Why are niche fragrances beating China’s slump?

Subscribe to our Jing Beauty to get the latest on China's world of beauty and wellness. What happened Despite China’s economic slowdown and softening luxury demand, the country’s niche fragrance market is showing remarkable resilience. International brands are flocking to secure a foothold in the mainland. On the heels of Frédéric Malle’s recent Shanghai flagship store renovation, Swiss fragrance giant Givaudan opened its Fine Fragrance Creative Centre, “L'Appartement 125,” in downtown Shanghai on October 28. The center, designed by Chinese creative Ma Wen, will facilitate collaborations between Givaudan’s perfumers and Chinese brands, while providing innovative ways for clients to engage with fragrances. The aim, the company states, is to set a new standard for fragrance development in the region. Givaudan CEO Gilles Andrier noted that since entering the Chinese market in 1988, the company has experienced significant growth and transformation, emphasizing the importance of China as a key market and source of inspiration. But Givaudan isn’t the only foreign group vying for a slice of the action. Spanish fragrance conglomerate Puig is also set to expand the presence of its niche brands, including Byredo, Penhaligon’s, L’Artisan Parfumeur, and Christian Louboutin Beauty, across Hong Kong and Macau. The group recently opened its first direct-to-consumer boutique for Penhaligon’s at Galaxy Macau. The store boasts an extensive selection of Penhaligon’s products, including perfumes, candles, and the Discovery Fragrance assortment, which features curated collections like the Potions and Remedies Discovery Set, Portraits Luxury Travel Collection, and both Ladies’ and Gentlemen’s Fragrance Collections. The Jing Take While China’s luxury fashion, watches, and automobile industries grapple with sluggish spending, its niche fragrance sector has emerged as a bright spot for retailers. According to new data, China’s luxury fragrance market hit 20.7 billion RMB ($2.9 billion) last year and is projected to grow to 51.5 billion RMB ($7.2 billion) by 2029. Mintel projects that China’s fragrance market sales will double between 2020 and 2025 from 6.9 billion RMB ($1.1 billion) to 15.4 billion RMB ($2.4 billion), while Euromonitor International expects fragrance sales to reach 30 billion RMB ($4.7 billion) by 2025. These figures highlight a clear consumer pivot: even amid economic challenges, Chinese shoppers are indulging in accessible luxury, especially fragrances over 500 RMB ($70), which now command 55% market share. The category’s recent growth spurt comes as little surprise. Post-Covid-19, consumers have gravitated towards niche fragrances, thanks to their more affordable price points and understated elegance compared to logo-heavy accessories. Shifting consumer attitudes are also fueling the niche fragrance boom, as China’s younger demographic leans toward scents that emphasize individuality. Niche fragrance labels are meeting this demand with personalized blends and distinctive olfactive profiles – a trend highlighted in Jing Daily’s China Fragrance Market Report 2024. As China’s niche fragrance market grows more competitive, brands face the challenge of retaining customers, displaying staying power, and fostering innovation. Brands are doubling down on holistic engagement to stand out. Givaudan’s new center, for example, will feature a fully operational lab, an interactive fragrance wall, and a sensory garden. The space will also host seminars, training courses, and fragrance exhibitions to provide a complete end-to-end experience for customers. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Why are niche fragrances beating China’s slump?