Wen | Qian Yi
Editor| Gu Yan
The domestic fragrance lifestyle is coming.
A large number of Chinese local fragrance brands have entered the public eye, and the emergence of brands such as Smell Library, RE Perfume Room, Guanxia To summer, DOCUMENTS Wenxian, Bing Xili, Scentooze Three Rabbits, Ballio, DAILY LAB, Plustwo Plustwo Rabbit and other brands has become a clear evidence of the gradual rise of China's fragrance consumer market.
Capital endorsement to promote the smell economy on the new outlet, recently not only a number of domestic fragrance brands have completed tens of millions of yuan level financing, but also ByteDance will personally set up a perfume brand "Emotif" news.
What kind of consumption signal does fragrance release from the niche market to the mass stage? How much imagination does the "smell economy" have? Where is the opportunity for new domestic brands to compete for a place?
<h1 class="pgc-h-arrow-right" Data-track="5" > the rise of the odor economy</h1>
After a day of heavy work, what kind of things can play a role in soothing emotions and companionship for a short period of time for the physically and mentally exhausted "hit workers"? The answer given by consumers is – a good smell.
Originally a sub-branch of beauty, fragrance has quietly grown and grown under the impetus of consumption upgrading in recent years, becoming an independent category covering many sub-categories such as perfume balm, home fragrance, fragrance personal care, etc., and the market has shown high growth rate and potential.
According to the "2020 China Perfume Industry Research White Paper", the global perfume market size is about 406.3 billion yuan, of which China accounts for only 2.5%; but compared with 2019, the scale growth rate in 2020 reached 26.6%, and the market is accelerating penetration.
Euromonitor predicts that from 2021 to 2025, the compound annual growth rate of China's fragrance market will reach 21.78%, and the market size is expected to exceed 30 billion yuan by 2026.
On the one hand, in the fast-paced urban life, the emotional value that fragrance can bring is gradually realized. According to the 2020 China Urban Women's Mood Report, 97% of women believe that emotional freedom is difficult than financial freedom, so about 20% of women will regulate their emotions by smelling aromas (such as lighting incense candles).
On the other hand, the emergence of the epidemic has brought opportunities to the domestic fragrance industry. The extension of stay-at-home time has rapidly boosted the rise of China's fragrance consumer market from infancy to rise.
In the observation of Zhou Yiping, founder of the niche fragrance futchi, the number of users began to spontaneously fission after the epidemic, and the consumption use of fragrance also changed from gift-giving "pleasant" to self-use "pleasing to themselves", "People spend a lot of time in a closed environment every day, and the demand for high-quality, happy home time is more intense." ”
Taking the Tmall platform as an example, Tmall international imported perfumes in 2020 increased by 70% year-on-year; in terms of domestic brands, according to Tmall online commodity sales data, the Bingxili brand became the only domestic brand among the Top 10 Tmall perfume brands in 2020 with annual sales of 214 million yuan, and its sales were second only to Chanel.
A number of emerging domestic brands have begun to emerge, such as the smell library that has launched the explosive perfume "Cool White Open", the Ballio BARRIO, which has sold more than 800,000 bottles in the first half of the year, and the Guanxia To summer, which focuses on high-end fragrances and focuses on creating offline space landmarks, documents and so on.
Capital has long smelled this "fragrant" market, and only waits for the time to brew and mature. In 2021 alone, domestic brands such as Plustwo Plustwo Plus rabbit, RE perfume room, Scentooze three rabbits, Li Ran, and Smell Library have been financed, with amounts of up to tens of millions.
<h1 class="pgc-h-arrow-right" data-track="16" > how to create the light of domestic goods</h1>
To create a high-quality fragrance, the perfumer and the raw material are the two key factors.
On the one hand, experienced perfumers determine the soul and temperament of a fragrance. Perfumer Rita revealed that a bottle of real perfume from the initial inspiration to the final finished product requires the perfumer to go through hundreds of iterations and attempts, and professional perfumers are a scarce resource in the industry. Most of the domestic fragrance brands choose to cooperate extensively with global perfumers to reinforce.
