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Fragrances - China - September 2015

Market growth has been stagnant due to the economic slowdown. FMCG brands in China have seen declining growth and international groups such as L’Oréal and Estée Lauder reported slower growth in China in Q4 2014.
From the consumer point of view, Mintel has found that as many as 58% of respondents have not purchased fragrance in the last 12 months and that Chinese consumers are low frequency users.
Mintel finds that most consumers (60%) only wear fragrances on special occasions, while only 30% of consumers wear fragrance daily. In addition, 70% of respondents said they bought fragrance as gift. Targeting travelling shoppers is critical for the gift-giving market."

Wenwen Chen, Senior Beauty & Personal Care Analyst

This report looks at the following:

  • Low frequency of usage and market maturity show the importance of acquiring new buyers for gifting
  • Creating premium packaging for gift-givers
  • Customisation becomes the future
  • Exclusive experience to capitalise on high income earners
Meanwhile despite the high market penetration in urban China, consumers show low engagement with fragrance products in terms of frequency of usage and knowledge of fragrance products.
 
To unlock future growth, premium brands can first invest in the gift-giving segment with aggressive channel expansion, especially in department stores and airports. Secondly, brands could encourage high income and Mintropolitan groups to trade up by offering bespoke products and services or some exclusive personal experiences.
 
For mass-prestige fragrance brands offering a wide selection with smaller packaging innovation and lower pricing strategy could attract mass-market shoppers. Domestic brands could bring back the long history of Chinese scent culture via traditional themes or vintage packaging.

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Table of contents

  1. Introduction

      • Products covered in this report
        • Figure 1: Product positioning
      • Methodology
        • Abbreviations
        • Executive Summary

            • Stagnant growth caused by low usage and slowdown in economy
              • Figure 2: China fragrance market, value sales, 2010-15
            • Attracting the Mintropolitans will become the key to maintaining growth
              • Figure 3: Best -and worst-case forecast of China retail value sales of fragrance, 2010-20
            • Luxury group brands continue their domination while Coty challenges
              • Figure 4: China fragrance market share, by value (%), 2014
            • Low frequency of usage shows the importance of acquiring new buyers for gifting
              • Figure 5: Purchase in the past 12 months, June 2015
            • 55% of non-buyers are users
              • Figure 6: Usage repertoire, by Purchase in the past 12 months, June 2015
            • Smaller packaging to attract the more mass-market consumers
              • Figure 7: Spend on fragrance, June 2015
            • Targeting travelling shoppers is critical for the gift-giving market
              • Figure 8: Purchase channel, by Purchase purpose, June 2015
            • Go premium when targeting the gift-givers
              • Figure 9: Purchase motivation, June 2015
            • Customisation becomes the future
              • Figure 10: Interest towards fragrance product/service, June 2015
            • What we think
            • Issues and Insights

                • Low frequency of usage and market maturity show the importance of acquiring new buyers for gifting
                  • The facts
                    • The implications
                      • Creating premium packaging for gift-givers
                        • The facts
                          • The implications
                            • Customisation becomes the future
                              • The facts
                                • The implications
                                  • Exclusive experience to capitalise on high income earners
                                    • The facts
                                      • The implications
                                        • Figure 11: Grasse-based fragrance house Fragonard, june 2015
                                    • Market Size and Forecast

                                      • Key points
                                        • Market drivers
                                          • Say goodbye to the original Chanel No.5
                                            • Duty free retailing will become the battlefield to attract Chinese tourists
                                              • Import tariff changes will have a positive impact on luxury fragrance brands
                                                • Luxury brands need to rethink their pricing strategy against a falling RMB
                                                  • Stagnant growth caused by low usage and economic slowdown
                                                    • Figure 12: China fragrance market, value sales, 2010-15
                                                  • Attracting the Mintropolitans is key to maintaining growth
                                                    • Figure 13: Best- and worst-case forecast of China retail value sales of fragrance, 2010-20
                                                  • Forecast methodology
                                                  • Market Share

