Perfume and Fragrances - China - July 2012
“Prior to the 1980s, it was very uncommon to see any ownership or usage of fragrance in China and it was only in the early 1990s that fragrance started to become commonly owned and used. Over the last 20 years, the Chinese fragrance market has risen from practically nothing to a sizeable, though still underdeveloped category. US and UK, per capita spending on fragrance is estimated at US$10 and US$33 respectively, while per capita spend in China is only around US$0.5 (Mintel, 2011). Applying fragrance is still not considered to be a necessity for Chinese consumers, however it is slowly being integrated into the grooming routine. "
- How consumers transition from traditional fragrance to western fragrance application? How important is personal image and will cultural perceptions convert consumers to using western brands and products?
- How have the different brands positioned themselves in this fragmented market? What are the opportunities and obstacles in the brand strategies and activities currently used by the fragrance companies in targeting the Chinese?
- How has fragrance distribution been developed and has this helped to open up more market opportunities?
- Do consumer’s lifestyles affect their perceptions of scents and how can packaging innovation be adapted to attract greater consumer interest?
Prior to the 1980s, it was very uncommon to see any ownership or usage of fragrance in China and it was only in the early 1990s that fragrance started to become commonly owned and used. Over the last 20 years, the Chinese fragrance market has risen from practically nothing to a sizeable, though still underdeveloped category. In the US and UK, per capita spending on fragrance is estimated at US$10 and US$33 respectively, while per capita spend in China is only around US$0.5 (Mintel, 2011). Applying fragrance is still not considered to be a necessity for Chinese consumers, however it is slowly being integrated into the grooming routine.
The recent trend of Chinese consumers travelling overseas has exposed them to more global luxury brands and products. The majority of Chinese consumers purchase luxury items during their travelling due to the cheaper pricing of these products abroad, when compared to prices in China, owing to the high taxes imposed. Outbound Chinese tourists have increased by up to 70 million in 2011, 1.2 times the number of US outbound tourists and 3.5 times the number of Japanese outbound tourists (China National Tourism Administration, 2012). According to Global Blue (a global tax-free shopping company), Chinese outbound tourists were the top spenders on tax-free shopping in 2011 and 2010.
China’s luxury market, in which fragrance occupies a considerable share, has been expanding rapidly compared to the global luxury market. According to The Wall Street Journal, China had surpassed the US in 2009, and has been the world’s second largest consumer market for luxury goods, following Japan. Chinese consumers are willing to spend on luxury brands and products despite the global economic recession, because they are seen to enhance social status.
The fragrance culture in China is still relatively immature, and if exploited appropriately, by placing an emphasis on consumers’ experiences of fragrance cultures and scent exploration, fragrance spending will have tremendous room to grow.
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