Co-branded fragrances are now becoming the first hand to be created by street fashion brands when it comes to cross-border collaborations. China is expected to become the world’s second-largest high-end perfume market after the US in the next three years with huge growth potential. Fragrances are still the fulcrum that can be relied upon for fashion brands that tend to enlist Chinese consumers.
Co-branded fragrances are now becoming the first hand to be created by street fashion brands when it comes to cross-border collaborations. Kiko Kostadinov, who is quite famous in the fashion community, chose to join hands with the famous fragrance brand retaW from Tokyo Aoyama last year to launch the first solid perfume KK.0001 SOLID PERFUME.
When it comes to the intersection of fashion brands and perfume brands, the most effective case is the collaboration between Off-White and Byredo. Although both brands belong to a niche category by their nature, both have managed to build awareness among the general population and quickly developed a relatively large user base by virtue of social media.
In the third quarter of 2018, Off-White topped fashion platform Lyst’s list of the world’s most popular brands, beating out the popular brands Balenciaga and Gucci. It has since reigned supreme several times in a row. The official account of Byredo has 480,000 followers on Instagram, far more than similar brands such as Serge Lutens and L’ARTISAN. Now there are over 30,000 notes on the Chinese social media platform Xiaohongshu when Byredo is searched.
For the main clientele of men, perfume has never been a fixed category of the brand, let alone a customary partner. But now fashion brands have turned their attention to perfume brands. On the one hand, they perhaps tend to create unexpected co-branding in order to harvest a huge amount of social voice. On the other hand, some industry insiders have pointed out that the reason why fashion brands are turning their hearts to perfume is largely due to the fact that the neutralization of cosmetics like perfume is becoming more and more mainstream in the industry.
In a sea of beauty categories, fashion brands are overwhelmingly in love with perfume rather than others, which may also be related to the current state of consumption in the era of the pandemic. In the past, when the economy was in the doldrums, the “lipstick effect” would come as expected – consumers with shrinking wealth would choose to buy cheap non-essential goods represented by lipstick to satisfy their shopping desires and gain spiritual comfort. But under the pandemic, wearing a mask became a mandatory social requirement, which undoubtedly made makeup meaningless. In contrast, perfume, which is not affected by the quarantine measures, has become a new choice for self-pleasing consumption.
According to the 2021 White Paper on China Fragrance Industry Research jointly published by the omnichannel brand management company Eternal Group and Kantar Consulting, the fragrance is the fastest growing sector of the cosmetics category in the global market. A review of the 2021 financial reports of major groups also shows that sales in the fragrance category are showing a clear upward trend, with LVMH’s 2021 annual results showing that sales in the fragrance and cosmetics division rose to $7.336 billion, an increase of 26%. L’Oréal’s previously announced its results in 2021 mentioning that the high-end cosmetics division overtook the mass cosmetics division to return to the number one position in the group with excellent sales of $13.7 billion by virtue of the strong development of the fragrance business. Coty Group also enjoyed the fragrance dividend. In the second quarter of fiscal year 2022 ended December 31, 2021, the fragrance sales of the high-end consumer division maintained their double-digit growth momentum, with the launch of new products that were among the top sellers in their main markets.
The China fragrance market is small compared to the global market but is showing strong growth. According to oIBP, the Chinese fragrance market will grow at a CAGR of 14.9% between 2015 and 2020, climbing to 22.5% over the next five years, while the global market is expected to grow at a CAGR of around 7% over the next five years, only one-third of the Chinese market.
Chinese male consumers are a strong driver of the scent economy. According to market research firm NPD Group, China’s men’s fragrance market is expected to grow by 90% for the full year 2020, with sales increasing by as much as 117% year-on-year in the first quarter of 2021. According to official data from Chinese e-commerce platform Tmall, search terms related to “men’s” in the fragrance category have risen about 270 percent in the past year, with roughly 75 percent of male users buying unique fragrances.
According to a new study by Japanese fragrance manufacturer Takasago, China is expected to become the world’s second-largest high-end fragrance market after the United States in the next three years with huge growth potential. According to the data, sales of high-end perfumes in China grew by 15% in 2020 and 30% in 2021. This means that fragrances are still the fulcrum that can be relied upon for fashion brands that tend to enlist Chinese consumers.