According to Huang Xuelei, author of ‘Scents of China: A Modern History of Smell’, China’s history of scent dates back to the incense culture that was a big part of the imperial court. However, it was in the 1930s that the first perfumes started appearing in China, when perfume manufacturers used natural and local smells. “They used local smells to keep costs down but also because of the familiarity between product and consumers. Physical exposure to a certain scent certainly attracts people to it. Today, traditional or indigenous Chinese smells are still very much relevant to the consumer trends,” she says.

Elisa Harca, CEO of China Marketing Agency Red Ant Asia, agrees that historically, China has had a long-standing preference for natural aromas such as incense, herbs and flowers rather than artificially created scents. “The use of perfumes and fragrances was not deeply ingrained in Chinese culture, which posed a challenge for the fragrance industry,” she says.

“However, China’s beauty standards have evolved, and there is a growing emphasis on personal grooming, fashion and self-expression. Fragrances are considered an integral part of one’s personal style and image, leading to increased demand for perfumes and colognes.”

Covid was a big turning point for the scent industry in the modern era. Harca explains that as people spent more time indoors, they were looking to “enhance their living spaces and create a soothing atmosphere.”

“Home fragrance products not only offer pleasant scents but also contribute to a therapeutic environment, aligning with the concept of the ‘healing economy’,” she explains.

Huang agrees that Covid was an important trigger, not only as a way to enhance the home but also to find a new form of self-identity. “China had a very, very strict lockdown [during Covid], and people felt a need to find connectivity. Subconsciously, they regarded smell as a way to connect,” she says. “But at the more conscious level, people found lockdown boring, and self-care and home care become a higher priority for them. The joke was that as people were wearing masks, they didn’t need to wear lipstick, so instead they started to wear perfume instead,” she says.

However, Huang argues that much of the surge is related to the confidence of the modern Chinese consumer. “They are more confident in terms of finding diversity and finding their own identity, and scents and perfumes are related to that trend,” she says.

“Some people wear Chanel No. 5 or those iconic brands for status – and they are still selling very well – but it is definitely a younger generation of consumers who want to have their own identity who are developing consumer trends, tastes and preferences,” says Huang.

Since the Covid boom, Western brands have been aggressively pushing their products into the Chinese marketplace. How much of that is demand for the product from consumers, versus brands trying to build a new perfume marketplace in China?

Fragrance distributor Julie Shah argues that although the rising middle class allows for more consumers, it is the brands that are leading the growth of the sector rather than consumer demand. “A RMB 1,400 perfume is still very expensive for the majority of the Mainland customers,” she says. “And fragrance is still not worn on a daily basis; it’s not deeply entrenched in the culture as it is in the Middle East for example. Time will tell if fragrance becomes a part of day-to-day life.”

One of the international brands that has recently launched in China is the heritage British fragrance brand Creed. Creed entered the Chinese market in 2021 via TMall during the intermittent Covid lockdowns before opening 14 physical stores the same year. Working with Harca’s Red Ant agency, they have had a number of successful collaborations and launches, including releasing the ‘scented art toy’ which, says House of Creed’s CMO, Giles Gordon, “will live physically in our stores across the world, in 3D video assets across our owned and earned media, and virtually in the metaverse with China’s leading virtual KOL, Ayayi.”

A Creed store in Wuxi, Jiangsu (Photo: Creed/Xiaohongshu)

Creed’s success, according to Harca, is due to the fact it has a high-quality product with a genuine story. “They are steeped in quality, history and craftsmanship, and have a reputation for excellence. Hence, their basis is solid. Pre-market entry, they had global success, and this translated into appeal to the Chinese consumers as many top Asian celebrities were known to be fans,” she says.

Embracing local culture is something that not all international brands have done successfully, especially in an era of patriotic purchasing (aka guochao). This has created space for a number of domestic brands to launch – some of which are really giving international brands a run for their money. To Summer and Melt Season are two of the better-known Chinese brands to leap into the growing market.

“These brands have great narratives about their products,” says Huang. “At the To Summer store, they have a story around each product. A few lines of poetry, and then it also gives you fragrance notes. The notes don’t just say ‘lemon, apple’ and so on, they describe it as ‘the morning sunshine shining through the skin’ or something similar. I think this kind of narrative is very important for consumers,” she adds. Huang also says that the detail in the packaging and bottles and the in-store experience are all part of the brand’s identity.

One of the most successful Chinese fragrance brands is Melt Season. Launched in 2021, Melt Season has since announced a minority equity investment from Estee Lauder Companies (in December 2023) and is now one of the most recognised domestic scent brands in China.

