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Perfumes in China: Scent of A Good Future

In 2019, perfumes in China generated nearly 10 billion RMB in revenues, accounting for just 2.5% of the global market. Nonetheless, in the last 3 years, China’s perfume market increased by more than 20% year-on-year and it is expected to grow further as Gen-Z consumers impose themselves as the main drivers of national consumption. According to a survey by iResearch, more than half of the interviewees declared using perfumes every day, mentioning work, school, parties, and weekend activities as the main occasions for wearing perfume. Specialty stores, friends as well as reviews on Xiaohongshu are considered the most reliable sources of information on perfumes in China. Floral, citrusy, and woody scents are the most beloved fragrances among Chinese consumers, while regarding bottle sizes, 50ml perfumes are undoubtedly the favorite ones in China since it is practical and easy to handle.

China perfume market: reasons for buying perfumes in China
Data source: iResearch, designed by Daxue Consulting, Reasons inducing interviewees to purchase their perfume in 2020

Gen-Z to reshape the market landscape of perfumes in China

According to Euromonitor, the demand for niche and high-end perfumes in China is bound to surge, leading to a considerable rise in imports. In order to avoid being unprepared, TMall Global, along with the logistic company Cainiao Network, ushered in a “perfume route” connecting European perfumers to China through dedicated daily air freight. In fact, despite the growing demand, international logistics rules and minimum requirements have so far hampered cross-border trade in fragrances, making it very complicated for niche brands to export their perfumes to China.

Gen-Z are willing to go beyond traditional scents

As novelty-lovers Gen-Z consumers start getting the habit of using perfumes in their everyday lives, their preference for more personalized and peculiar scents could throw foreign brands’ leading position into question. Chinese young consumers conceive perfumes as a tool to express their uniqueness, thus they look for fragrances with personality, neither too sweet nor too strong, and tend to prefer gender-neutral scents. That is the reason why fragrances such as “Rose of No Man’s Land” by Byredo and “Not A Perfume” by Juliette Has a Gun rank within TMall’s 2020 Top 10 Young People’s Favorite Imported Niche Perfume.

Local perfumers are surfing the Guochao wave in China

Perfumes in China did not remain untouched from young consumers’ tendency to prefer brands capable of drawing inspiration from China’s cultural heritage, and so far, homegrown perfumers proved to vaunt a competitive edge in leveraging local storytelling. Beyond adding Guochao elements in their packaging, Made-in-China brands started naming their fragrances after literary and artistic references, such as Wegoo’s Sweet Osmanthus Rain, whose name derives from a famous topos in ancient Chinese poetry. Even their scents draw inspiration from the local cultural background in an attempt to awaken childhood memories and establish a strong connection with the audience.

china perfume market: guochao-brand-young-beast
Source: Xiaohongshu, Guochao brand Young Beast is attempting to position as a mid-range alternative for Chinese young consumers

Xiaohongshu has a significant influence on young consumers’ purchasing decision

Online platforms are key channels for distributing and advertising fragrances, and social media are among Chinese young consumers’ favorite and most reliable sources of information. This is especially the case for Xiaohongshu: 60.8% of surveyed consumers mentioned it as their main channel for learning more about a perfume, while 43.5% declared trusting reviews on this platform. In 2020, “male Guochao scents”, “woody”, “citrusy”, and “fancy” were the most popular topics of the trending posts on the Shanghai-based social-commerce app.

Chinese consumers in higher- and lower-tier cities manifest different behaviors

Consumers in first- and new first-tier cities attach special importance to experience, thus perfumers need to create an immersive experience in order to stand out from the crowd. Instead, fragrance shoppers in second-and third-tier cities pay more attention to cost-effectiveness and prefer opting for reliable channels. Indeed, regardless of their age, consumers in lower-tier cities are willing to buy cheaper products which they perceive to have the same quality as expensive ones. Moreover, this category of shoppers prefers dealing with flesh-and-blood merchants or requires certificates of authenticity when it comes to purchasing a perfume.

Chanel’s perfumes in China

On the occasion of the 100th anniversary of the French Maison’s signature fragrance N°5, Chanel opened pop-up stores in 9 different cities (Paris, London, Monterrey, Chengdu, Taipei, Singapore, Hong Kong, Seoul, and Kyoto) recreating an ultra-modern style production site. Here, customers had the opportunity to undertake an immersive journey to the discovery of the limited-edition Factory 5 collection created by applying N°5 to everyday objects to show how the fragrance can give a twist to people’s lives. Moreover, Chanel ushered in a special exhibition at the Shanghai West Bund Art Center focusing on its most iconic perfume collections, such as Chance, Coco Mademoiselle, and Factory 5. Both marketing campaigns achieved more than 100 million views on Weibo and a significant number of interactions, demonstrating the wide reach and high engagement.

However, 2021 was not just a story of success for the French luxury brand, since its first advent calendar triggered sharp criticism from the Chinese audience due to the perceived low value for money of the content of the gift box.

Source: Chanel official website, Chanel’s 2021 Advent Calendar sparked outrage in China (and beyond)

The untapped potential of China’s perfume market

  • Despite vaunting a year-on-year rise of above 20% in the last 3 years, China’s perfume market still accounts for just a tiny fraction of the overall global market, leaving a tremendous room for further growth.
  • The rise of Gen-Z consumers as main drivers of national consumption is bound to disrupt the world of perfumes in China, bringing new trends and practices to the fore.
  • Nowadays, Chinese young consumers look for gender-neutral niche perfumes which can better help them to express their uniqueness and originality. Floral, citrusy, and woody scents are the most beloved fragrances among the Chinese audience.
  • The Guochao wave struck China’s perfume market as well, thereby creating a conducive environment for local brands and threatening big foreign names’ longstanding dominance in the sector.
  • Xiaohongshu imposed itself as one of the most used and most reliable channels when it comes to seek for perfume recommendations.
  • Whereas Chinese consumers in higher-tier cities value experience, those in lower-tier cities pay more attention to cost-effectiveness and pursue secure purchases.

On the occasion of the 100th anniversary of its iconic N°5 fragrance, Chanel launched several marketing initiatives in China in 2021, such as pop-up stores, limited-edition collections, and a special exhibition at the Shanghai West Bund Art Center. However, the advent calendar by the French Maison sparked an outcry on Chinese social media