Scents make big sense for perfume makers

Lifestyle changes after pandemic alter buying habits, help lift sector's market prospects

Thanks to consumption upgrades and improving living standards, China's perfume and fragrance market is embracing rapid development.

Yuan Tiantian, a 35-year-old fashion designer in Beijing, is a perfume enthusiast. In her house, there is a small refrigerator where she stores a collection of perfumes — around 20 bottles. In addition, she uses a variety of fragrances to enhance the aesthetics of her rooms — lavender-scented fragrance in the bedroom, rose scent in the bathroom, and ginger scent in the living room.

"I am a fan of perfumes. I spend nearly 6,000 yuan ($833.9) on perfumes and fragrances every year," Yuan said.

According to a report from market consultancy iiMedia Research, in 2021, China's perfume market totaled 13.6 billion yuan, up 24.8 percent on a year-on-year basis. In contrast, the country's cosmetics market overall grew 15 percent year-on-year. By 2025, China's perfume market is expected to grow to 30 billion yuan.

"From perfumes to fragrances, there are an increasing number of brands emerging in the market. Chinese consumers are using perfumes and fragrances in a variety of scenarios, contributing to surging demand," said the report.

The Guangdong province-based online research consultancy forecast that China's fragrance market will reach $5.3 billion by 2026, while Euromonitor International estimated that in the coming five years, the growth rate of China's perfume market will triple that of the world.

Data from Qichacha, a platform offering information on companies in the country, said that by May, there were over 180,000 enterprises that operate fragrance-related businesses. Newly registered enterprises in the field within one year were over 15,000.

While international cosmetics brands explored China's perfume market at an early stage, leading international companies — such as Italian outerwear brand Moncler and Spanish luxury leather brand Loewe — also wafted into China's perfume market in recent years.

In 2022, Moncler launched its perfume portfolio in Shanghai, and Loewe opened a fragrance store in Nanjing, Jiangsu province. Meanwhile, global fragrance company Firmenich opened its perfume experience center in Guangzhou, Guangdong province, and announced it would expand its presence in China.

The global capital market also favors the industry. Data from online business statistics provider itjuzi.com showed that between 2014 and 2022, 35 major investment deals were made in China's perfume market, with renowned investors including Sequoia China, IDG Capital and ZhenFund.