According to the content of "Ipsos Global Insight China", China is shifting from high-speed growth to high-quality growth, which requires seeking a new growth model and development model while maintaining economic stability, similar to climbing up at a 45% angle. This also indicates that the market is gradually showing new growth potential and consumption trends, and a more diversified and rational consumption era is coming.
In such an economic situation, where are the new opportunities for China's perfume and fragrance market?
On September 4, Yingtong Group officially released the "2024 China Perfume and Fragrance Industry White Paper". This is the fifth consecutive year since 2020 that Yingtong Group has successfully released the "China Perfume Industry Research White Paper", which extends the research object from perfume to fragrance, and shares the insights and prospects for the future trend of China's perfume industry with the industry through the interpretation of the overall market performance, changes in consumer demand, and the opportunities and challenges faced by brands in the market, providing important reference value for the development of the domestic perfume industry.
01
The growth rate of the perfume and fragrance market in the Chinese market is optimistic
Capital is the signal indicator of industry trends and wind directions. In the first half of 2024, the performance of the fragrance business of major groups in China grew against the trend, and the sales of L'Oréal Group's luxury cosmetics division outperformed the market, among which perfume became the most dynamic category; LVMH's Perfumery & Cosmetics division grew organically by 6 percent. In addition, the capital market continues to be optimistic about the investment environment of China's perfume and fragrance market, and the number of perfume brand filings in the Chinese market will increase by 49% in 2023, which proves the good prospects of the perfume track.
According to Frost & Sullivan statistics, the retail market size of China's perfume category has grown from 11.4 billion yuan in 2018 to 22.9 billion yuan in 2023, with a compound annual growth rate of 15.0%, leading the world, and is expected to reach 44 billion yuan in 2028, and the compound annual growth rate is expected to reach 14.0% during 2023-2028, and the market growth rate in the next five years is still optimistic.
● Lin Jing, CEO of Yingtong Group
At the same time, the per capita perfume expenditure of Chinese in 2023 will only be 16 yuan, while the United States, United Kingdom, Korea and Japan will be 423 yuan, 406 yuan, 170 yuan and 47 yuan respectively, and the per capita expenditure of Chinese is far lower than the market level of developed countries, and the growth space of perfume consumption in the future is huge.
This series of data fully shows that China's perfume and fragrance market is still in a stage of rapid development from a macro perspective, and the growth potential is huge. Jing Lin, CEO of Yingtong Group, concluded: "China's market growth model, consumer enthusiasm for the fragrance category and per capita consumption expenditure give us every confidence that China's fragrance market is in a high degree of structural growth and has great potential for future growth. ”
02
"Both want and want", consumers explore both inward and outward
The white paper concludes that 2023 is a critical year in the post-epidemic era, and people are gradually perceiving positive signals of market recovery, consumers are more cautious and rational, more prudent and shrewd in consumption decisions, and at the same time have the pursuit of quality and refinement.
The head of the new insight business department of Ipsos (China) introduced the changing trend of Chinese consumers, "Chinese consumers have reduced impulsive consumption, which not only requires products to be practical and functional, but also to meet their own pursuit of quality and experience, and also hopes to have a certain advantage in price to achieve the consumption demand of 'both wants and wants'. ”
● Head of New Insight Business Unit of Ipsos (China).
Under the new concept, consumers' demand for perfume is still evolving, and they have begun to shift from the spiritual self-satisfaction of "seeking inward" to seeking a balance between internal and external cultivation. On the basis of their desire to gain social recognition, they re-examine their self-exploration and real needs, and pay more attention to the internal immediate feedback and external manifestation output brought by emotional value.
Moreover, with the vigorous rise of the healing economy, the healing scene combining perfume and culture is also expanding. According to a report by the Global Health Institute, by 2025, the global healing economy market will reach 7 trillion US dollars, and the Chinese market will reach 10.4 billion. As an important carrier of the five senses healing, perfume not only expresses smell, but also connects identity and emotion. With the rise of lifestyles such as Citywalk and Travel Retreat, perfume and culture have been further integrated to create a unique multi-sensory experience that showcases the cultural and emotional depth of the Chinese perfume market.
Lin Jing pointed out that with the development of the overall market economy, "we have every reason to believe that the healing economy has become a force to be reckoned with in the consumer market." In addition, with the rise of the healing economy, the healing scene of perfume is also expanding, giving birth to new growth opportunities for the market. ”
03
Multi-field penetration, cross-field experience breakthrough
From the perspective of the growth trend of online and offline market share, offline will account for 72% in 2023, which is still the absolute main venue for consumption, while the business of online e-commerce will grow faster, with a growth rate of 22% in the next five years, which is twice the growth rate of offline.
Driven by both online and offline, China's consumer market is showing a more diversified development trend, so how can brands accurately grasp consumer needs and break through this track?
Wang Wei, Chief Operating Officer of Yingtong Group, shared: "Perfume and fragrance have quietly penetrated into the lives of consumers, and Chinese perfume consumers have more consumption behaviors in the cross-category market in many aspects of life, such as clothing, food, housing and transportation, and with the advancement of fragrance users, cross-category consumer behaviors are more significant. ”
● Wang Wei, Chief Operating Officer of Yingtong Group
According to public information, fragrance products will be widely penetrated in many fields in 2023, and the number of filings of fragrance shower gel is second only to perfume products. Some niche salon fragrance brands are committed to meeting the needs of high-end market for washing and care fragrances; Another part of the brand is to meet the needs of consumers in more diversified fragrance scenes, to achieve full coverage of exquisite home life, and to create an atmosphere of exquisite life.
In addition to category expansion, how to capture consumers from the fierce market competition is also an indispensable part of brand development.
The white paper concludes that through a multi-sensory and multi-dimensional consumer experience, brands can form emotional resonance and psychological satisfaction with consumers. In the future, market competition will revolve around "unbounded experience", and brands will devote themselves to researching the multi-field linkage between the platform and the crowd from online customer acquisition to offline experience.
In response to this market competition trend, Wang Wei shared three new opportunities for global linkage from the channel side.
Slow Style: Slow Broadcast has changed the traditional form of content selling, paying more attention to the emotional connection with consumers, relaxing and smooth, reflecting the tonality of life, which is highly consistent with the perfume and fragrance category, and will be a new opportunity for perfume brands to deepen the content field.
Professional and interesting: KOS (Key Opinion Sales) has professional brand service and sales conversion capabilities, and they have a deeper understanding of brands and products. Therefore, when KOS replaces the traditional role of KOLs and KOCs, it can provide consumers with more direct one-to-one consulting services and achieve more efficient sales conversion.
Field resonance: Field resonance is to accurately operate the brand's crowd assets through the connection between online and offline, empower multiple fields to grow and acquire customers, and guide brands to create topics and content that are more suitable for consumer needs and interests.
Overall, China's perfume market has broad prospects, but it still faces challenges at this stage, and brands should combine the diverse needs of consumers to establish a set of comprehensive solutions that take into account both internal and external aspects and link all walks of life, so as to create a rich experience for consumers through the unique category of perfume.