Lishi Ni, the CEO of Melt Season, tells FOCUS that the company has plans for a number of new store openings this year. “The emphasis of Melt Season is on brand expression depth: beyond the surface of Asian culture, supporting the inheritance of Chinese intangible cultural heritage craftsmanship, local culture, cooperation with artists, and exploring activities and collaborations in various art forms to convey an ‘Oriental charm’,” she says.

Ni says that with the initial launch of many fragrance brands in recent years, the market has changed from price wars to “healthy competition” and that brands work collaboratively on fragrance industry exhibitions and awards “to jointly promote the overall progress and growth of the industry.”

Shah agrees that domestic Chinese brands are creating designs that are more curated for the domestic market, as well as scents that have a stronger memory base for local consumers. “Right now, purchasing decisions depend on price and scent quality,” she says.

According to Melt Season’s Ni, Chinese perfume brands are more restrained in brand narrative and fragrance expression. “Chinese perfume brands prefer to use Chinese local raw materials when creating, and the creative inspiration and naming of products are drawn from Eastern culture, which brings more imagination and interpretation space to everyone,” she says.

Roaming Wind is a Melt Season perfume inspired by wild grassland landscapes (Photo: @MELTSEASON_OFFICIAL/Weibo)

Harca agrees that there is a big difference between Chinese consumers and, say, British fragrance consumers. “Chinese and British cultures have different olfactory traditions and associations. In China, there is a deep-rooted appreciation for natural scents such as incense, herbs, and flowers, which have long been used in traditional Chinese medicine and cultural practices. British consumers, on the other hand, have a long history of using perfumes and fragrances as part of their grooming and personal care routines.”

Local scents, says Huang, are very important when selling to a Chinese audience. For example, “Japanese yuzu is very popular now, not only in the perfume sector, but also in the culinary industry too. Chinese traditional floral fragrances… like osmanthus, magnolia and gardenia, are also very high on the list. And these can increasingly be seen being used in flavoured coffees in China,” she says.

China has become the litmus test for whether brands have what it takes to cut through in the crowded fragrance market

The ingredients used differ between audiences, but also, according to Ni, Chinese consumers are more confident in supporting local Chinese brands as they have gradually become disenchanted with international perfume brands. “There is a high willingness to pay for cultural values and high-quality products delivered by local brands,” says Ni. “At the same time, the aesthetic and demand of Chinese consumers are also constantly improving, and they have higher and higher requirements for products and brands, which is tantamount to continuously improving the entry threshold and competitiveness of Chinese perfume brands,” she adds.

Melt Season recently partnered with the Cannes Film Festival in a bid to grow its international brand, so how likely is it that we will see Chinese fragrance brands on the shelves of UK shops? According to Shah, it is still quite early for these new domestic brands to crack the international market. “The quality needs to improve before becoming global, but I think it’s only a question of time before some of these brands expand outside,” says Shah.

But Harca argues that we are only just at the start of this journey. “There is still a strong appetite from Chinese consumers for new, interesting, niche, luxury fragrance brands. The market is, of course, increasingly competitive, but this just means the stronger brands will prevail. The weaker ones with no clear DNA should probably look at other, less developed markets. China has become the litmus test to see whether brands have what it takes to cut through,” she adds.

The post How to tap into China’s booming fragrance market appeared first on Focus - China Britain Business Council.

How did you end up writing a book about scents?

I read Alain Corbin’s book [The Foul and the Fragrant: Odor and the French Social Imagination] and thought it was something really fascinating. I was inspired. Before I started this project, I hadn’t paid much attention to smells, but I was intrigued as to how smells triggered memories and emotions and engaged with historical events in modern China.

Why do you think there has been such a surge in smell-related publications recently?

When I started studying the subject 12 years ago, it wasn’t a particularly popular subject. The study of sensory experiences and cultures started a few decades ago, but today this surge of smell studies is in part thanks to Covid-19. There is a strong correlation with people’s experience of Covid as many people lost their sense of smell – including myself when I was writing this book – and we also felt isolated without much human contact and interaction. We suddenly came to know how it felt living in a world without smell and other sensory input from interacting with others.

Why have there been so few publications on scent in China?

Sensory study is still quite Eurocentric, a Western-focused field that started in North America, and China has been a little bit slow in catching up. Chinese language publications so far are more focused on historical Chinese incense culture and are mainly descriptive. So I wouldn’t say there aren’t publications in China, they just have a different kind of approach and haven’t reached an international readership.

What are the main takeaways of your book?

