Global fragrance and perfume supplier Symrise disclosed its financial report of the first quarter in 2022 with its sales rise of 14.9 percent to $1.16 billion up 14.9%. Lao Shuquan, Sales and Marketing Director of Symrise Greater China, the Chinese cosmetic industry has grown rapidly in the last 10 years thanks to both the huge consumer market and consumer upgrading.
On April 27, 2022, Symrise, a global fragrance and perfume supplier, has released its financial report of the first quarter in 2022(from January to March in 2022). It showed that its sales growth up by 14.9% in reporting currency during first quarter and the group sales increased to $1.16 billion with organic growth of 8.3%.
The group commented on its performance in Q1 of 2022 as made a successful start into fiscal year 2022. And it targeted for 2022 and medium-term goals until 2025 confirmed as it continued to target organic sales growth of 5 to 7 % with an expected EBITDA margin of around 21 % for the current fiscal year.
The ordering behavior of our customers clearly indicates that consumers have once again become more active with the reduction of many Coronavirus restrictions. This applies to travel and to areas like gastronomy and leisure. As a result, demand has increased for application areas such as sun protection and fine fragrances” said Dr. Heinz-Jürgen Bertram, Chief Executive Officer of Symrise AG. “As the year progresses, we will see an increased level of volatility in the business environment due to the war in Ukraine and the ongoing battle against the pandemic. Nevertheless, we expect reliable demand and are convinced that we are well positioned for the coming months.
In terms of segments, Scent&Care, the fragrances, perfumery applications and cosmetic ingredients business, generated sales of $441.8 million and grew by 12.4 % (Q1 2021: $393.2 million) year-on-year. Sales increased organically by 4.9 %.
In the financial report, Symrise still remains highly expectation to its future. It stated that in spite of the current volatile market environment resulting from the war between Russia and Ukraine, the global supply disruptions and the ongoing tangible impacts of the Coronavirus pandemic, Symrise considers itself well-positioned to continue its profitable growth course. The company has confidence in its robust business model, its diversified portfolio of applications and its broad regional presence and customer base.
Symrise is a global supplier of fragrances, flavors, cosmetic active ingredients and raw materials, and functional ingredients for food to customers in the fragrance, cosmetics, food and beverage, and pharmaceutical industries, as well as nutritional supplement and pet food manufacturers.
Having been in the Chinese market since 1982, Symrise’s long experience in innovative research and development has met the cosmetic industry’s need for cutting-edge, effective and proven ingredients.
According to Lao Shuquan, Sales and Marketing Director of Symrise Greater China, the Chinese cosmetic industry has grown rapidly in the last 10 years thanks to both the huge consumer market and consumer upgrading, as well as the joint efforts of all upstream and downstream companies. Symrise keeps up with the development of the Chinese market and continues to cultivate the Chinese market, and now China has jumped to be the third largest market for Symrise in the world.
In addition to serving multinational beauty groups such as L’Oreal, P&G and Johnson & Johnson, Symrise also pays more and more attention to emerging beauty brands in China, and has entered into close cooperation with SkinFuture, Lucenbase, WIS and Saselomo, expressing its confidence in long-term development and deep localization in China.
Symrise also vigorously develops its fragrance market in China. On May 18, 2020, the company announced on its official website that it opened its largest personal investment, investing $52.73 million in a new production site for flavors and fragrances in Nantong China. The company said that Asia remains the center of growth for the global economy. It makes sense to expand the production of spices and condiments in the rapidly expanding Chinese market. Over the past decade, the company has grown by an average of about eight percent a year. China accounts for six percent of total sales, making it Symrise’s third largest revenue-generating market after the United States and Germany.
Yao Wenzhong, vice president of Northeast Asia for Symrise Shanghai, has said that “unlike the fragrance category, which has an uncertain future, home fragrances, especially flameless fragrances, have a better future.” He explained that the frequency of Chinese consumers use perfume is too low, but the fragrance itself has the characteristics of volatile, natural consumables. Once consumers open and use it, it is easy to form a habit and repurchase, and the consumer stickiness is relatively strong.
China’s leading omnichannels brand management company for beauty and optical products, Eternal Group, has released a White Paper on China Fragrance Industry Research, which indicates that fragrance has become the fastest growing segment in the global cosmetics category. The Chinese fragrance market is even at a fast speed. In the next five years, China is expected to become one of the most important incremental markets in the global fragrance market.
oIBP data showed that the Chinese perfume market has a compound annual growth rate of 14.9% from 2015 to 2020, and is expected to be 225% in the next five years. By 2025, the retail sales of the Chinese perfume market will reach $4.548 billion, while the global market will grow at a compound rate of about 7% in the next five years reaching $65.51 billion in 2025. The comparison showed that in the next few years, the growth rate of the Chinese market will be about three times that of the global market with huge development potential.
International cosmetic giants are even betting resources in the Chinese market to strengthen the layout of their brand matrix. Editions De Parfums Frederic Malle, By Kilian of Estee Lauder Group entered China in 2020. L’Oréal Group’s MUGLER, VIKTOR&ROLF entered China in 2021, and Maison Margila entered China in 2019.
Eternal Group’s analysis of the Chinese perfume market showed that the high-end perfume market has huge growth opportunities and new brands are ushering in a more friendly development environment (more open attitude of consumers). To be commercially successful, brands need to establish a clear brand positioning and build a stronger emotional connection with consumers. Brands should also actively embrace digital technology to create the ultimate experience.
