Why More players are Entering Into the Perfume Market
- Chaileedo Press
- Oct 19, 2022
- 4 min read
Recently, a variety of players entering the perfume market has gradually manifested, such as the world's richest man Musk, Chinese star Qi Wei, and China's leading artist management company Yuehua Entertainment, as well as beauty giant L'Oreal have invested or entered the perfume brand.
Musk sells perfume, and sales broke $1.98 million in one day
Musk, the richest man in the world, has started selling perfume. Yes, it is the CEO of Tesla, Musk who is busy building rockets.
Recently, Musk released a perfume called "Burnt Hair" on Twitter. According to Chaileedo, the perfume is priced at $100 and has already sold more than 20,000 bottles. It seems not surprising either from Musk's style of action or the booming perfume market.
It is known that Musk had released a concept picture with the word "BURNT HAIR" in September to warm up for the release of this perfume, and on October 9, he released the product picture, again teasing that "(perfume) is coming".
CHAILEEDO found that the perfume is on the official website of Musk's Boring Company, and occupies the position of the front page. From this series of actions, it seems that this time Musk’s gloves are coming off again.
According to Musk’s Twitter, the perfume was launched less than 6 hours after the sales breakthrough of 10,000 bottles, and in less than 28 hours, the perfume sold 20,000 bottles. The estimated revenue of $2 million. The top tweet of Musk's official launch of the perfume has reached 94,000 likes and retweets have broken through 9,000.
Musk's Twitter account has 100 million followers and the sales of the perfume are a testament to his high popularity.
In addition, he tweeted that the perfume can be paid for with the virtual currency Dogecoins. However, it should be noted that the perfume is available for pre-order and will be officially shipped in the first quarter of 2023. So there are also voices worrying about whether it will be a "false alarm".
Celebrities pile in, and perfume continues to lead the way
The perfume market never lacks spoilers, and celebrity perfumes are an important type of perfume category. The unique personality and aesthetics of the celebrity combined with the perfume will often have a wonderful commercial effect, and consumers are also willing to pay for their own admired celebrity perfume.
The European and American perfume market is mature and has a strong commercial atmosphere, which provides a natural environment for celebrities to launch their personal perfumes. Such as the famous pop singer Ariana Grande, and Hollywood superstar Jennifer Lopez, etc. Who have all created their own perfume brand.
It is worth mentioning that the Chinese entertainment industry has also begun to enter the perfume market. In 2020, Chinese actress, Qi Wei's main brand SEVENCHIC was officially established, and the product positioning of the public beauty. It has involved a number of product lines such as fragrance pens, fragrance candles, hand care, body washing & care, beauty tools, etc. According to the new power brand activity data from TikTok China e-commerce in December 2021, SEVENCHIC’s GMV rose by more than 200% in the activity period, compared to the daily sales period. Just in February this year, China's leading artist management company Yuehua Entertainment invested in Qi Wei's fragrance brand SEVENCHIC, which is managed by Qi Wei.
In addition, the rise of the "olfactory economy" and the optimistic trend of the global perfume market are also important reasons for celebrities to invest in the perfume market.
According to Euromonitor data, the global perfume market will grow at a compound rate of about 7% in the next 5 years, and will reach 432.1 billion yuan ($59.81 billion) in 2025, with huge potential for the global perfume industry in the coming years. According to the third quarter earnings report just released by LVMH, its perfume and cosmetics segment's performance went up 12% in the first three quarters of 2022, from 4.668 billion euros to 5.577 billion euros ($5.49 billion).
The European and American markets have been a significant part of the global perfume market. According to Shelley E. Kohan, a contributor to the U.S. business magazine Forbes, globalization has led to a gradual expansion of the fragrance market, and North America and Europe have been the strong markets for the fragrance industry.
Based on beauty giant Coty's fourth-quarter earnings report for the fiscal year 2022, its premium fragrances continued to grow strongly in North America and Europe, up about 20% compared to last year.
A rapid growth period for the Chinese local fragrance market
On the contrary, some data predict that China is expected to become the second-largest fragrance market in the world by 2030. With this opportunity, international giants have introduced perfume brands to China, such as L'Oreal and Estee Lauder.
Noteworthy, China's local perfume and fragrance brands have also emerged, and since 2020, Chinese fragrance brands such as YFF-COSMETICS, PlusTwo, RECLASSIFIED, Scentooze, To Summer, Scent Library, DOCUMENTS, and FRAMULA have received financing. Among them, RECLASSIFIED completed 3 rounds of financing in 2021 alone, and Scentooze also completed 3 rounds of financing in 2 years. Chinese fragrance brands are entering an explosive period of financing.
Specifically, the Chinese high-end perfume fragrance brand DOCUMENTS has announced the completion of tens of millions of RMB A+ round of financing, which was jointly led by Cathay Capital's Consumer Co-Creation Fund and L'Oreal China's first investment company - Shanghai Meicifang Investment Co. (hereinafter referred to as "Meicifang").
The Chinese high-end perfume brand DOCUMENTS was born in 2021 with its original style "CHANKU", dedicated to the development of raw materials produced in China or from China, and the creation of fragrances through solid craftsmanship, with unforgettable fragrances for the young people of China and who loves history and culture worldwide.
Another perfume brand, To Summer, a niche original fragrance brand focusing on oriental botanicals, was founded in 2018, and its star product, Osmanthus, set a record for being snapped up in 3 seconds on the shelves. In March 2019, it quickly completed its Series A funding round, with investors including IDG Capital and Zhen Fund. For a long time, To Summer achieved annual sales of over 100 million yuan and a 60% repurchase rate only through the private DTC model + offline stores. According to GrowthBox, To Summer's annual sales in 2021 were about 143 million yuan ($19.81 million). Since 2022, it has accelerated its offline planning and has opened 5 independent stores offline by now.
With such a booming Chinese perfume market, in the future, there will be more new brands born and more players flocking to the perfume market.
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