China’s Booming Perfume Market Offers Plenty of Room for Newcomers
The following is an excerpt from Jing Daily’s news report, “How Niche Fragrances are Winning Over Young Chinese Consumers”, available for download on our Reports page. This 25-page primer sheds light on China’s emerging niche fragrance market, one of the fastest growing premium categories with great untapped potential. Get your copy of the report here.
The Chinese market undoubtedly offers one of the most exciting opportunities for the global fragrance industry. According to local market research firm iResearch, only 2.5% of its massive population of 1.4 billion people use personal fragrance, meaning there is huge potential for growth. By comparison, nearly 52% of Americans (172 million) have used or purchased perfume or cologne, according to US Census data and the Simmons National Consumer Survey (NHCS). In France, where the use of perfumes is deeply rooted in culture, 42% use perfumes on a daily basis, while 42% use perfumes slightly less often, according to a 2017 survey.
For decades, the Chinese perfume market has been dominated by top-selling global names such as Chanel N°5 and Dior J’Adore. And while international luxury giants and beauty groups still account for the lion’s share of fragrance sales in China, changing consumer tastes in recent years have seen a greater willingness to experiment with lesser-known brands. foreign and domestic producers.
While low fragrance awareness in China has posed go-to-market challenges for brands looking to enter, it also means there is plenty of room for newcomers to gain a foothold and develop first-time customer bases. in the field of perfumes. Between 2017 and 2019, the personal care market was booming and fragrance was one of the fastest growing categories, according to consumer research firm Kantar Worldpanel. An online survey by Chinese market research firm iResearch noted that perfume ranked among the top fashion and beauty categories (excluding cosmetics and skincare) for Gen Z consumers, clothes and accessories.
The Chinese market has been hit hard in 2020 as a result of the coronavirus pandemic, with annual growth falling to just 1% from 11% in 2019, according to global market research firm Mintel. But China’s rapid rebound in the second half led to an economic recovery and increased consumer spending, offering the fragrance industry some hope for the near-term outlook.
Mintel forecasts the Chinese fragrance market to grow at an accelerated compound annual growth rate of 17% over the next five years, with sales more than doubling between 2020 and 2025 to RMB 6.9 billion. ($1.1 billion) to RMB 15.4 billion ($2.4 billion). Euromonitor International has valued the Chinese fragrance market at 10.9 billion yuan ($1.7 billion) in 2020, which represents around 5% of the global market, and forecasts sales to reach RMB 30 billion (4, $7 billion) by 2025.
Get your copy of “How Niche Perfumes are Winning Over Young Chinese Consumers” here.