Swiss perfumery sets sights on China’s US$1.5 billion market dominated by Chanel, Dior, Estee Lauder
- Geneva-based Firmenich is opening a new customer experience studio in Guangzhou to get closer to consumers
- Mainland consumers spent US$1.5 billion on perfumes in 2020, or 3.4 per cent of the global fragrance market
The 125-year-old family-owned group specialises in research, creation and manufacture of perfumes for its customers. It also creates flavours and ingredients used in the food industry. It saw double-digit revenue growth in key markets including China when its sales rose 4.7 per cent to US$4.6 billion in the year to June 30.
To get close to the mainland Chinese market, it is opening a new “customer experience studio” on Sunday in Guangzhou, the capital of southern Guangdong province. The space will allow employees to collaborate on new fragrances and tastes with industry influencers, consumers and clients.
“I can’t think of any company in our industry who has succeeded in China without a significant presence here,” said Paul Andersson, president of Firmenich’s China operations. “You need the relationships, you need the agility, you need the local sourcing and you need local talent.”
New product launches of unisex fragrances rose from 13 per cent to 35 per cent from 2018 to 2021 in China, while those for female fragrances slumped from nearly 80 per cent to 57 per cent, according to market research firm Mintel. Last year, Chinese consumers spent US$1.5 billion on perfume, or 3.4 per cent of the global fragrance market, according to Euromonitor.
While global fashion houses Chanel and Dior still dominate the local market, the sector is experiencing a shift as it becomes increasingly crowded with niche brands that are tapping into young consumers’ desire for unique scents.
Brands fanning the shift for unique fragrances include Jo Malone, the third bestselling brand by sales in the local market and part of the Estee Lauder stable. The brand allows shoppers to blend their own signature scents based on their mood and personal tastes. Its freesia cologne, an atypical earthy line that pairs notes of fruit and flower, retails for HK$1,155 (US$149) for a 100ml bottle.
“Young Chinese customers want to be sold more than just the brand, they are increasingly concerned about the brand’s story, values and whether they align with their own,” said Alice Li, senior beauty and personal care analyst at Mintel.
Because of this, perfume companies in China are increasingly tapping into Chinese elements like osmanthus or jasmine, which Resta describes as “nostalgic scents.”
“In the past, we would have designed in Europe or North America to expand in China,” she said. These days, Firmenich blends traditional Chinese ingredients with international influences to create an exciting new style that transports users to their past memories, she added.
Yuchen Zhou, 26, who grew up in Chengdu in southwestern China and now lives in Melbourne, Australia, said she is not fussed about the brand of a perfume. However, she loves jasmine-scented perfume because it evokes memories of her birthplace where jasmine flowers bloom in summer.
“The neutral, wooden characteristics aren’t very strong and it makes me feel really joyful,” said Zhou.
Zhang, the Shanghai student, and Zhou are Gen Z consumers who are becoming the core target audience for global brands seeking a share in the mainland perfume market.
“What we have observed is there are a lot of kinds of fragrance specialists entering the market and winning consumers,” said Veronica Wang, senior leader at strategy consultancy firm OC&C. “Customisation is one of the key propositions for winning.”
