Seamus Hammond
China's perfume market has experienced explosive growth in recent years, with retail sales doubling between 2018 and 2023. This surge in demand is largely due to a cultural shift in how Chinese people perceive perfume. Historically, wearing perfume in public was frowned upon as it could be considered disrespectful or harmful to others, but today, perfume is seen as a tool for self-expression and emotional comfort, especially among younger generations. As the market expands, local and foreign brands compete to meet demand and win over consumers with their unique offerings. With Chinese companies swiftly catching up to their foreign-funded competitors, this article will explore whether perfumes are becoming more affordable in China and the factors influencing the market dynamics.
| Characteristics | Values |
|---|---|
| Social stigma around perfumes | Disappearing |
| Perception of perfumes | Self-expression and emotional comfort |
| Demand for perfumes | Increasing |
| Demand drivers | Gen Z and Millennials |
| Local companies | Lack access to top-quality raw materials |
| Local companies | Lack experienced flavorists |
| Foreign-funded firms | Account for 86% of total retail sales |
| Chinese companies | Account for 14% of total retail sales |
| China's share of the global premium perfume market | 13% in 2020 |
| China's predicted position in the global perfume market by 2030 | 2nd largest |
| Popular perfume bottle size | 50ml |
| Popular aromas | Floral, lemony, woody |
| Popular brands | To Summer, Le Labo, Diptyque, Maison Francis Kurkdjian |
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What You'll Learn
The Chinese perfume market is growing
China's perfume market is experiencing rapid growth, with retail sales of perfumes doubling between 2018 and 2023. This growth is driven by a shift in cultural perception, with younger generations, in particular, viewing perfume as essential for enhancing their mood and expressing themselves. The perfume market in China is projected to grow by 3.29% between 2024 and 2029, resulting in a market volume of US$1.54 billion in 2029.
The growing disposable income among younger Chinese consumers has led to an increased willingness to spend money on luxury items like perfumes and home fragrances. This trend is further fuelled by the emergence of male-oriented brands in the Chinese perfume market, such as Hugo Boss, and marketing campaigns targeting men on social media platforms like Weibo.
International luxury brands are investing in the Chinese market, recognizing its potential for growth. However, understanding consumer preferences and navigating cultural barriers are crucial for brands aiming to succeed in China. Local tastes and traditional perfume elements, such as bamboo, plum flower, and sweet Osmanthus, are essential considerations for brands aiming to connect with Chinese consumers.
The digital marketplace has played a significant role in the growth of the Chinese perfume market, with companies like Alibaba Group's Tmall identifying fragrances as a high-priority growth category. Tmall has invited more perfume brands to join its platform, offering consumers a wider range of choices. The Boston Consulting Group predicts that China will become the second-largest luxury perfume market in the world by 2025, surpassing countries like Europe and the United States in terms of market share.
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Chinese consumers are increasingly buying perfumes
The rise in disposable income among younger generations has made them more willing to spend money on luxury items like perfumes. Additionally, the integration of fragrances into consumers' daily routines has increased the per capita fragrance usage in China. The shift in the perception of perfume from merely a means to mask body odor to a way to enhance one's mood and express oneself has also contributed to the growing demand for fragrances in China.
Chinese consumers are buying niche brands, unisex fragrances, and local scents. They are attracted to perfumes that evoke cultural heritage and incorporate traditional aesthetics in their packaging. Chinese millennials value the importance of fragrance in their lives, and this has contributed to the booming home fragrance market in China.
Digital marketing plays a crucial role in the Chinese perfume market. Social media and e-commerce platforms like WeChat, Weibo, Xiaohongshu/RED, Douyin, and e-commerce platforms like Tmall, Jingdong, Pinduoduo, and Kaola are essential for promoting fragrance brands and driving sales.
To capture the Chinese market, brands must meet consumers' needs and understand that the perception of a scent can vary across different cultures. While Chinese consumers show a preference for "lighter" scents, they have also shown interest in perfumes that may be perceived as sexy in the West, such as Yves Saint Laurent's Black Opium.
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Local perfume brands are more affordable
China has witnessed explosive growth in its fragrance market, with retail sales of perfume doubling between 2018 and 2023. This surge can be attributed to a cultural shift in how Chinese people perceive perfume. While it was once viewed as a means to mask body odour, it has now become essential for many, especially the younger generations, as a form of self-expression and mood enhancement. This shift has led to a growing demand for fragrances, intensifying competition among brands.
Local Chinese perfume brands are becoming increasingly successful and affordable. For instance, brands like Chunfengshili (春风十里) offer poetic and artistic fragrances at low prices, with fragrance names referencing ancient poetry and marketing that mimics classical literati culture. Scent Library (气味图书馆) is another affordable brand that taps into collective memory and online buzz by offering unconventional scents like marshmallow, blueberries, and even cannabis, along with nostalgic cues like White Rabbit candy. These brands are democratizing Chinese identity in perfumery, making it accessible while still emotionally rich.
In addition to affordable options, there are also luxury Chinese perfume brands that are gaining popularity. To Summer (观夏), Uttori (五朵里), and Barrio (巴莉奥) are examples of top-tier brands that embrace strong cultural uniqueness, incorporating Chinese symbols and storytelling into their brand identities. To Summer, in particular, has become a "must-visit" destination in Shanghai, offering an immersive flagship experience that blends art and retail while incorporating ingredients like osmanthus, lotus, and bamboo.
