China’s home fragrance boom still lacks a habit

Chinese consumers will pay 790 RMB ($116) for a box of three miniature Loewe candles. But they are less likely to ever finish burning them. That contradiction sits at the heart of China’s home fragrance market. Sales are climbing, luxury groups are investing heavily in the category, and domestic brands are transforming incense, diffusers and room sprays into lifestyle products. Yet many consumers still treat home fragrance as an occasional indulgence rather than an everyday household essential. According to Shangpu Consulting Group’s 2025 China scented candle market insights report, 38% of surveyed candle buyers said the main reason they purchased less was the fear they would never use up the product, ranking ahead of both price and scent fatigue. As per Zvzo findings, China’s aromatherapy market, excluding finished perfume, reached an estimated 32.5 billion RMB ($4.8 billion) in 2025, up 18.7% year-on-year. Scented candles grew 22.3% to 3 billion RMB ($445 million), while the larger flameless fragrance segment reached 8 billion RMB ($1.2 billion). Fragrance penetration, however, remains below 5%, far behind mature Western markets where more than half of consumers regularly purchase fragrance products. In China, the challenge is no longer convincing consumers to buy their first candle or diffuser. It is persuading them to build daily rituals that create repeat purchases rather than one-off transactions. The pandemic created demand, but everyday life is testing it Home fragrance may feel like one of China’s newest lifestyle categories, but the market has already lived through several distinct phases. “When I first introduced Trudon in China in 2013, there were cultural perceptions to overcome,” said Julie Shah, founder of Hong Kong and China-based fragrance distributor and incubator Chios, representing brands including Perfumer H and Bienaimé 1935, while also developing its own retail concepts, including Enoia. “Many customers associated white candles with funerary rituals and remembrance, rather than with luxury living or home decoration.” The category remained niche for years before an unexpected catalyst accelerated adoption. “During lockdowns in 2020, we experienced extraordinary growth as people invested in making their homes feel more comforting and personal,” Shah said. For many brands, Covid-19 appeared to validate home fragrance as China’s next major luxury lifestyle category. But the surge masked a more temporary behavioral shift. “By 2022, however, I believed that surge was temporary. Once society reopened in March of 2023, demand for candles fell significantly, and the category has never returned to its pandemic peak. Consumers redirected spending back toward travel, dining and experiences,” Shah said. The broader fragrance market has continued expanding, but today’s growth looks different. Rather than simply attracting first-time buyers, brands are now competing to increase usage frequency, expand occasions and improve replenishment. “I don’t think the main challenge is product availability; it’s desirability,” said Anaïs Bournonville, chief executive of AB Advisory, a marketing and retail agency based in Paris and Shanghai that runs home fragrance brands Baobab Collection, Acqua Dell’Elba, Farmacia SS. Annunziata 1561. “Chinese consumers are already embracing home fragrance, but adoption remains concentrated around a small number of trusted brands.” Chinese homes don’t need more candles Rather than asking consumers to adopt an unfamiliar habit, brands are increasingly adapting products to existing ones. “The main brake is less about price than about usage habits,” said Dao Nguyen, founder of marketing boutique agency Essenzia ByDao. “Home fragrance already exists at every price point, from Miniso up, and it’s often the entry point into fragrance culture for younger consumers before they move into personal perfumery.” Nguyen argues that the category is already expanding, just not through the formats luxury brands first imagined. While premium candles remain the category’s visual icon, flameless fragrance has quietly become China’s dominant format. In 2025, the domestic flameless fragrance market was already worth around 2.6 times the candle market, with Tmall sales growing more than 30% and smart fragrance devices rising over 50%. Consumers living in compact apartments remain cautious about open flames, particularly following widely discussed residential fires in Hong Kong and mainland China. Diffusers require no supervision, perform well in humid climates and fit into smaller living spaces. Bournonville sees the same pattern. “I believe reed diffusers will continue leading the category, while room sprays have the strongest growth potential,” she said. “Diffusers have become the preferred format because they are effortless, long-lasting, and fit naturally into Chinese homes without the use of fire.” Nguyen said that adoption has favored products requiring the least behavioral change. “Low-friction, no-flame products have been the easiest to adopt,” she added, while cautioning that future winners will ultimately depend on which formats brands continue to invest behind. Ritual matters more than atmosphere