CBE Trend Insights: Will China Continue to Buy Luxury Perfumes?

China Beauty Expo 2017 saw crowds flock to see its perfume exhibitors. Both local and international perfume brands enjoyed a sharp rise in interest. While consumer demand for fragrances seems to be on the upswing, consumer preferences are still polarized. Luxury brands and low-cost brands share the largest demand, while the price gap between affordable and luxury is often 10 to 20 times.

Luxury Brands Target Niche Market

China’s luxury perfume demand is concentrated in several niche segments. Examples of niche luxury brands in the market include Jo Malone of London, Diptyque, Creed, and Byredo. Their most popular products are 100 ml units priced between RMB 900 to RMB 1,000, and pushing RMB 1,200 at the high end of the market. Even with their price premiums, niche perfumes with a range of fragrances and gender-neutral characteristics enjoy strong demand. This demand has led leading luxury players to aggressively expand their product portfolios. For example, MCM launched its Infinite Collection in May with three fragrances, Incense, Orris, and White Tea. Spanish perfume brand, Puig, acquired two niche perfume brands, Penhaligon’s and L’Artisan Parfumeur. Similarly, Shiseido acquired Serge Lutens, and Estee Lauder acquired Edition de Parfume Frederic Malle and Le Labo.

Consumers Shift Their Attention to Perfume

China’s younger, middle-class consumers tastes are shifting from aspirational, high-end perfumes to affordable perfume. This large consumer segment is shopping for perfume products in brand stores and multi-brand cosmetics stores where they can select from a broad range of moderate prices. Affordable perfumes in this segment are tempting consumers with creative packaging, convenience, and variable sizes. Brand stores have responded to this demand with perfume products priced in the RMB 50 to RMB 120 range. New product lines include Green Tea from Innisfree, Eau de Love from Able C&C, and Perfume de Petite Etoile from Nature Republic.

As they introduce these low- and mid-market perfume brands, multi-brand stores such as Olive Young, Watsons, and Lohb also are launching their own products. Another example is Scent Library, an international brand with more than 350 perfume products that largely target the mid-market segment. Last year, Scent Library launched a cushion perfume priced in the RMB 60 range that was a hit because of its unique form and concept. Similarly, Olive Young’s Round A’Round brand launched its Life Fragrance collection to expand its fragrance product mix.

Personalization Beats Brand Recognition

A growing number of consumers also are seeking unique, craft perfume brands. In other cases, consumers have even begun creating their own perfume. Heizle, a producer of solid perfumes, often using natural ingredients for its fragrances. The company has reportedly introduced solid perfume products in lipstick-shaped containers for women and men.

China Beauty Expo Tracks Trendsetters

Through events like its Asia Trends Forum, China Beauty Expo leads the dialogue among Asian beauty industry trendsetters. In the perfume sector, Grasse – the French town that is the heart for the perfume industry – will join China Beauty Expo again in 2018, bringing with them latest in artisanship, brand innovation, and French style. Stay tuned for the latest details on the 23^rd edition of China Beauty Expo, May 22-24, 2018 in Shanghai.