China is still at a starting point when it comes to fine-fragrance consumption. The segment accounts for only 2.3% of the total beauty and personal care market in the country with sales of $820 million, according to Euromonitor International. However, it is a category that is growing, and one that some analysts say has much potential.

Some point to the progress that the fragrance market has made so far in China. One industry player commented: “Some 15 years ago there was no fragrance industry in China and people did not want to pay for fragrance. But now consumers are willing to pay substantial sums for perfumes. Growth in the segment is now higher than in makeup and skincare, and fragrance has a market share of 10% to 20% in some doors.”

Younger consumers are buying scent and this group is seen as a key target to growing the market in the country. There is also a lot more discussion from young consumers about the category on social networks in China. In addition, consumers are buying bigger sizes and more fragrances—around three to four bottles per year, according to industry sources.

Large groups are putting more resources behind the category in the country. Estée Lauder Companies, for example, launched its Jo Malone fragrance brand in the country in 2014—a clear sign that the company sees growth ahead for the category.

Greater investment by major groups is set to spur awareness of fragrance and growth in the category. “Consistent investment by the leading brands will see the market evolve. International brands will continue to invest in China, even if profits remain low or sometimes are not there yet,” said Ferragamo Parfums CEO, Luciano Bertinelli.

An increase in traveler numbers is also set to drive growth in the category, due to exposure to countries with a fragrance tradition, such as Italy and France. “Perfume is a relatively recent phenomenon in China. Increased interaction with Western culture, with Western fashion houses and constant education on using fragrances will help consumers adopt perfume,” explained Luciano. There is also some good news on the retail level, with more department stores dedicating significant space to fragrances.

To read BW Confidential’s full report on the fragrance market in China visit www.bwconfidential.com.