The emergence of local innovation in the Chinese perfume market has been a recent development, as the market was historically dominated by foreign luxury houses such as Chanel, Dior, and Jo Malone. Chinese brands are now moving away from imitating Western luxury and are instead building their own distinct local identities. This shift is evident in the growing popularity of culturally-inspired affordable brands and the emergence of luxury brands that celebrate Chinese cultural uniqueness.
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Foreign brands face logistics issues
China's perfume market has experienced explosive growth in recent years, with retail sales doubling between 2018 and 2023. This surge in demand has been driven by a cultural shift in how Chinese consumers, particularly Gen Z and millennials, perceive perfume. While it was historically stereotyped as a means to mask body odour, it has now become essential for many as a form of self-expression and mood enhancement. This shift has presented huge opportunities for global brands, with the market expected to reach a revenue of US$1.26 billion in 2023 and a projected annual growth rate of 3.58% from 2023 to 2028. Mintel forecasts an even higher compound annual growth rate (CAGR) of 17% over the next five years, with market sales expected to reach RMB 15.44 billion (US$2.13 billion) by 2025.
However, foreign brands face several challenges in navigating this rapidly expanding market. One significant issue is the need to understand the emotions and cultural resonance of Chinese customers. How consumers respond to a scent is deeply rooted in their cultural experiences, and the same fragrance can evoke different reactions in different countries. For example, while tuberose is often associated with "sexy" perfumes in the West, it is considered a "clean" scent in China due to its use in soaps. Foreign brands must, therefore, be cautious in their sales strategies and sensitive to the impact on their brand value. Missteps, such as Chanel's advent calendar perceived as low value for money, can draw harsh criticism from Chinese consumers.
Another challenge for foreign brands is the logistics of entering the Chinese market. To address this issue, Tmall Global, in collaboration with the logistics business Cainiao Network, launched a 'perfume route' in December 2020. This dedicated daily air freight service connects European perfumers to China, facilitating the cross-border trade of fragrances. However, international logistics restrictions and minimum criteria still impede the entry of niche manufacturers into the Chinese market. Foreign brands can overcome this hurdle by partnering with Chinese distributors to gain access to physical retail outlets and leveraging online channels, as up to 70% of Chinese urban consumers have purchased perfumes online.
Social media and e-commerce platforms are essential tools for promoting fragrance brands in China. Platforms like WeChat, Weibo, Xiaohongshu/RED, and Douyin play a significant role in reaching Chinese consumers. Additionally, e-commerce platforms like Tmall, Jingdong, Pinduoduo, and Kaola are crucial sales channels. Foreign brands can also benefit from innovative marketing strategies that leverage Chinese culture and nostalgia, as well as from partnering with key opinion leaders (KOLs) on social media platforms like Xiaohongshu to bridge cultural gaps.
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Chinese consumers are influenced by social media and celebrities
The Chinese fragrance market has experienced explosive growth over the past few years, with retail sales of perfume doubling between 2018 and 2023. This surge in demand for fragrances has been driven by a cultural shift in how Chinese people perceive perfume. Historically, there was a stereotype that perfume was used merely to mask body odour. Now, it has become essential for many, especially the younger generations, as a way to enhance their mood and express themselves.
Chinese consumers, particularly Gen Z, are heavily influenced by social media and celebrities when it comes to their purchasing decisions. This is evident in the rise of the wanghong economy, which refers to the Chinese digital economy based on influencer marketing through social media platforms. Wanghong, or internet celebrities, attract a significant number of followers and have a profound impact on their purchasing behaviour. They are perceived as more authentic and relatable compared to traditional celebrities, and their endorsements can carry a lot of weight with their audience.
The use of social media advertising strategies, including celebrity endorsers and micro-celebrity influencers, is a prevalent marketing tool in China. Gen Z consumers tend to be highly involved in the lives of these endorsers and influencers, and they rely on their professional knowledge and expertise when it comes to product recommendations. Visual evidence of the effectiveness of a product, such as physical attractiveness, is also an important factor for Chinese consumers.
In addition to traditional celebrity endorsers, there is a growing trend of using virtual influencers to promote products, especially in the beauty industry. Virtual influencers are animated characters that endorse products through social media posts and advertisements. This strategy has been effective in attracting young consumers who are fans of anime, comics, and game content.
To navigate cultural barriers and bridge the gap with local consumers, global fragrance companies may benefit from partnering with key opinion leaders (KOLs) on popular social media platforms in China, such as Xiaohongshu. By understanding the cultural values and consumption habits of Chinese consumers, companies can create effective marketing strategies that resonate with this influential market.
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Frequently asked questions
Local Chinese perfume brands are often more affordable than luxury foreign brands. However, it is unclear whether perfumes in China are generally cheaper than in other countries.
Local perfume brands in China are often able to propose cheaper alternatives because they are knowledgeable about trends in China and how to approach their audience.
Foreign-funded perfume firms continue to lead the Chinese market, accounting for an estimated 86% of total retail sales. However, demand for niche and high-end fragrances in China is expected to expand, resulting in a significant increase in imports.
The Chinese perfume market has experienced explosive growth in recent years. This surge in demand was largely driven by a cultural shift in how Chinese people perceive perfume. Historically, wearing perfume in public was considered disrespectful. But today, it has become essential for many, especially Generation Z and Millennials, to enhance their mood and express themselves.
Floral, lemony, and woody aromas are the most popular among Chinese customers. Smaller perfume bottles, such as those containing 50ml of perfume, are also preferred as they are practical and can be easily carried around.