My book is a cultural and social history of smell in China. I start with the eighteenth century by focusing on the perfume culture in everyday life. Then I trace modern environmental deodorization and the perfume industry, which changed our perception of bodily odour and our threshold of olfactory tolerance. I also look at the Mao era and propaganda language, which uses smell as a tool for political purposes. Certainly, it’s not just Mao who has used smell language this way; it’s also seen in other cultures – Christian texts describe paradise as fragrant whilst hell is evil and stinky. It’s quite universal to use olfactory metaphors to understand moral dichotomies. But in Mao’s case, he’s exceptionally good at using the kind of vivid language that everybody can relate to. If you say, ‘this class enemy is really stinky’, then for the masses, for people who are not highly educated, they can relate to that.

There has been something of a boom in the modern fragrance industry in China, why do you think that is?

I think Covid is an important trigger to that surge. China had a very strict lockdown, and people felt a need to find connectivity. Subconsciously they regarded smell as a way to connect. But at the more conscious level, people found lockdown boring; selfcare and home care became a higher priority for them. Burning incense and using home scents and diffusers really helped cope with lockdown, and the trend seems to have stayed as people continued to work from home more.

What about personal scent products? Has that evolved much in the last few years?

Definitely. You could argue Covid kickstarted it, as the joke was that when people were wearing masks, they didn’t need to wear lipsticks, so instead, they started to wear perfume. But overall, I think it’s related to the growing confidence of Chinese consumers in terms of finding diversity and their own identity. Beyond visible physical appearance, they seek more subtle self-expression through scents and perfumes.

Some people wear Chanel No. 5 or those iconic brands for status, and they are still selling very well. But a younger generation of consumers want to have their own identity by developing new consumer trends, tastes and preferences. The current Chinese perfume market reflects this changing landscape.

As China’s perfume culture is a much newer phenomenon, is China’s smellscape more open to new influences than the Western smellscape?

Since China’s perfume consumers are predominantly younger generations of society, they are perhaps more open to innovative and creative perfume types, but Chinese consumers are still attracted to smells they have had cultural and physical connections with. In my chapter about the 1930s Chinese perfume industry, I explained why Chinese manufacturers used a lot of indigenous fragrances, such as osmanthus, jasmine and magnolia. It was not only for the purpose of keeping costs down but also because consumers’ familiarity with these fragrances boosted sales. Physical exposure to a certain scent certainly attracts people to it. Traditional or indigenous Chinese smells are still very much relevant to consumer trends today.

What are the more popular scents in the Chinese market?

Dongfangxiang, or Oriental fragrances. There are approximately six categories. Japanese Yuzu, the concept of using grapefruit or citrus, is very popular now, not only in the perfume sector, but also in the culinary industry too. Chinese traditional floral fragrances from plants like osmanthus, magnolia and gardenia are also very high up the list. These are even used in flavoured coffees in China.

Other categories include Chinese herbal medicine, such as Xiangfuzi, and, unsurprisingly, woody smells, such as popular sandalwood. Then tea flavours are certainly favoured, though it’s difficult to distil essences from tea leaves. Most surprising is fungal fragrances. Of course, the Chinese like mushrooms such as the Mu’er and the Matsutake mushroom, but it’s hard to imagine how they smell in a perfume.

Is the Chinese fragrance industry a female-led industry?

We traditionally associate fragrance to women but in Chinese literati culture, the art of incense is predominantly a male skill for Confucian scholars to master. During the Song Dynasty, scholars compiled manuals of incense called Xiang Pu, explaining how to make and mix incense. But in the contemporary era, male scents are mostly limited to middle class office workers, although Gen Z consumers will buy perfumes as part of the package of their identity.

The three big Chinese brands everyone knows are Documents, Melt Season and To Summer, why do you think they do well?

These brands have great narratives about their products. At the To Summer store they have a story around each product. A few lines of poetry echo the name of the fragrance. Even the fragrance notes are not just lemon, apple and so on, but are described as something like “the morning sunshine shining through the skin”. So they give you a concept of how you feel it. I think this kind of narrative is very important for Chinese consumers. Also, they pay careful attention to the packaging – the bottle, the stopper, and the box are tastefully designed, making these brands very giftable. The things beyond the perfume – the aesthetic value, the experience and so on – are components of a unique identity, which appeals to the taste of young Chinese consumers.

Find out more about the Chinese fragrance market at CBBC’s latest China Chat on 16 May 2024

For anyone with a nose for the next big thing in the beauty industry, China’s fragrance market has a scent of opportunity that is hard to miss. China’s perfume market is projected to grow to £3.7 billion by 2025, a noteworthy increase from £1.5 billion in 2021. The fragrance sector in the Middle Kingdom is exploding with opportunities for new product development and new customer acquisition, as well as intriguing brand collaborations and lucrative tie-ups.

