Fragrances in China

PRE-COVID-19 PERFORMANCE

2019 smells of success as Millennials embrace premium fragrances

Consumers in China are paying ever increasing attention to personal grooming habits and are showing a growing willingness to invest not only in their appearance but also their smell, with this resulting in dynamic growth in fragrances towards the end of the review period. Furthermore, as incomes rise and brand awareness becomes more prominent consumers are showing a strong preference for well-known premium fragrances, with these products proving particularly popular among the post-90s generation.

Chanel opens official Tmall store in 2019 as e-commerce flourishes

E-commerce provided a significant boost to fragrances in China during the review period with the channel helping more brands to access the market while also expanding the distribution reach into more areas. Fragrances manufacturers have focused strongly on building their online sales, including those of luxury perfume brands.

International players invest in the category’s potential while local players launch interesting novelties

Well-known international companies dominate fragrances in China with strong investment in marketing helping to drive brand awareness and loyalty. Although Chanel retained the lead in 2019 it continued to lose share as other players made headway.

2020 AND BEYOND

COVID-19 impact

Sales of fragrances are now expected to decline by 2% in 2020 in 2019 constant value terms in light of the impact of COVID-19. This compares to an expected 21% rise forecast for 2020 during research conducted at the end of 2019 before the spread of COVID-19.

Affected products within fragrances

All areas of fragrances have been hit by COVID-19 as consumers do not typically wear fragrances for use around the home. With the restrictions impacting household incomes this will likely also have a negative influence on sales.

Recovery and opportunities

The impact of COVID-19 on sales of fragrances is expected to be relatively short-term with growth likely to resume once consumers are able to return to the workplace and begin socialising again. The leading brands are already upping their investment in fragrances in China due to the relatively low penetration of the category and huge potential consumer base.

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