With around 2.5% of the global perfume market size, the Chinese perfume market is relatively small by far, but it foresees accelerated growth. As Chinese consumers are gradually educated about perfume and self-delighting consumption concepts, a growing demand has emerged in the perfume market. According to iiMedia, the retail sales of the Chinese perfume market was 13.6 billion yuan in 2021 and was expected to reach 30 billion yuan in 2025 with a compound annual growth rate (CAGR) of 22.5%. The CAGR is almost three times that of the global perfume market in the next five years (7%), implying the Chinese perfume market has great potential to become a driving force of the global perfume market's development.
There is still sufficient space for the Chinese perfume market to expand. The market penetration rate of perfume is only 5% in China which is far below western countries. Perfume was introduced to China until the 19th century, when it had already entered the stage of industrialization in western countries. At that time, China’s perfume industry developed slowly as Chinese consumers didn’t have a habit of wearing perfume. After the 21st century, with economic development, frequent cultural communication, upgraded consumption concepts, and the rise of female consciousness, the Chinese perfume market ushers in a new chapter of rapid growth.
In China, an upward trend can be observed in the perfume import value. According to the General Administration of Customs of the People's Republic of China (GACC), the perfume import value rose from USD 262 million in 2017 to USD 1,092 million in 2021 and is estimated to exceed USD 1,160 million in 2022. The significant growth indicates the ever-increasing demands in China's perfume market.
Based on the import value, Europe countries contribute over 90% of the perfume importation. In 2022, the top 5 sources are France, Italy, the UK, Spain, and the US respectively. The perfume import value from France is USD 508 million, accounting for over half of the total value, far ahead of that from Italy, the second country of origin.
Over the years, a distribution layout with diversified channels has been mapped out in China’s perfume market. The main distribution channels of perfume include department stores, E-commerce platforms, beauty collection stores, direct sales, and modern retail stores.
Department stores have been the most significant channel, accounting for over 50% of the total market share in 2020. As the smell of perfume is invisible, it can only be experienced in person, making offline channels, especially department stores, essential for customers to try different perfumes. In addition, offline stores are effective approaches to showing brand images through store decoration, display, as well as beauty assistant service. Therefore, many high-end perfume and fragrance brands made their debut in China by opening boutique stores in the most prosperous commercial districts and department stores.
On the other hand, the market share of online channels has grown year by year as booming E-commerce and live-streaming drive the online consumption of perfume. Online platforms provide consumers with convenience, discounts and user feedback on different perfumes.