Haozhong's take: Fragrance Market Trends - Growth Amid Uncertainty

As we wave goodbye to 2025, it is an opportune moment to reflect on the broader economic landscape. Headlines across the globe are dominated by words such as recession, inflation, tariffs, and rising living costs. From different regions of the world, we are witnessing economic pressure and consumer anxiety.

Yet, even amid these challenges, certain industries continue to demonstrate remarkable resilience and growth. One such example is the fragrance sector.

China: The Rise of the “Smelling Economy 2.0”

In China, fragrance consumption has been driven by a notable shift in consumer mindset—particularly among Gen Z. Rather than viewing fragrance as a luxury, young consumers increasingly see scent as a form of self-care and emotional comfort. Many describe fragrance as a way to achieve inner peace, manage stress, and express personal identity.

As a result, China's fragrance market has expanded rapidly, surpassing RMB 52 billion in market size, with an impressive annual growth rate of 45%. Several segments stand out:

    -  Home fragrance recorded a 45% year-on-year growth, reflecting increased attention to living spaces and emotional well-being at home.

    -  Personal fragrance sales rose by 35% compared to the previous year, driven by demand for niche scents, layering products, and personalization.

    -  Cultural IP fragrances grew by 20% in 2025, with temple- and museum-inspired scents emerging as top performers, highlighting the fusion of fragrance with cultural storytelling and heritage.

Together, these trends signal China's transition into what industry observers are calling the "Smelling Economy 2.0" - an era where fragrance is deeply intertwined with lifestyle, culture, and emotional value rather than pure aesthetics.

Western Markets: Sustainability Fuels Growth

The fragrance market in Western countries is also experiencing steady expansion, albeit driven by different dynamics. Sustainability, eco-conscious consumption, and circular design are reshaping consumer preferences.

According to Verified Market Reports (VMR), the refillable perfume bottles market was valued at USD 1.2 billion in 2024 and is projected to reach USD 2.5 billion by 2033, growing at a compound annual growth rate (CAGR) of 9.1% from 2026 to 2033.

(Source: Verified Market Reports)

This growth reflects rising demand for environmentally responsible packaging, reduced waste, and premium refill experiences offered by both luxury and mass fragrance brands.

Outlook

Despite economic uncertainty, the global fragrance market continues to thrive by aligning with deeper consumer needs—whether emotional well-being in China or sustainability in Western markets. Fragrance is no longer just about scent; it has become a powerful medium for self-expression, cultural connection, and responsible consumption. 

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