Unpredictable 2023, Perfume Market Climbs

"In the next five years, we believe that the Chinese perfume market will play an important role in the global market," said Wang Wei, COO of Eternal Group.

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Recently, CHAILEEDO noticed that the 2022 White Paper on Perfume Industry Research in China, jointly prepared by Eternal and Kantar China, combined with the latest industry data and consumer research, was officially released.

In addition, at this press conference, many people in the beauty industry brought the latest insight into the perfume industry.

Chinese consumers' preference for fragrances

In this White Paper, Kantar China conducted a study on existing consumers aged between 18 and 45, from Tier 1 to Tier 3 cities, who purchase fragrances on their own and use them for at least one year between 2021 and 2022, to discover the psychological and behavioral changes of Chinese consumers when purchasing fragrances.

First, the multiple uncertainties of the future have seriously affected perfume consumers' consumption expectations, with 70% of consumers saying the epidemic has made them more rational in their daily consumption, with women in particular standing out.

Over 80% of consumers are becoming more concerned about their mental health. In addition, consumers are more willing to pay for a better consumer experience and higher quality goods and services. Consumers also continue to pay more attention to environmental protection and high attention is paid to concepts such as "green", "organic", "pure" and "natural".

Secondly, the maturity of Chinese perfume consumers has increased, and more consumers are pursuing "taste and style" and "individual taste" rather than "following the crowd". The research found that Chinese perfume consumers love floral, fruity and woody notes, with women preferring floral notes and men preferring woody notes. At the same time, most consumers still use perfume for emotional reasons, showing personal style taste is also an important driving force.

Thirdly, affected by the epidemic, most perfume consumers pay more attention to the quality and safety of the products, especially the safety and greenness of the fragrance ingredients, including whether the fragrances contained in the products are natural and whether there are allergy-prone raw materials.

In addition, most consumers still learn about perfume information through offline retail channels, of which brand counters are the main channel, followed by beauty category integrated brand chain stores and perfume multi-brand integrated experience stores.

It is worth mentioning that Chinese consumers are more willing to give fragrances as gifts. When it comes to gift-giving, consumers pay more attention to the quality of perfume, emotional value and ritualistic and beautiful packaging.

High-end fragrances are the main growth

According to the White Paper, the China fragrance market will continue to grow rapidly in 2022 despite the impact of the epidemic.

Over the years, the Chinese fragrance market has been growing faster than the global average, and in 2020, despite the negative growth in the global and Asia Pacific regions due to the global epidemic, the Chinese fragrance market still achieved a growth rate of 10.6%, and in 2021, the growth rate was 38.7%.

Despite the impact of the epidemic, the annual retail sales growth of China fragrance market in 2022 showed signs of slowdown, but still significantly higher than the global market.

"In the next five years, we believe the Chinese perfume market will occupy a pivotal position in the global market." Wang Wei, Chief Operating Officer of Eternal Group, said at the launch event. About "high-end perfume". From the perspective of the perfume industry landscape, high-end perfumes are the main force behind the growth of the Chinese perfume market, while international brands are still the mainstream of the market and local brands are still waiting to grow.

According to Euromonitor, the Chinese perfume market is mainly driven by high-end perfumes, and the sales share of the high-end perfume market is increasing year by year, with the highest growth rate in the past five years in 2021.

In addition, international top brands such as Dior and Chanel are still the mainstream brands in the perfume market. Other famous international brands, such as Yves Saint Laurent and TOM FORD, are growing rapidly in the Chinese market.

In the face of international brands seizing the perfume market in China, DOMENTS, TOSUMMER and other local brands are also making use of the unique advantages of local enterprises to create perfume products with Chinese traditional cultural characteristics and occupy a place in the domestic market.

"Reasons" for Believing in perfume Market in 2023

Saying goodbye to the change-filled 2022, the China fragrance market in 2023 will take on a new look and welcome a new round of growth, and the reason for believing in the growing China fragrance market comes from the fact that the fragrance market still has huge growth potential in China as the second largest cosmetics consumer market in the world.

In terms of market penetration, at present, the Chinese perfume market has a low penetration rate. The Boston Consulting Group pointed out in its latest report in 2022 that the penetration rate of the Chinese perfume market is about 5%, while the ratio in Europe and the United States is 42% and 50% respectively, a huge difference, which shows that the Chinese market can be improved significantly.

In terms of growth rate and market size, the Chinese perfume market is still promising. In 2021, the overall retail sales of the Chinese perfume market accounted for only 4.1% of the world perfume market, but led the global perfume market with a CAGR of 21.4% in the past five years (2016-2021), which is about ten times of the world market.

The overall China market is expected to reach RMB 37.13 billion in sales by 2026. The China fragrance market is expected to maintain a CAGR of around 22.3% over the next five years, which is approximately three times the growth rate of the overall world fragrance market.