For years, home fragrance was positioned as decoration or gifting. Increasingly, it is being marketed as an everyday wellness tool. According to Qince consumer research, 57% of consumers now view fragrance as a way to regulate emotions, while 44% seek psychological comfort or emotional reinforcement through scent. Demand linked to dating, commuting and travel is also growing rapidly, reflecting a move toward scenario-based fragrance consumption. Linda Yu, general manager of Red Ant Asia, describes consumers moving from “pleasing others to pleasing oneself,” with lavender associated with sleep, cedar with stress relief and osmanthus evoking nostalgic childhood memories. She said that 63% of existing users already incorporate home fragrance into their daily lives, although many still purchase different products for different occasions rather than developing loyalty to a single brand. The commercial opportunity therefore lies less in selling another candle than in creating repeat rituals around bedrooms, offices, bathrooms, cars and wardrobes. “Home fragrance is evolving from a decorative object into a functional part of daily life,” Bournonville said. “Chinese consumers are no longer choosing one scent for their home; they are choosing different fragrances for different moments and spaces.” That also places the category in direct competition with sleep products, aromatherapy, wellness supplements and beauty brands — all of which promise relaxation, emotional balance and self-care. Decoration and gifting have not disappeared, but increasingly coexist with functional motivations centred on sleep, stress management and everyday mood regulation, Nguyen said. For brands, the opportunity lies not in replacing existing habits but in layering fragrance into routines consumers already practice. China is localizing luxury fragrance European home fragrance developed around fireplaces, candlelight and entertaining. China’s version is emerging through apartments, tea culture, meditation, incense and everyday rituals. “Chinese stick incense is now the fastest-growing fragrance category,” Yu said. “Its edge lies in a rich cultural narrative of herbal medicine and ancient blending.” Brands including To Summer and Documents have already built businesses around that insight, repositioning incense as part of contemporary daily life rather than historical tradition. International brands are responding. Le Labo recently introduced its first incense collection alongside a China-exclusive incense holder inspired by traditional inkstones, while Aesop and Jo Malone London have also entered the category. “International brands absolutely still have authority, craftsmanship and heritage,” Shah said. “The challenge is that many domestic Chinese brands have become much better at speaking to contemporary Chinese lifestyles.” Bournonville agrees that the market is not becoming a contest between local and international players. “They don’t sell the same dream,” she said. “An Italian brand should feel unmistakably Italian, just as a French brand should express its own heritage and craftsmanship. Consumers are not only buying a scent — they are bringing a piece of that brand’s world into their home.” New competitive advantage isn’t marketing The next phase of competition may have less to do with branding than operations. One challenge rarely discussed publicly is climate. China’s increasingly hot and humid summers create narrow shipping windows for imported candles, which risk softening or deforming during transportation and warehousing. Domestic manufacturers can replenish inventory faster, avoid seasonal disruption and respond more quickly to changes in demand. “Ultimately, I don’t think international brands will succeed simply because they have heritage,” Shah said. “They will succeed if they combine that heritage with products, storytelling and operations that genuinely fit the Chinese market.” That operational flexibility is becoming increasingly valuable as luxury groups invest more heavily in the category. Estée Lauder Companies’ decision to bring production of Jo Malone London, Tom Ford and Aerin home fragrance deeper into its own manufacturing network reflects the strategic importance of craftsmanship, quality control and supply-chain resilience as home fragrance evolves from an adjacent category into a core growth engine. Yet, manufacturing alone will not solve the industry’s biggest commercial challenge. Yu believes brands need to build products around higher-frequency occasions rather than treating home fragrance primarily as décor. Sleep, office focus, commuting and kitchen deodorizing all offer clearer reasons to replenish than candles reserved for special occasions. China’s home fragrance market has already demonstrated that consumers will spend on scent, design and emotional value. The next phase of growth will depend on something far less glamorous: whether brands can persuade consumers to finish what they buy and then come back for more.

China’s home fragrance boom still lacks a habit

How Bottega Veneta weaved China’s forever it bag

Upgrade to Pro

Sectors

Insights

Company

China’s home fragrance boom still lacks a habit

How Bottega Veneta weaved China’s forever it bag