China’s fragrance market is expected to reach $3.1 billion by 2025, up from $2 billion in 2022, according to data from research firm Euromonitor. Estimates are that the unsaturated market has a penetration rate of 5-10% and is expected to become a significant player in the future. Expansion of the global perfume industry. This is a surprising bright spot amid economic headwinds. China’s niche domestic fragrance brands are proving themselves to be disruptors and lucrative opportunities as the sector evolves.
The minority stake investment in 2023’s last-minute newcomer Melt Season is a smart move by New Incubation Ventures (NIV), the early-stage investment arm of US beauty giant Estée Lauder Companies (ELC). Ta. Melt Season is one of his chic domestic brands that was founded in 2021 and is attracting investment. Other titles include Sequoia Capital’s To Summer and L’Oréal’s Documents. Sevenchic and Timingbox also secured funding. In 2021, Puig acquired a stake in Saint Library, an original disruptor founded in 2009 (and an outlier among other companies that have only come along in the last few years).
changed market
Chinese consumer brand investor (and advisor) Louis Udall said in an interview that China’s consumer market is more complex today than it was two years ago, when foreign investment was easier. He said that it has become. Without “massive capital inflows,” valuations should become more reasonable, which in turn should create long-term strategic investment opportunities. “Once the consumer market starts to recover by the end of the year, investment should resume as many funds are still flush with cash and looking for good opportunities,” he suggested.
While digital channels remain the main source of visibility, Houdart advises to expect continued quality offline retail. “This will continue to be a big trend, with brands (and consumers) seeking unique experiences in interesting environments, putting pressure on traditional shopping malls.” In China, Shanghai, Chengdu, Beijing, It is well known that perfumes have recently opened in cities such as Hangzhou. “Documents,” “To Summer,” and “Melt Season” all enhance the traditional brick-and-mortar approach, and St. Library operates 80 experiential stores nationwide.
national prestige
According to a November 2023 report from marketing agency Daxue Consulting, domestic fragrance brands are aggressively targeting China’s younger consumer base and riding the wave of rising cultural trust in ways that global companies cannot. It is said that there is.Local perfumers take advantage of this nationalist Guchao Effie Chen, business development lead at brand incubator Yaso, explains the trend by “leveraging local storytelling.” “Their scents are inspired by local cultural backgrounds, evoking childhood memories and establishing a strong connection with consumers.” Unlike other beauty product posts on Xiaohongshu , content about fragrances tends to be “lengthy, with many stories about origins and founders.”
Local know-how
Young and nimble, these niche perfumers are well placed to capitalize on the current cultural moment. Houdart points out that these products are very “sensitive” to the latest trends in China, which could be repackaged as products. A recent example is the fascination with nature that has emerged during the pandemic. “Consumers are very keen to find elements of Chinese culture, from location to scent. Now it’s all about natural forests, trees, parks and shelters,” he says.
Paris-based perfumer Alex Li, who has worked with international luxury brands as well as niche Chinese brands such as Project Element, agrees. “Current trends are increasingly seeking scents that are linked to nature and aromatherapy.” According to the Chinese Perfume Industry Research White Paper 3.0, published last year, by 2022 the use of various aromatherapy categories will increase. has increased significantly. “This means that citrus and woody scents (cedar, sandalwood, vetiver, smoky notes) will continue to be in vogue, but we can expect more aromatic notes” such as pine, cypress and mint. ”
follow me twitter Or LinkedIn.