Fragrances in Hong Kong, China

PROSPECTS

Premium fragrances soar thanks to their symbolic value and suitability for gifting

Premium brands continued to record stronger growth over mass fragrances in 2018. In Hong Kong, where sales are mainly driven by Mainland tourists, the symbolic value of owning a piece of luxury at an affordable price point appeals to consumers.

Flavour notes and scents become more important to local consumers

Local consumers demonstrate comparatively low loyalty when purchasing fragrances. The wide range of products and availability, consumers’ curious nature to explore different fragrances and intensive competition between brands mean that buyers are always on the hunt for new fragrances to trial.

Wider offline and online distribution channels contribute to overall category growth

Until now, fragrances have been considered exclusive and are only sold via beauty specialist retailers and department stores in Hong Kong. However, recently, suppliers and manufacturers have extended their distribution presences in both offline and online channels.

COMPETITIVE LANDSCAPE

Leadership position of traditional designer houses is challenged

The British Perfumery Jo Malone is one of the major contributors towards the growth of global beauty leader Estée Lauder, especially in Hong Kong. The brand has flourished rapidly opening 10 beauty counters and stores during its 10-year anniversary in the country.

Customers attracted to wide collections and unique fragrances of fragrance specialists

Many customers are switching towards these beauty specialist retailers because of their wide range of collections and unique notes, threatening the leading position of traditional houses Chanel and Dior. At the overall brand level, the value sales of Jo Malone outperformed all other fragrance brands.

Slow moving performance of mass fragrances negatively affects category leader Body Shop

Growth of mass fragrances leaders Body Shop and Victoria Secret was restricted in 2018 by limited distribution and consumer reach. With the industry trend of customers moving towards more premium fragrances, competition and sales in mass fragrances became less active.

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