There’s a new ‘lipstick effect’ taking over Asia in 2022. Coined by economists in the early 2000s, the ‘lipstick effect’ is a term that denotes the willingness of shoppers to continue to buy less costly luxury goods, like lipsticks, in times of economic uncertainty, highlighting an underlying assumption that consumers will always buy luxury goods.
While that consumer sentiment rang true during Covid-19, it was the ‘fragrance effect’, not lipstick, that played out in Asia during the pandemic.
According to an NPD Group survey, the use of face masks rendered items like lipsticks obsolete, with consumers shifting to fragrances — often used as instant mood-lifters — as their go-to signature purchase to treat themselves and others during lockdowns and restrictions.
Of those surveyed, some 50 percent of respondents said they purchased fragrances as a treat for themselves during the pandemic, while another 20 percent said it was a gift for someone else.
And that trend isn’t about to change. According to Statista, revenue in the prestige fragrances segment in Asia is set to total US$3.177 billion in 2022, with the market expected to grow annually by 6.24 percent until 2025, as the market for fragrance products continues to see unprecedented expansion both in size and type of products, including perfumes, scented sticks and fragrant skincare.
Retail in Asia takes an in-depth look at fragrance in Asia, outlining key consumer trends and behaviours within key markets in the region.
China is the largest market in Asia for fragrances, registering sales of US$1.2 billion in 2020. And, with some 20 million consumers who have the habit of using perfume regularly, China is poised for world-leading growth, according to a report by market consultancy iResearch.
According to data from Euromonitor, the compound annual growth rate of China’s fragrance market reached 14.9 percent between 2015 and 2020. But that rate is expected to jump to 22.5 percent over the next five years, far surpassing the global annual growth rate of 7 percent. By 2025, China’s perfume sales are expected to reach US$4.7 billion, thanks to an increased interest in the fragrance category and a desire to purchase niche brands.
According to Bluebell Group’s Asia Lifestyle Consumer Profile report* released in October 2021, some 76 percent of Chinese consumers said they were more interested in shopping for a new fragrance compared to the last 12 months, second only to fashion, at 78 percent of respondents.
Likewise, 46 percent of Chinese respondents said that fragrance was their top beauty product category in 2021, beating out serums and oils, moisturisers and creams, body care products, cleansers and toners, the report added.
Fragrance shoppers in China are most heavily influenced by the digital landscape, the report said. Social media is the most influential channel for fragrance purchases in China, followed by shopping/e-commerce websites, a brand’s official website, recommendations from family and friends and lastly, the in-store environment of a brand’s boutique.
Chinese consumers hold a traditionalist view of luxury, which holds fast to brand recognition and status. Therefore, niche brands are rarely seen as a luxury option for Chinese shoppers, except when it comes to fragrance. Some 69 percent of Chinese consumers surveyed said they are more interested in exploring niche fragrance brands, providing crucial opportunities for lesser-known fragrance brands to expand into the nation.
According to global market watcher Euromonitor, Korea’s fragrance market grew 36.4 percent from 2018 to 2019, and is projected to reach 650 billion won (US$547.5 million) by 2023.
In 2021, some 60 percent of Korean consumers said they were more interested in shopping for a new fragrance compared to the last 12 months, according to Bluebell’s report.
Likewise, 40 percent of Korean respondents said that fragrance was their top beauty product category in 2021, beating out haircare products, moisturisers and creams, and body care products.
When shopping for fragrance, Koreans are influenced most by both in-person information and e-commerce platforms. Fragrance recommendations from friends and family ranked top for Korean shoppers, equal to shopping/e-commerce websites and online search portals.
Not as traditionalist in their perception of luxury, some 73 percent of Koreans said they were interested in exploring niche brands within the fragrance market, serving as the second-most accepting market for niche luxury fragrance brands, behind Hong Kong.
In 2022, Hong Kong’s fragrance segment is said to be worth some US$248.6 million, according to Statista, with the market expected to grow annually by 2.74 percent CAGR 2022-2026. While the region’s growth rate is lower than the Asian average of 6 percent, Hong Kong’s fragrance is still one to watch, especially for niche luxury brands trying to break into Asia’s fragrance market.
Fragrance was the fourth most popular beauty item in Hong Kong among those interviewed, according to Bluebell’s report, with 31 percent putting it in the number one spot. Body care, and serums and oils took out the top two rankings for Hong Kong shoppers.
Looking ahead, some 67 percent of Hong Kong consumers said they were more interested in shopping for a new fragrance in the future compared to the year prior.
Hong Kong shoppers are the most open to niche luxury brands when it comes to fragrance, with 75 percent of those surveyed saying they were interested in shopping niche fragrance brands when purchasing in the future.
When shopping for fragrance, Hong Kong consumers, like neighbouring China, are heavily influenced by the digital landscape. Social media was the most influential channel for fragrance purchases in Hong Kong, followed by recommendations from family and friends, shopping/e-commerce websites and search portals, and a brand’s official website.
Fragrances were the second-most popular luxury purchase in Southeast Asia in 2021, according to the e-commerce platform, Zalora, who said sales of fragrance in the region were one of the best-selling luxury items, only surpassed by wallets and purses, as outlined by its TRENDR report. Fragrance was, however, the top beauty category for men last year, Zalora added in the report.
While fragrance proved popular in the luxury category, it failed to rank highly as a popular beauty choice among Southeast Asian consumers in 2021, according to Bluebell’s report, with less than 32 percent of consumers saying it was a top beauty choice for them personally.
However, some 72 percent of Southeast Asia consumers said they were more interested in purchasing fragrances moving forward, compared to the twelve months prior, according to the report.
When browsing, Southeast Asian shoppers were open to niche luxury brands when it comes to fragrance, with 72 percent of those surveyed saying there were interested in shopping niche fragrance brands, as opposed to well-known luxury brands.
When shopping for fragrance, some 32 percent of Southeast Asians said they were influenced the most by a brand’s official website, followed by social media and shopping/e-commerce websites, said Bluebell’s report.
Japan’s fragrance market is estimated to be worth US$629.7 million in 2022, with the market expected to grow annually by 4.75 percent from 2022 to 2026, according to Statista.
Close to half of Japanese consumers are more interested in purchasing fragrance, compared to twelve months prior, according to the Bluebell report. However, less than half of Japanese consumers surveyed are interested in purchasing a niche fragrance brand, exemplifying their traditional views of luxury, the report added.
Social media is the most influential channel for fragrance shoppers in Japan, followed by a brand’s official website and recommendations from friends and family, the report added.
*Bluebell’s Asia Lifestyle Consumer Profile study is based on an Asia-wide survey covering 2,100 premium lifestyle consumers across 6 markets. The average age of those surveyed was 35 years old with a minimum spend of 1,200 euros in a twelve-month period.