On the other hand, natural raw materials are relatively expensive relative to synthetic raw materials but mostly easy to obtain, and the cost of chemical raw materials changes a large range. The overall raw material cost and cost of fragrance is not high, the official price of imported brands in tariffs, channel profits, seller profits accounted for more than half, the cost of raw materials itself accounted for only a very small part, the manufacturing threshold is not as high as imagined.
According to the former Paris luxury perfumer Xiong Xiong estimated, per kilogram of perfume pure liquid, only the price of raw material costs is usually 300-10000 yuan / kg, diluted to about 10% can be used as a daily perfume, so the raw material cost is roughly 0.03-1 yuan / ml. The objective conditions for domestic fragrance to make a good product are obviously fully met.
Compared with the international incense giants, the significant gap between domestic fragrance brands lies in product research and development capabilities, supply chain capabilities, brand power and other aspects.
The international brand fragrance has a deep moat built by raw materials, technology and global marketing, with a strong group endorsement, a long-standing brand precipitation and a long-term monopoly of the market, matching stable spice suppliers and famous perfumers, and has formed a complete set of highly mature industrial chains.
"The gap between domestic brands and international brands is determined by the supply chain, and the international aromatherapy supply chain has perfect testing standards, inspection standards, color grading standards and production standards, and the ignition and volatilization effects of the corresponding products are outstanding, while the domestic has not reached a similar level." Futchi co-founder Cai Lisheng said.
However, the advantage of domestic fragrance brands is that they are good at creating artistic conceptions and accurately grasping consumer preferences, and have the advantage of natural feelings compared to imported brands in terms of unique cultural identity and memory of the times.
Taking Guan Xia as an example, while focusing on oriental plant tones, its naming and copywriting are permeated with strong oriental aesthetic imagery.
Such as the aroma IP Fu Kaisen Road restoration "Shanghai French Concession Roadside, the branches blooming magnolia fragrance", Kunlun boiling snow depicted and three or five friends around the stove night talk "late to the sky want snow, can drink a cup of nothing" scene, Yihe Jingui told "southerners living in the north, passing by the Summer Palace in autumn, remembering that there was a mid-autumn mother who sprinkled osmanthus flowers on rice wine".
Kunlun boiled snow and Yihe golden cinnamon aromatherapy
Source: Guanxia Mini Program
What impresses consumers is often not the spice ingredients, material origin or production process, but through creative expressions that can be associated with the picture, emotion, and memory, which means that the aesthetic level, smell understanding and brand concept of the product are effectively disseminated at the same time.
Consumers are also willing to pay for their feelings, as can be seen from the fact that the Guanxia public account sells out immediately for half an hour every Thursday at 8 p.m., a bottle of popular fragrance is difficult to find, and it is even more possible to promote the Guanxia daigou format.
Due to the strong personal preference for the perception of smell, offline personal experience and feeling also play a key role in facilitating transactions.
"Planting a lipstick in ten seconds in a live broadcast is almost impossible to do in a fragrance." Zhou Yiping said, "People always have a preference for the taste they like, online platforms cannot convey the smell and texture of handmade, and offline store space can strengthen the atmosphere of novelty, life and sharing." ”
However, new brands do not have advantages in channels and cost control, and most of the channel strategies of domestic fragrance brands are mainly based on online channels, and gradually lay offline channels after accumulating brand recognition. Among them, most of them are lightweight models - entering specialty boutiques, art stores, urban landmark trend stores, etc. for partial display, or testing offline channels through lower-cost and more flexible pop-up stores.
For brands that want to obtain a higher premium and high-end positioning, opening an offline independent store that combines business and art has become a must.
Guanxia opened its first "Guanxia Living Room" in Taikoo Li, Sanlitun, Beijing in December 2020, and documents' first store was located in Shanghai's Huaihai Road Business District in July 2021, both of which emphasized the concept of space and immersive art experience, which Wu Sheng, founder of Scene Lab, summarized as "the art museumization of commercial space".
