Summary of Key Points
The perfume fragrance segment is one of the few areas in the current beauty industry that continues to experience high growth. International beauty giants (such as Estée Lauder and Puig) rely on their perfume businesses to drive performance, with the Chinese market being a key source of growth. Local brands (such as Wenxian and Guanxia) have broken away from the affordable price tag, positioning themselves in the mid-to-high-end market with Eastern culture, competing directly with international brands. The industry landscape is being reshaped, and the potential of the “scent economy” is enormous in the future.
Detailed Analysis
1. International Brands: Perfumes as a Lifeline for Performance
When skincare and makeup businesses experience fluctuations, perfumes have become a highlight for growth for international beauty groups.
- Puig (Spanish beauty group): Perfumes and fashion contribute 70% of its revenue, acting as a mainstay. The Asia-Pacific market grew by 20.9% in the first half of 2026, driven primarily by its perfume business.
- Estée Lauder: Previously struggling with performance, it turned a profit in the 2026 fiscal year thanks to a 12% increase in perfume sales, which was faster than growth in skincare and makeup. Its Le Labo and TOM FORD perfume lines have seen double-digit growth for several quarters in a row. Estée Lauder has even promoted its China CEO to a global management position, highlighting the importance it places on the Chinese market.
In short, the perfume business of international brands not only grows rapidly but also helps to support other areas of the company’s operations.
2. The Hot Chinese Market: “Emotional Consumption” as the Driving Force
Perfumes are not a necessity, but Chinese consumers are buying more of them due to “emotional consumption”—buying perfumes to make themselves happy, express their personality, or relieve stress.
- Data shows that the perfume segment is growing faster than the overall cosmetics market, indicating that perfumes remain popular even when the beauty industry as a whole is not doing well.
- For example, some people use unique scents to showcase their style, while others find comfort in the smells they like; these needs are making perfume consumption more sticky (i.e., consumers are more loyal to their perfume choices).
The Chinese market has become a driving force for international brands’ perfume businesses and a breeding ground for local brand success.
3. Local Brands’ Rise: From Affordable to Mid-to-High-End Players
Previously, domestic perfumes were cheap, but brands like Wenxian and Guanxia have changed this perception:
- Price Increase: They have positioned themselves in the 500-1500 RMB price range, competing with international brands like Zumarion and Le Labo.
- Core Strategy: They use Eastern culture to tell stories—using traditional Chinese ingredients like agarwood and cedar in their scents, and designing packaging with Chinese elements, as well as creating immersive experience stores where customers can smell the fragrances and experience the culture.
- Remarkable Success: Wenxian has grown by 200% annually since its establishment, with sales reaching 300 million RMB in 2025, and its number of stores has expanded from over 10 to over 60. Even L’Oréal has invested in the brand.
Local brands are no longer just substitutes for foreign brands; they are competing on the market with their cultural uniqueness.
4. Direct Competition Between Domestic and Foreign Brands: A Changing Industry Landscape
The Chinese perfume market was once dominated by international brands, but now local brands are gaining momentum, and consumers no longer solely recognize foreign labels.
- International Brands’ Response: L’Oréal’s investment in Wenxian and Guanxia shows that they recognize the strength of local brands and want to leverage Eastern culture.
- Advantages of Local Brands: They understand the cultural needs of Chinese consumers better (e.g., a preference for Eastern scents and Chinese aesthetics), while international brands have a mature brand portfolio (e.g., Estée Lauder with brands like Zumarion and Le Labo covering different price ranges).
In the future, there will be fierce competition between domestic and foreign brands in the mid-to-high-end market, leading to a more diverse and competitive industry landscape.
5. Future Trends: The Unlimited Potential of the “Scent Economy”
The report predicts that the Chinese perfume market will reach 51.5 billion RMB by 2029, with clear future directions:
- Greater Emphasis on Culture: Eastern scents, intangible cultural heritage, and cultural stories will become core competencies for local brands, shifting from selling products to selling culture.
- More Segmentation: The market will expand beyond perfumes to include products like incense sticks and aromatherapy.
- More Everyday Use: Perfumes will become more accessible, no longer just a niche luxury item but a daily item for improving quality of life.
In summary, the perfume segment is on the rise, and local brands have the potential to gain a global presence.
In One Sentence
The perfume fragrance segment is in a golden growth period, with international brands using it to stabilize their performance and local brands using culture to compete in the market. The “scent economy” is set to become one of the most promising areas in the beauty industry.