Fragrances in Hong Kong, China

PRE-COVID-19 PERFORMANCE

Fragrances is among the categories worst affected by political unrest in 2019

Fragrances was one of the areas of the beauty and personal care market hardest hit by the anti-government protests that swept Hong Kong in 2019. This was mainly because the political unrest caused a collapse in the number of visitors from mainland China, who traditionally represent a core consumer group and often travel to the city specifically to buy premium fragrance brands and sets/kits as gifts.

2019 sees more luxury brands open local stores and launch floral variants

Despite widespread political unrest, the number of luxury fragrance specialists opening branded stores in Hong Kong continued to rise in 2019. For example, French fragrance house Goutal opened its first local outlet in the Fashion Walk shopping mall in Causeway Bay.

New launches in 2019 help Estée Lauder to consolidate its lead

Estée Lauder remained the leading company in fragrances in 2019. It was also one of the most active players in terms of new product development during the year, which helped to ensure its overall value share continued to rise at a healthy pace despite difficult trading conditions.

2020 AND BEYOND

COVID-19 impact

Fragrances value sales at constant 2019 prices are now expected to decline by 8% in 2020 in light of the impact of COVID-19. This compares to an expected increase of 9% forecast for 2020 during research conducted at the end of 2019, before the spread of COVID-19.

Affected products within fragrances

All fragrances categories are expected to post negative results in volume and current value terms in 2020. Premium women’s and premium men’s fragrances look set to record the steepest declines, as they are most exposed to the collapse in visitor numbers from mainland China and increased budget-consciousness among both tourists and local consumers.

Recovery and opportunities

The outlook for fragrances over the forecast period as a whole is reasonably bright. As the initial economic shock of COVID-19 subsides and consumers adjust to the post-pandemic world, most categories are expected to see volume sales recover strongly in 2021 and then grow steadily towards 2024.

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