Shen Wan Hongyuan: China's perfume market has broad room to expand, and domestic brands accelerate breakthroughs

The Zhitong Finance App learned that Shen Wan Hongyuan released a research report saying that the size of China's perfume market is about 30 billion yuan in 2025, and is expected to exceed 51.5 billion yuan in 2029. The compound annual growth rate is about 14%, and there is plenty of room for improvement. In the competitive landscape, international brands still dominate, and e-commerce with domestic products lent content to break through at an accelerated pace. Domestic beauty groups have stepped up the fragrance circuit, and it is recommended to focus on listing targets with a differentiated layout: Mao Geping (01318), Ruo Yu Chen (003010.SZ), and Shanghai Jiahua (600315.SH).

Shen Wan Hongyuan's main views are as follows:

China's perfume market has low penetration and high growth, opening up long-term space between industry size and consumption power

In 2025, China's perfume market is about 30 billion yuan, and is expected to exceed 51.5 billion yuan in 2029, with a compound annual growth rate of about 14%; currently, the domestic perfume penetration rate is only about 5%. In 2023, China's per capita perfume consumption is only 16 yuan. Compared with Japan's 47 yuan and the US 423 yuan, there is a significant gap between Japan's 47 yuan and the US 423 yuan, and there is plenty of room for improvement. In 2025, China's perfume imports reached US$1.21 billion, a year-on-year increase of 21%, and demand for high-end fragrances continued to be released; in addition, in 2024, China's emotional economy market reached 2.31 trillion yuan. Fragrance consumption was upgraded from basic fragrance to mood regulation and ritual creation, and the long-term growth momentum of the industry was sufficient.

The performance of international giants continues to verify that perfume is booming, and perfume is still the group's core growth engine

The global beauty market grew by about 4.5% year-on-year in the first half of 2026 (L'Oréal estimates), and perfumery and hairdressing remained strong. L'Oréal's high-end category 26H1 had revenue of 8.0 billion euros, accounting for 33.6%, with a year-on-year increase of 4.4% at the reporting level. Perfume was still the core growth driver, and the business maintained double-digit growth; Estée Lauder revealed that 26H1's overall revenue increased 5.4% year on year, leading double-digit growth in mainland China. The perfume category maintained a high boom, and the share of FY2025 perfume revenue increased from 12% to 17%.

In the competitive landscape, international brands still dominate, and e-commerce with domestic products lent content to break through at an accelerated pace

In 2025, the top 15 brands with sales in the Chinese perfume market are still dominated by international brands. Dior, Chanel, and Jo Malone ranked in the top three with 14.3%, 14.2%, and 7.2% shares respectively; local brands achieved breakthroughs through content e-commerce channels, and the differentiation of consumer preferences at different city levels provided a differentiated development path for local brands.

Phenomenal up-and-coming domestic products such as Guanxia and Wenxian have rapidly risen, becoming the core benchmark enterprise for high-end local fragrance breakthroughs

Guanxia entered the high-end market with oriental botanical aromas and a Chinese mood. In January 2024, it received minority equity investment from L'Oréal; its 2021 applet channel sales reached 143 million yuan, a repurchase rate of about 60%. From August 2023 to July 2024, Tmall sales exceeded 100 million yuan, up 49% year on year, and sales in the aromatherapy fragrance category surged 211% year on year in February 2026. Wenxian is positioned as a high-end Oriental salon. It has set up nearly 50 stores across the country, entered high-end channels such as SKP and Sephora, and established brand barriers with clear style and high recognition. Together with diverse domestic brands focusing on native fragrances, national memories, and seasonal culture, the two form a multi-level domestic fragrance ecosystem, and have become an important force for domestic substitution.

Risk warning: Consumption recovery falls short of expectations, new product launches fall short of expectations, raw material supply and costs fluctuate, industry regulations are becoming stricter, and the industry competition pattern is intensifying.