                                                    • Key points
                                                      • Luxury group brands continue their domination while Coty will challenge
                                                        • Figure 14: China fragrance market share, by value (%), 2012-14
                                                        • Figure 15: La Petite Robe Noire Ma Robe Pétales Eau Fraîche, Q1 2015
                                                        • Figure 16: Burberry Brit Rhythm for Her Eau de Toilette, Q2 2014
                                                        • Figure 17: Marc Jacobs Daisy Dream, Q4 2014
                                                        • Figure 18: Frederic Malle Cologne Indélébile with Dominique ropion, Q1 2015
                                                    • Companies and Brands

                                                      • Chanel
                                                        • Recent news
                                                          • Recent launches
                                                            • Figure 19: Chanel fragrance launches from 2007-15 (August)
                                                          • Campaigns
                                                            • Take your Chance
                                                              • Figure 20: Chanel Chance Eau Vive Eau de Toilette, Q1 2015
                                                            • Coty
                                                              • Recent news
                                                                • Brand portfolio and major launches
                                                                  • Figure 21: Coty’s fragrance brand portfolio and major launch during 2014
                                                                • Campaigns
                                                                  • Calvin Klein REVEAL
                                                                      • Figure 22: Calvin Klein Reveal, July 2014
                                                                    • Miu Miu The First Fragrance
                                                                      • L’Oréal
                                                                        • Recent news
                                                                          • Figure 23: Lancôme La Vie est Belle Eau de Parfum, Q3 2012
                                                                        • Brand portfolio and major launches
                                                                          • Figure 24: L’Oréal’s fragrance brand portfolio and major launches during 2014
                                                                        • Campaigns
                                                                          • Black Opium to attract younger generation
                                                                            • Figure 25: Yves Saint Laurent Black Opium Eau de Parfum, q2 2014
                                                                          • LVMH
                                                                            • Recent news
                                                                              • Brand portfolio and major launches
                                                                                • Figure 26: Lvmh’s fragrance brand portfolio and major launch during 2014
                                                                              • Campaigns
                                                                                • The Future is Gold
                                                                                  • It’s Miss, Actually
                                                                                    • Johnny for Dior
                                                                                      • Figure 27: Dior Eau Sauvage, relaunch 2015
                                                                                    • Dahlia Divin
                                                                                      • Figure 28: Dahlia divin by Givenchy, September 2014
                                                                                  • Who’s Innovating?

                                                                                    • Key points
                                                                                      • Debut launches with big anticipation
                                                                                        • First fragrance from Miu Miu
                                                                                          • Alaïa Paris, the first perfume by Azzedine Alaïa
                                                                                            • Ari by Ariana Grande
                                                                                              • New Hermès home fragrance collection
                                                                                                • Louis Vuitton debut fragrance (2016)
                                                                                                  • No ordinary packaging
                                                                                                    • Spray the Teddy bear
                                                                                                      • Figure 29: Moschino Toy Eau de Toilette, Q4 2014
                                                                                                      • Figure 30: Byredo Oliver Peoples fragrance, Q2 2015
                                                                                                    • A personalised bottle only for you
                                                                                                        • Figure 31: Guerlain Mon Exclusif Eau de Parfum, August 2015
                                                                                                      • Experience is all
                                                                                                        • Point Parfums Digital
                                                                                                          • The Fragrance Bar
                                                                                                          • The Consumer – Buying Behaviour

                                                                                                            • Key points
                                                                                                              • Low frequency of usage shows the importance of acquiring new buyers for gifting
                                                                                                                • Figure 32: Purchase in the past 12 months, June 2015
                                                                                                              • Females are more likely to buy fragrance
                                                                                                                • Figure 33: Purchase in the past 12 months, by demographics, June 2015
                                                                                                                • Figure 34: Purchase in the past 12 months, by demographics, June 2015
                                                                                                              • 57% bought fragrance as a gift
                                                                                                                • Figure 35: Purchase purpose, June 2015
                                                                                                              • Acquire male buyers on gifting occasions
                                                                                                                • Figure 36: Purchase purpose, by demographics, June 2015
                                                                                                                • Figure 37: Dior J'adore Extrait de Parfum, q2 2014
                                                                                                            • The Consumer – Usage Behaviour

