Fragrances in China

PROSPECTS

Robust value growth for premium fragrances

Premium fragrances registered double-digit value growth in 2017, at the expense of mass fragrances, which saw value sales fall. With rising disposable incomes, more local consumers are in pursuit of quality products, particularly young consumers, who are an increasingly important force for upgraded consumption, showing a switch from mass to premium fragrances.

Niche brands are increasingly popular

Niche brands, catering to consumers’ pursuit of unique scents and individualistic personal style, are increasingly popular among local consumers. Jo Malone is one such brand that has been well received, with its value share growing explosively since its launch in China in 2014, ranking it third as of 2017.

Internet retailing and specialist beauty shops grow quickly

Supermarkets, hypermarkets and department stores are the major distribution channels for fragrances, as consumers still prefer to try the scent when purchasing for the first time. However, for repeat buyers of fragrances, internet retailing is also an important distribution channel, as official stores specialising in fragrances not only provide authentic products, but also provide home delivery, sometimes free of charge.

COMPETITIVE LANDSCAPE

Multinational players eye fragrances in China

On 3 July 2017, Chanel SA announced in its official WeChat account that the company had invited Chinese supermodel, Liu Wen, to be its brand and product ambassador globally. Compared with many Chinese ambassadors only covering China or Asia, Liu Wen’s endorsement of Chanel in the whole world showcases the company’s recognition of China as one of its strategic markets from a global perspective.

Top three players set a strong foothold in fragrances in China

The top three players, Chanel SA, Parfums Christian Dior and Coty Inc, consolidated their leadership of fragrances over the review period, with the top two focusing on premium fragrances and the number three player concentrating on mass fragrances. Consumers’ loyalty to these established brands has contributed to their leadership; however, their value sales growth was stagnant in 2017 in the face of increasingly fiercer competition from niche fragrances.

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