<h1 class="pgc-h-arrow-right" data-track="36" > sell a way of life</h1>
Although it needs to be painstakingly focused on product appearance, marketing, and stores, the core of the fragrance is still in the product itself.
"Products are the best marketing." Wu Tong, the founder of Song Dynasty Aromatherapy, believes that the logic of product development should eventually return to user needs, set the main tone that caters to the actual functional needs or emotional needs of users, and then polish the product, and the market will naturally give feedback.
In the documentary "Journey to Find Fragrance", Dior classified the essence of the fragrance business as "selling a fantasy", which can be understood to some extent as the sale of fragrance is the consumer's yearning for beauty and a better life, so it is destined to be a track that pays attention to perceptual experience, great privacy and differentiated preferences.
Represented by fragrance, more and more seemingly "useless", "non-rigid demand", "IQ tax" consumer goods have emerged and heated up, corresponding to the evolution of consumer mentality from pragmatism to self-satisfaction, which is especially evident in the younger generation.
PwC's "Young Power China 2021 Cultural Insights and Business Inspiration Report" believes that the younger generation born after 1985 is the main force of "self-pleasing" consumption, willing to pay for interests, experiences and experiences.
The "smell economy" is only a mirror of contemporary consumption transformation, reflecting the staggered trend of the decline of practical functional products and the rise of emotional experiential things.
At the root of this, functional products are becoming more and more easily satisfied immediately and fully, material life is no longer scarce, and consumers are beginning to favor products that can create more emotional experiences. Correspondingly, in the new era of consumption, the emotional value in material consumption is slowly valued.
What kind of product can carry a rich emotional experience?
Huang Hai, a consumer investor at Fengrui Capital, believes that "things that may become part of the individual itself", products that are closely related to user value and personality, and can obtain identity will have a greater chance of enjoying high premiums for creating emotional experiences, such as luxury goods.
Smell is such a carrier that can carry emotions, express personality and gain identity and taste. Surveys have shown that 75% of the emotions that humans produce every day are caused by odors. Other studies have shown that the sense of smell is more able to awaken scenes and memories in the mind than sight and hearing, and is the most emotionally connected and responsive sensory sense.
In the view of Fu Jieni, founder of the perfume designer brand Shifu, smell can affect people's spirit and thinking, people who understand incense can read out the emotions expressed in it, and ordinary people can also get different spiritual energy from it. In terms of the possibility of tapping into the emotional core of smell, fragrance may be a long-undervalued market.
Specific to the research and development of enterprise products, it is more and more difficult for pure practical products to make significant differences compared with similar products in the market, and the degree of functional innovation and optimization and improvement space are becoming more and more cramped. Compared with the pursuit of ping efficiency and ultimate efficiency in the past, more and more enterprises have begun to pay more attention to consumer experience and perception, and explore the high premium of obtaining more product extensions.
Whether the business model is established is the biggest doubt of investors about this track.
Compared with makeup and skin care, the volume of fragrance is still very small, and domestic consumers' awareness of this industry is still in its infancy. Yang Ge, founding partner of Xinghan Capital, is conservative about the future prospects of the Xiangxiang Circuit: "The difficulty of commercial model replication is greater than that of other industries, and the efficiency of capital scale is low. ”
However, in the era of new consumption and the rise of new domestic products, in the context of "all consumer goods and brands are worth redoing", fragrance is undoubtedly a track with growth potential, catering to the differentiated needs of consumer groups and generational changes, and market enthusiasm.
Thanks
Due to space constraints, I was unable to attach all the content, but thanks to many professionals for providing very valuable ideas and rich cases during the writing process of this article, special thanks (in no particular order):
Huang Hai, executive director of Fengrui Capital, Yang Ge, founding partner of Xinghan Capital, Zhou Yiping, founder of futchi, and Wutong, founder of Song Dynasty Aromatherapy.