The fragrance industry has a new challenger: Southeast Asia

Southeast Asia’s local beauty sector has been gaining ground for years. Now a new force is reshaping the fragrance market specifically: the region’s own younger consumers. Three factors are driving them: a demand for personalization, a preference for physical retail, and an expectation of locally rooted products. Local brands are not the only ones taking notice. East Asian perfume houses are also moving into the region, drawn by a market that is too large to overlook. Gen Z is rewriting fragrance as identity Niche perfumes are flourishing across the region, with brands selling not just a scent but an entire experience, often wrapped inside a single store, like Oaken Lab from Indonesia, which has grabbed the attention of locals and tourists alike. Oaken Lab is not alone. In Thailand, Butterfly Thai Perfume draws on local heritage to create scents rooted in cultural memory — referencing everything from mango sticky rice to broader markers of Thai identity. As the market expands, it is attracting players from beyond the region. The consumer appetite is already established: 65% of Filipinos and 57% of Malaysians say they buy cologne regularly, according to the Malaysian Journal of Medicine and Health Sciences, pointing to a base that is engaged, not just emerging. For Gen Z, fragrance has moved beyond basic grooming. It has become an affordable luxury and a tool for self-expression — a way of communicating identity before a word is spoken. Eddie Li, co-founder and general manager of Shareco Design, a Taiwanese perfume brand, is now expanding into Singapore and Malaysia, which he sees as the region’s most promising growth markets. Li points to a new generation of consumers who value individuality as the key market driver. Fragrance, he argues, has shifted from brand symbolism to self-expression and emotional experience — a change that has eroded the automatic loyalty once enjoyed by international houses. According to data from Alibaba shows that trade in perfume from Southeast Asia grew 533% year on year in 2025, driven by a digitally native consumer base with growing disposable income and an appetite for grooming and luxury goods. Homegrown brands turn culture into competitive edge “Local brands have something the big houses can’t bottle — cultural narratives, scent memories. That is a competitive edge, and it is fueling real momentum. Over the past five years, growth has only accelerated. European and American brands still own the lion’s share of the market, but the balance is shifting. Consumer acceptance is no longer the hurdle it once was. It is becoming the norm,” Li says. Lygia, perfumer and founder of Indonesian brand Être Parfums, recognized early that Asia is not one market but many. In Indonesia alone, she observed consumer preferences ranging from soft florals to the bold, powerful profiles more commonly associated with Gulf-region tastes. That diversity gave her a lens into neighboring markets: Malaysia, she noted, shares a similar scent sensibility, and Être is already sold there through resellers. A permanent Malaysian outpost, however, remains off the table — a deliberate choice. Lygia sees exclusivity as part of the brand's identity, positioning Être as something that can only be fully experienced in Indonesia itself. Lygia also noted that both markets have seen a marked shift toward offline retail — giving consumers the chance to experience fragrance in person — a trend she says has accelerated since the pandemic. “Customers no longer buy blind. They want to smell it, feel it, experience it before they commit. That is precisely why local brands are stepping off the screen and into physical stores,” Lygia says. The shift comes with a pricing challenge, however: consumers increasingly walk in, test a fragrance, then comparison-shop on their phones — where subsidies frequently undercut in-store prices. Pricing strategies vary just as widely. Bianca Larasati, founder of Jakarta-based fragrance brand Anca, is direct on the point: in Indonesia, price is everything. She points to the diversity of consumer segments across the country and the broader region, each with distinct expectations — and argues that a single price point cannot serve them all. “My main target market is working-class women, especially younger consumers who are eager to discover new local brands. I’ve seen strong growth in that segment, particularly among those who connect with the storytelling behind each scent. It also helps that I’ve designed the fragrance to be travel-friendly, down to the packaging,” she says. “Sourcing ingredients is its own challenge. Availability shifts, costs swing, and competition has only intensified with the surge of local fragrances — forcing brands to continually differentiate through concept and content,” she says. Indonesia is not alone. Singapore and Thailand are also experiencing significant fragrance market growth — a trend reflected in their export figures. According to the Observatory of Economic Complexity (OEC), Thailand exported $2.75 billion worth of perfumery and cosmetics in 2024, ranking it 17th among 225 countries globally. Singapore exported $4.44 billion in the same period, placing it 13th. Interactive store experiences This shift has fundamentally changed how physical retail operates. Offline stores increasingly function as showrooms, with many customers completing their purchases online. Brands are being pushed to rethink what the physical space is actually for. Oaken Lab’s two-store strategy — Jakarta for metropolitan consumers, Bali for the tourist trade — serves a dual purpose. The physical presence also allows the brand to command higher margins, sustained by an in-person experience that online retail cannot replicate. Reiting Lee, founder of Taipei-based boutique consultancy The Oriental Hybrid and an innovation strategy consultant working across Taipei and Riyadh, sees a clear divide. “Physical stores build loyalty through experiences you cannot replicate on a screen. Perfume is personal — it reacts to the body, and you have to test it in person to know if it works. That physical presence elevates the experience in a way that online retail simply cannot,” Lee says. “Asian perfume brands are proving that a localized approach to storytelling works — and that is shifting the global beauty and fragrance market toward greater diversity in self-expression,” Lee adds. The numbers support the shift. According to Alibaba, demand for niche artisanal perfume on its platform grew 120% quarter over quarter through 2025. Gender-fluid fragrances are also gaining ground, as traditional binary marketing gives way to unisex and genderless scents oriented around mood and personality. “The dupe market is significant, but we chose a different path. We take the artisanal approach — creating new scents from the ground up. That is what gives the brand its identity,” Lygia says. Lygia also stressed the importance of understanding microtrends. A scent that resonates in Indonesia, she says, does not always translate in Thailand. Niche perfume may be thriving, but it is doing so within an increasingly saturated market — one that the fragrance sector’s own rapid growth has created. Chris Lin, founder of Taigrance fragrance store, sees the current moment as only the beginning. Asian brands, he argues, are still refining their products and sharpening their understanding of individual markets — and the region’s scale means there is no shortage of territory left to reach. “In recent years, the fragrance industry has shifted toward innovation and the exploration of Eastern styles — moving the spotlight from rose and oud toward Southeast Asian cuisine and savory profiles. For Asian brands, that is a significant opportunity. With more local brands finding success in international competitions, the momentum is there to build on,” Lin says. “Forget chasing fancy packaging. The real focus should be on craftsmanship and original intention. Create something distinctive — let the scent speak for itself. That is how you win consumers, both at home and abroad," Lin adds.

The fragrance industry has a new challenger: Southeast Asia

How Bottega Veneta weaved China’s forever it bag

Upgrade to Pro

Sectors

Insights

Company

The fragrance industry has a new challenger: Southeast Asia

How Bottega Veneta weaved China’s forever it bag