omniture Analyzes Chinese Perfume Market Development

2009-11-05 22:30 558

BEIJING, Nov. 5 /PRNewswire-Asia/ --, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, analyzes the development of the Chinese perfume market.

Himfr's analyst says that the fragrance market is worth 25 billion U.S. dollars as an industry, with more than 300 new products listed each year. Overseas, fragrances have long been involved in all aspects of life, from children's educational supplies, to a variety of daily necessities; in some countries, such as France, perfume is even considered an indispensable basic necessity. In such a business, full of magical charm, it's not difficult to see why people love perfume.

People have growing expectations for perfume. In 2006, even for high-end brands such as Chanel, Estee Lauder and Dior, perfume sales in China were only about 10 million U.S. dollars, while Europe generated 9 billion U.S. dollars, the United States 4 billion U.S. dollars, and Asia's largest market, Japan, 50 million U.S. dollars. China population accounts for 20 percent of the world but only one percent of the world's perfume sales, which is hard to imagine.

How can this market be developed? The final consensus is that we must break down the old barriers that have impeded the growth of the fragrance market and help generate a demand for fragrances among Chinese consumers.

First, price barriers must be broken. Perfume must evolve from an imported luxury good to a part of daily life. Consumers have started to distinguish good perfume from bad, and prefer high quality, but for most consumers, perfume is still considered a luxury good. Chanel, Dior ( ) and other international perfume brands cost about 500 - 1000 RMB yuan for a 50 mL bottle, which is expensive even for white-collar workers. Price is still an important impediment to product penetration, and how to balance brand value and price and create truly highly cost-effective fragrance products that may directly stimulate larger consumer demand are questions perfume-makers must answer in order to achieve market penetration and scale upgrading.

Second, the main obstacles must be overcome: in the current market situation, the analyst analyzes that the largest consumer group of fragrance products is 30-50 year old middle-aged women. Because consumers in this age group have a higher income, consumption can be more of an option. But from another angle we can see that the fragrance market is in fact far from mature; due to the impact of consumer attitudes, there is an emerging group of consumers. For example, for the men's fragrance market, China's culture places value on subtlety, and Chinese men generally prefer a light perfume, so with the great volume of cologne fragrances, one can expect China's culture to influence men's fragrances of choice.

Third, design barriers must be broken: the latest design concepts from top designers and the latest production process are often used at the international level in the packaging of the best and most established perfumes and cosmetics. This is important for the overall creativity and product development capabilities of enterprises. In contrast, many of the smaller Chinese-made perfumes imitate top perfume packaging, bottle type, color and scent. Some manufacturers use low-cost scent in their raw materials to reduce costs, and cannot guarantee the quality of the products, so they have a hard time establishing brand recognition.

No one doubts the Chinese market has great potential. Himfr's analyst predicts that by 2010, China will have 25 million consumers with the ability to purchase luxury goods, and total spending will reach 200 billion yuan.

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