Huang Xuelei will join branding consultant Julie Shah and Elisa Harca, Co-Founder & Asia CEO, Red Ant Asia, at China Chat to share strategic insights on working in and with the Chinese fragrance market for UK brands.

Click here to register

The post Huang Xuelei discusses her new book, Scents of China: A Modern History of Smell appeared first on Focus - China Britain Business Council.

Despite a relatively late start, China’s perfume and fragrance market has been catching up with the global market at full speed in recent years.

In 2021, retail sales of high-end perfume products in China recorded the fastest growth in a decade, pulling off an increase of 33% year-on-year – and leading market research institute Euromonitor International to dub 2021 the beginning of China’s “smell economy”.

On one hand, the prolonged impacts of the Covid-19 pandemic on mental health have contributed to the growth of the perfume market, with more young Chinese consumers seeking scented-based remedies to reduce anxiety and lift their mood.

On the other hand, strict Zero Covid protocols such as wearing masks in public places and repeated lockdowns and stay-at-home orders have dampened the demand for make-up products like lipstick, and instead pushed consumption desire towards perfume and fragrance. Many young buyers feel that perfume not only satisfies their emotional needs but also expresses their individuality. As a result, cosmetics brands have been doing their best to readapt their offerings in response to the consumer shift.

Up until three years ago, international luxury brands dominated the Chinese perfume and fragrance landscape. But now the tables are turning, and the marketing is seeing the rise of homegrown perfume brands such as Documents, To Summer and Scent Library. These brands have been taking on traditional foreign perfume makers like Chanel and Jo Malone with unique Eastern scents. Unlike their Western counterparts, these Chinese brands are curating more subtle scents using oriental ingredients such as lotus, bamboo and mugwort. These scents cater to the olfactory preferences of China’s young consumers, while also tapping into the Guochao trend, since the locally-grown plants are synonymous with Chinese literature and cultures, benefitting both branding and storytelling.

Chinese perfume brand Documents has a signature ‘zen cool’ aesthetic (Source: @documentsperfume on Instagram)

According to a recent survey of 1,400 regular perfume buyers by Chinese market research group iiMedia, over 60% were in favour of these Eastern aromas, which have “diversified their choices”. The responses also reflected that floral and fruity fragrances were losing their appeal among savvy young Chinese consumers, who are constantly seeking “something different”. This has also created opportunities for local brands to capitalise on these so-called niche fragrances and resonate with their target audience.

In light of the market boom and the emergence of local market challengers, internationally renowned names have taken different steps to ensure that they don’t miss out on this market prospect. Earlier in September, global beauty giant L’Oréal saw the first venture of its China fund, Shanghai Meicifang Investment, go to Chinese luxury perfume house Documents, which is supported by L’Oréal’s corporate venture capital fund BOLD (Business Opportunities for L’Oréal’s Development).

Following this strategic move, L’Oréal also sought to grab a slice of the burgeoning market by bringing Prada’s first perfume store in China to Shanghai, opening a dedicated store in the upscale Réel Mall in Jing’an (L’Oréal Group is responsible for the creation, development and distribution of luxury beauty products for Prada). Also eyeing China’s perfume market potential is South Korean beauty brand Tamburins. Under the umbrella of luxury eyewear brand Gentle Monster, Tamburins debuted its first multifunctional perfume line on the brand’s WeChat mini program and one of China’s largest e-commerce platforms Tmall, just a few weeks ahead of China’s largest annual online shopping extravaganza, Singles’ Day (aka Double 11 or 11.11).

These shrewd moves have the potential to bear fruit in the long run, considering perfume and fragrance application is fast becoming part of the lifestyle lived by China’s Gen Z and Millennials, with people living in Tier 1 and Tier 2 cities unsurprisingly leading the consumption trend. This has produced an increasing number of regular perfume users, with over 60% aged between 24 and 40 years old reporting they use such products several times a week and 17.5% are wearing them on a daily basis, according to findings by iiMedia. In addition, restricted movement under China’s Zero Covid policy has broadened the range of potential consumer scenarios to include home fragrances, aromatherapy and body fragrances.

With applying perfume and fragrance becoming increasingly commonplace amongst China’s younger consumers, the market is projected to hit RMB 30 billion (£3.72 billion) by 2025. This demand has prompted both market-leading international brands and emerging local brands to constantly innovate their scent offerings. On top of this, it is crucial for market players to broaden their product ranges and double down on efforts to develop subcategories in order to cater to the varied needs of this lucrative demographic.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research services can help you build knowledge and understanding of the Chinese market prior to investment.

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