                                                                                                              • Key points
                                                                                                                • 55% of non-buyers are users, suggesting market maturity
                                                                                                                  • Figure 38: Usage repertoire, June 2015
                                                                                                                  • Figure 39: Usage repertoire, by purchase in the past 12 months, June 2015
                                                                                                                • Most users switch between 2-3 fragrances
                                                                                                                  • Figure 40: Usage repertoire, June 2015
                                                                                                                • Shh, a secret scent club
                                                                                                                  • Figure 41: Fragrance– CHAID – Tree output, June 2015
                                                                                                                • More personalisation experience for loyal users
                                                                                                                    • Figure 42: Le Labo Limette 37 Eau de Parfum
                                                                                                                • The Consumer – Spending Behaviour

                                                                                                                  • Key points
                                                                                                                    • Smaller packaging to attract the more mass market consumers
                                                                                                                      • Figure 43: Spend on fragrance, June 2015
                                                                                                                    • Innovation in gifting packaging
                                                                                                                    • The Consumer– Channel Usage Behaviour

                                                                                                                      • Key points
                                                                                                                        • Offering immersive in-store experience is still relevant for fragrance
                                                                                                                          • Figure 44: Purchase channel, June 2015 versus 2014
                                                                                                                        • Attracting male shoppers online
                                                                                                                          • Figure 45: Purchase channel, by demographics, June 2015
                                                                                                                        • Targeting travelling shoppers is critical for gift-giving market
                                                                                                                          • Figure 46: Purchase channel, by Purchase purpose, June 2015
                                                                                                                        • Innovative ways to attract new shoppers
                                                                                                                          • Figure 47: Repertoire of purchase channel 2015 versus 2014
                                                                                                                          • Figure 48: Marc Jacobs pop up stores in Covent garden, August 2014
                                                                                                                      • The Consumer – Motivations for Buying Fragrance

                                                                                                                        • Key points
                                                                                                                          • Go premium when targeting at the gift-givers
                                                                                                                            • Figure 49: Purchase motivation, June 2015
                                                                                                                            • Figure 50: purchase motivation, June 2015
                                                                                                                          • Experience is all
                                                                                                                            • Limited fragrance knowledge despite market maturity
                                                                                                                            • The Consumer – Marketing Opportunities

                                                                                                                              • Key points
                                                                                                                                • Customisation becomes the future
                                                                                                                                  • Figure 51: Interest in fragrance product/service, June 2015
                                                                                                                                  • Figure 52: Interest towards fragrance product/service, by demographics, June 2015
                                                                                                                                • Exclusive experience to capitalise on high income earners
                                                                                                                                  • Figure 53: Interest towards fragrance product/service, by demographics, June 2015
                                                                                                                                • Vintage is the new innovation
                                                                                                                                    • Figure 54: Hermès Le Jardin de Monsieur Li Eau de Toilette
                                                                                                                                    • Figure 55: Different application tools for perfume balm reflecting Chinese culture
                                                                                                                                • The Consumer – Meet the Mintropolitans

                                                                                                                                  • Key points
                                                                                                                                    • Why Mintropolitans?
                                                                                                                                      • Who are they?
                                                                                                                                          • Figure 56: Demographic profile of Mintropolitans versus Non-Mintropolitans, by gender, age and personal income
                                                                                                                                          • Figure 57: Demographic profile of Mintropolitans versus Non-Mintropolitans, by marital status, city tier and education level
                                                                                                                                        • Different ways of premiumisation for the Mintropolitans

                                                                                                                                        Companies Covered

                                                                                                                                        To learn more about the companies covered in this report please contact us.

                                                                                                                                        Fragrances - China - September 2015

                                                                                                                                        £3,273.18 (Excl.Tax)