, its spending power is impressively healthy despite physical retail restrictions. According to Euromonitor, premium fragrances, as well as e-commerce (think WeChat,TMall Global, livestream shopping), build the foundation of the Chinese fragrance market. Gifting is another primary growth driver for category growth, especially in the premium to luxury category, states William Lau, VP Brands at USHOPAL. It is dominated by international megabrands like Chanel and Dior, although smaller fragrance houses including Byredo and Le Labo have also made an impact. Unisex fragrances such as Un Jardin Sur le Nil by Hermès, Silver Mountain Water by Creed, L’Eau Froide by Serge Lutens, and CK One by Calvin Klein proved the most popular over the last year. According to Euromonitor, in 2020, the mass brand category decreased by 15%, while niche artisanal and premium fragrances increased by 18%. “The Gen Z consumer is leading the way in developing a high level of organic awareness for niche fragrance brands. The younger generation grew up with their parents using masstige and designer brands, and today they are leapfrogging these traditional masstige brands directly into niche categories that they identify with,” Lau explains. This new wave of consumers is also more experimental, layering fragrances, as well as swaying from the signature scent model in favor of a fragrance wardrobe.
The Chinese consumer is typically described as enjoying more sheer fragrances, which explains the success of brands with lightweight products such as Jo Malone and Atelier Cologne, but new tastes are emerging. “While fruitier, fresher scents have traditionally dominated the market, today we are seeing consumers upgrading to more niche, more nuanced scents—especially younger Gen Z consumers looking for brands they can identify with both in terms of scent and brand values,” Lau adds. “Certain woody scents such as sandalwood are becoming more popular since it is a familiar scent to Chinese consumers who associate with expensive materials.”
An Ipsos study on the Sephora customer shows that the north and south regions of China have a bigger interest in fragrance, and in all regions except the East, customers prefer eau de toilette over eau de parfum formulations. “According to Chinese consulting agency iResearch, floral, citrus, woody and fruity fragrances are the top 4 flavors, representing 48.3%, 39.8%, 32.8%, and 30.4%, respectively. Nearly half (49%) of respondents say the flavor is the main reason they choose fragrance products,” states Franklin Chu, Managing Director US for Azoya International.
International conglomerates are looking to get in on the olfactory action. “The huge potential in the Chinese market has lured more and more world-class centers and flagship stores of our brands to the country. We will accelerate localization in the Chinese market, cultivate top local talent, tailor innovative products and services for Chinese consumers and strengthen our brand influence in the future,” Fan Jiayu, president of Estée Lauder Companies in China, commented on the expansion. The enterprise has not only introduced By Kilian and Editions de Parfums Frederic Malle nationally, but also launched a global innovation research and development center in Shanghai.
Other companies have used individual strategies to speak to this customer. Armani Prive created Pivoine Suzhou, an ode to the country’s peony flower and the gardens of Suzhou. Bvlgari, which counts Pour Homme and Rose Goldea as bestsellers in the Chinese market according to Chief Executive Officer Jean-Christophe Babin, tapped boy band member Jackson Yee as one of its fragrance ambassadors. Diptyque launched a limited-edition Shanghai candle.
Across the board, a strong digital strategy proves to be a key component of success, according to Chan. “However, word of mouth and peer-to-peer content online and offline from sources like Little Red Book (小红书) and friends’ referrals are also a key to the consumer experience for fragrances,” she adds. Price sensitivity remains an important factor, wth many consumers discovering online, testing offline, and then scouring the web for the lowest-priced option.
Customization is providing another access point. “Consumers today prefer personalized, intimate, and de-labeled products,” Franklin Chu states, with the exception of customers over the age of 30, who prefer mass-market products (as well as buying in-store). 2020 iResearch report shows that 45.7% of perfume consumers are moving from mass to niche designer fragrances. As the market grows, so does the desire for unusual product narratives and homegrown talent. “Commercial brands no longer satisfy them, that’s why they are looking for unique and niche products where Chinese brands could have an edge over foreign brands. Like the scent of boiled water from a metal kettle which evokes childhood memories sells very well,” proclaims co-founder of niche perfume boutique Galerie de Parfums Chen Peng.
Ambient fragrance has also seen considerable growth amidst more time indoors and self-care rituals via scent. “People have become more demanding about sensory experiences in their homes. Home fragrances that have a local imprint are the new trend” says Tianle Feng, CEO of Double Horse Fragrances & Flavors. “To be a successful home fragrance brand, you need a good visual identity, ingredients quality, and production expertise,” adds Momo Xie, founder of scent brand Aromag. “All three pillars are indispensable.”
It may not currently have the heft of other national scent markets, but given its incremental growth, and indicative increase in industry attention, the Chinese fragrance consumer is worth listening to all the more.
