Not long after Qixi Festival, Chinese Valentine’s Day, Tmall Global released a Young People’s Favorite Imported Niche Perfume List which claimed that “In Qixi, Valentine’s Day or Daily life, imported niche perfumes are becoming more and more popular among the younger generation.” [1]
The perfume list released by Tmall Global
Is it true? Will niche perfumes become another popular product in China?
The answer is “very likely”.
According to Qianzhan Industry Research, China’s perfume consumption is expected to increase with a 15% CAGR from 2018 to 2024. And the market size is also expected to exceed 40 billion yuan in 2022. [2]
This year’s 618 data also proves the popularity of this category. Perfume sales on JD and Tmall increased by 189% YoY and 97% respectively. [3]
The number of imported perfume brands has also ramped up. As of June 30, 416 imported perfume brands have been filed, and the number exceeded that of the whole year of 2019. [4]
Among all perfume brands, niche perfume brands’ market performance was better.
Euromonitor, a global market consulting company, has predicted that the commercial perfume market would fall by 15% by 2020, while the niche perfume and high-end perfume market would grow by 18%. [1]
Data from Tmall Global also has supported this prediction: in the past half-year, Tmall Global’s imported perfumes have increased by 70% year-on-year. Among them, niche perfumes have the highest growth rate, with a three-digit growth year-on-year. [1]
ROSE OF NO MAN’S LAND
Who and why behind the rise of niche perfumes?
The young consumer generation is the group that has contributed to this rise of niche perfumes in recent times.
According to “Perfume Category Trend Report 2018” released by Tmall, “being different from others” has become the main demand of this new generation of consumers. The percentage of post-95s perfume consumers exceeds that of post-85s and post-90s. [5]
Most post-95s and post-00s live in the era of abundance of materials, rich resources, and numerous brands. They have witnessed the most surprising marketing campaigns, the most social media interactions, and the most popular brands.
Unlike the post-70 and post-80 generations, this group of post-95s rarely choose to follow the trend, nor are willing to be educated on "What are luxury brands?”. They are more inclined to take the initiative to try different products and then form their own judgments. This group of young people who are most willing to try new things became the first ones to support niche salon fragrances.
PASSAGE D’ENFER
Overseas brands VS Domestic brands
Over the past year, overseas niche perfume brands have accelerated their entry into the Chinese market with large cosmetics companies joining Tmall Global to develop niche perfume brands. Pan Hailigen, a Spanish Beauty Group Puig brand, enter Tmall Global in October 2019 and since then has become TOP performing brand within one year from opening. Maison Margiela, from L'Oreal Group and L'Artisan Parfumeur, a French fragrance brand, have also entered Tmall Global this year despite the ongoing Covid-19 pandemic.
Since consumers need to smell the scent to decide on whether to purchase it or not, many brands are actively setting up their offline stores. KILIAN and Editions de Parfums Frédéric Malle, two niche brands from Estee Lauder Group, opened their first stores in China this year. Besides these two offline stores opened last year, another three stores from BYREDO were opened in China in May to July in 2020. Even a global pandemic does not seem to stop perfume brands' development pace in China market.
Although overseas brands still dominate the China perfume market, domestic brands are catching up. Local brands have shared a 3% share in brand searches in the perfume industry. At present, the top three searches for local perfumes are Scent Library, Boitown, and Fozoon. Among them, Boitown has a rapid growth rate of 96%. [6]
Facing severe competition from overseas counterparts, some domestic brands select a unique way to enter the contest. They have gained much traction by making products with traditional Chinese scents, like the scent of boiling water and wintersweet flowers.
China has a long history of using different fragrance, but these traditional fragrances are almost absent in modern perfumes. “Chinese scent” is clearly a chance for local brands. Chinese consumers are generally unfamiliar with common perfume scents, such as sage, rosemary, and cinnamon, which are typical for western consumers. Thus, Chinese consumers can’t get an emotional bond with products that have those scents. While the primary factor driving the purchasing of perfumes is that the product smells good that alone is not enough. Scent Library developed a product that feels like the scent of boiling water in an aluminum pot, which was a common thing in Chinese families in the past. For many young people in China, it is the scent of childhood. This series of products sold out with about 1 million bottles in 2018.
La Fille de Berlin
Support from E-commerce platforms
This category’s great potential also has promoted e-commerce platforms to support niche perfume brands’ development in China.
Next year, Tmall Global plans to nurture ten niche imported perfume brands with annual sales exceeding 10 million yuan. [1]
Kaola, another Cross-Border E-Commerce platform, claims that the perfume segment will be one of their main focuses. Besides introducing more niche perfume brands to China, it will cooperate with high-end perfume brands to launch VIP customized scent gift boxes and promote its online perfume-trial services.
It seems like the competition has only just begun now for the niche perfume market.
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