Hitting the right note

Whilst fragrance sales flounder in other parts of the world, Asia still offers opportunities for growth provided you target the right consumer, finds Emma Reinhold


Whilst fragrance sales flounder in other parts of the world, Asia still offers opportunities for growth provided you target the right consumer, finds Emma Reinhold

Asia’s fragrance market is as complex as it is conventional. With a consumer base spanning a varied geographical and economic terrain, fragrance tastes and habits in the region are the most diverse in the world. Yet despite these challenges the fragrance market in Asia continues to thrive, offering great opportunities to those who take the time to learn the intricacies of the market.

“Fragrance is seen as an achievable luxury in Asia,” says Micaela Bracaccini, manager of IFF’s Europe fine fragrance marketing team. “The highest socio-economic class is extremely brand conscious when buying fine fragrances. These are rich households who have the opportunity to travel outside their country and therefore are exposed to global brands.”

“Fragrance consumption in Asia is still growing compared to the west and it will continue to be impressive, however it will be a less crazy, more dynamic development; growth that is sustainable,” adds Andreas Storp, general manager, drom fragrances.

India and China have been a key driving force behind the overall growth of the cosmetics and toiletries industry and this rise is set to continue, according to Euromonitor International, with markets expected to double in size again between 2008-2013 due to expanding populations, coupled with a sharp rise in disposable income and increasing demand for western-style products and brands.

Recent research from Euromonitor does show however that the economic downturn has made consumers more cautious in their spending on cosmetics and toiletries, which undoubtedly will have hit commodities such as fragrance. Several countries including Taiwan and Japan saw a slowdown in growth of cosmetics and toiletries in 2008 and all eyes are on the masstige brands as consumers look to cut spending but are reluctant to sacrifice quality, according to Hui Hui Lim, research analyst, Euromonitor International.


“The economic crisis has hit Asia too and contract manufacturers producing for the US and Europe have been hardest hit,” says Storp. “Consumption is down, projects have been stopped and everyone is looking at zero risk right now. There is however a big hope that local businesses will stabilise. Local markets are not feeling the financial pinch so much and consumers are still spending here.”

Storp believes that the fine fragrance market has been hit most severely. “Sales of premium fragrances have been hit harder than the mass market. Consumers may have three to five fragrance bottles on their shelf and they are finishing them before purchasing any others. People are also travelling less and less as a result of the recession so duty free sales, an important market for fine fragrance, are down too.”

Mass market fragrance sales have suffered too as consumers on lower incomes also reign in their spending due to growing fears over unemployment.

“The economic crisis has been a strike to local mass market fragrance sales for local players in regular retailing channels where customers are usually middle to low income earning workers living in the cities or in suburbs,” explains Jessica Chor, marketing information manager, CPL Aromas (Far East). “It has happened to those Asian markets with significant export business to the west, where factories have closed down and workers laid off.”

According to CPL, mass market fragrance sales comprise more than 60%

of total fragrance sales in many Asian countries and represents the main pillar of Asia’s local fragrance market. However the economic downturn has ignited interest in less traditional retail channels such as direct sales, and as a result mass market fragrance sales are rallying.

“In Asia direct selling for mass fragrances is very popular,” Chor continues. “For this type of retailing there is another side to the coin – when the economy is down, direct selling business generally performs better, as witnessed in this economic downturn.”

And the overall outlook for fragrance is that it is slowly picking up. “The last two months have shown signs of recovery as a whole,” says Storp. “There are more travellers, more business people. People are less hesitant about spending.”

However Bracaccini is still cautious about some areas of the fragrance market. “A lot of players retreated from the industry, while others have turned to investing in the domestic market. The local fine fragrance market is in its infancy for now and although the market is very encouraging with quick volume growth, the base is still very small.”


Increasing the consumer base is vital for growing the fragrance market in Asia and young consumers are being touted as key to the continuing success of fragrance sales in the region. Young Asian consumers represent a growing proportion of the population and are being actively targeted by manufacturers.

“Young consumers represent the future of our industry, especially for categories like fine fragrance,” says Bracaccini. “These consumers will define the future through their purchasing behaviours.”

The purchasing potential of Asia’s young consumers is no better demonstrated than in China where according to the China Statistical Yearbook, 2007 there were more than 250 million people in China aged between 15 and 29.

“This group was born after China instituted its one-child policy in the late 1970s and grew up in the context of China launching its economic reforms and opening the world,” explains Bracaccini. “This young generation enjoys a staggering amount of purchasing power in China and unlike their parents they are the only child in the family and are cherished and spoiled by ‘six pockets’ [two parents and four grandparents]. Young consumers not only have money but their own perspectives on how to spend it. However much as they crave fashionable brands and foreign products, they do not blindly buy western brands or recklessly chase luxury symbols. Rather, they are savvy shoppers who look for quality at a good price.”

Luxury fashion brands have been the key beneficiaries of the growth in young consumerism, with fashion houses such as Dior and Chanel regularly topping the fragrance best seller lists. One particular recent success has been Coty’s Chloé scent, which has garnered a following right across Asia.

“Chloé is the big success in Asia right now, especially in Japan,” explain Marie Le Febvre, fine fragrance marketing director and Virginie Philippe, fine fragrance marketing manager, Takasago. “The name of the brand, the bottle and the advertising have all been key to its success but the juice, which is light and floral, a new floral rose interpretation, is very well liked and in accord with Asian tastes. Other big sellers with young women in Asia are Eclat d’Arpège and Incanto Charms by Ferragamo. And Gucci is very trendy right now.”

Lighter, fresher interpretations of heavier scents such as Dior’s J’Adore Cologne Florale and Miss Dior Chérie L’eau are also expected to appeal to Asian consumers according to Le Febvre and Philippe.

“Appellations like ‘eau’ and ‘cologne’ could work in Asia due to the climate. There is always a demand for freshness with a fruity or green effect,” they add.


Alongside fresh and floral scents, fruity gourmand notes continue to be popular with Asian consumers and new combinations of notes are helping to inject life back into the sector.

“The kitchen is still inspiring – basil, mint, lemon grass and combinations of fruits and spices and fruits and flowers are popular,” says Storp. “Frangipani is also a wonderful source of inspiration and citrus fruits such as lemon and orange and the Japanese yuzu have been popular combined with other ingredients to make it sweeter.”

“There have been more signature notes within the floral category, with fragrances being less transparent and more focused on a flower,” add Le Febvre and Philippe. “There is also a real boom in fruity notes with more diversity.”

While consumer tastes have not really wavered beyond the traditional light, fruity floral remit, there are signs that some Asian consumers at least are keen to expand their fragrance portfolio.

“Today’s Asian consumers are more open to try out and learn what the modern western standards of fragrances are. A sales person in Hong Kong told me that customers from China are buying modern chypres like Hermès’ Kelly Calèche if they are told they represent elegance and class. So it depends on how you convey the message of fragrances to the Asian consumer,” says Chor.

Asia’s fragrance market is set to continue to offer opportunities to local and western manufacturers providing they market their products accordingly. As Chor concludes: “Here is an emerging market with new customers who want to and can afford to reach out to more western fragrance brands and markets.”

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