Interparfums sets sights on China

French licensed fragrance specialist Interparfums - best known for its licensing deals with brands such as Montblanc and Lacoste - presented its annual results at the Pavillon Gabriel in Paris. On the occasion, Renaud Boisson, CEO of Interparfums Asia Pacific, outlined the group's strategic vision for the Asian fragrance market, specifically China.

Global beauty groups' performance has suffered over the past year as China's economy slowed. However, despite adjustments in consumer spending habits and a growing preference for local brands, especially in the beauty industry, China remains a priority market for Interparfums.

In fiscal year 2023, Interparfums' turnover in the Asia-Pacific region reached €108 million, an increase of 17%. Looking ahead to 2024, the group aims to achieve sales of €122 million. In 2023, sales in mainland China, including Hong Kong, accounted for 21% of regional sales, equivalent to approximately €22 million. Renaud Boisson said: “By 2024, we expect revenue from the Chinese market to reach €30 million.”

As such, Interparfums displays cautious ambitions, especially given that China's fragrance industry is still in its infancy. In fact, the fragrance market accounts for just 4% of total beauty sales in China, in contrast to France's 55% share. Nonetheless, there is no doubting the enthusiasm for fragrance, especially niche fragrances, which accounted for 21% of the Chinese fragrance market in 2022.

"With Van Cleef & Arpels and its Extraordinary Collection, we are aligned with the niche brand trend,” Renaud Boisson and Jimmy Choo stressed, noting that Van Cleef & Arpels contributes 10% to Interparfums' sales in China. Currently, the company's three leading brands in the Chinese market are Coach, Montblanc, which Boisson said "has a long way to go in China."

In the near future, similar to Coty's recent launch of its fragrance brand Infiniment Coty Paris, Interparfums is also preparing to launch its own line of fragrances. The niche brand, whose name has yet to be revealed, will be distributed primarily in Asia.

Boisson also acknowledged the unique characteristics of China's distribution channels. In 2022, 43% of fragrance sales were online, driven by platforms such as Tmall and TikTok, an increase from 29% in 2019 before the pandemic.

On the contrary, the popularity of perfume boutiques is declining; by 2022, they accounted for 29% of perfume sales in China, down from 45% in 2019. Of note, however, is the rise of branded boutiques, which accounted for 20% of distribution sales in 2022, up from 15% in 2019.

73% of Interparfums' annual sales come from online channels in China, with only 4% achieved through the brand's boutiques - a model developed by the group in particular partnership with Van Cleef.

In 2022, the Asia-Pacific region accounted for 42% of global fragrance, skin care and cosmetics sales, with China contributing 13%. In comparison, North America and Europe account for 22% and 19% of the global beauty market respectively. McKinsey research shows that by 2026, China's perfume market is expected to grow at an annual rate of 35%, of which the Asia-Pacific region is expected to achieve a growth rate of 28%.