Shenwan Hongyuan Group: China's perfume market has broad room for growth, domestic brands are accelerating their breakthrough.

Shenwan Hongyuan Group released a research report stating that China's perfume market size was approximately RMB 30 billion in 2025 and is expected to exceed RMB 51.5 billion by 2029, with a compound annual growth rate of about 14%, indicating broad room for growth. In terms of competitive landscape, international brands still dominate, while domestic brands are accelerating their breakthrough via content e-commerce. Domestic beauty groups are increasingly ramping up their presence in the fragrance sector. It is recommended to pay attention to listed targets with differentiated positioning: MAO GEPING (01318), Guangzhou Ruoyuchen Technology (003010.SZ), and Shanghai Jahwa United (600315.SH). The main views of Shenwan Hongyuan Group are as follows: China's perfume market features low penetration and high growth, and the gap between industry scale and consumption power opens up long-term space China's perfume market size was approximately RMB 30 billion in 2025 and is expected to exceed RMB 51.5 billion by 2029, with a compound annual growth rate of about 14%. Currently, domestic perfume penetration is only about 5%. In 2023, per capita perfume consumption in China was only RMB 16, compared with RMB 47 in Japan and RMB 423 in the United States, a significant gap that indicates broad room for improvement. In 2025, China's perfume imports reached USD 1.21 billion, up 21% year on year, as demand for high-end fragrance continued to be released. Combined with the fact that China's emotional economy market size reached RMB 2.31 trillion in 2024, fragrance consumption is upgrading from basic scenting to emotional regulation and the creation of a sense of ritual, providing ample long-term growth momentum for the industry. The performance of international giants continues to validate the strong momentum of perfume, which remains the core growth driver for the groups In the first half of 2026, the global beauty market grew by about 4.5% year on year (based on L'Oreal estimates), with perfume and hair care maintaining strong momentum. L'Oreal's high-end category generated revenue of EUR 8.00 billion in 26H1, accounting for 33.6% and up 4.4% year on year on a reported basis. Perfume remained the most core growth driver, with the business maintaining double-digit growth. Estee Lauder disclosed that the company's overall revenue grew 5.4% year on year in 26H1, with mainland China leading with double-digit growth. By category, perfume maintained strong momentum, and its share of FY2025 perfume revenue rose from 12% to 17%. In terms of competitive landscape, international brands still dominate, while domestic brands accelerate their breakthrough via content e-commerce In 2025, the top 15 brands by sales in China's perfume market were still mainly international names. Dior, Chanel, and Jo Malone ranked in the top three with shares of 14.3%, 14.2%, and 7.2%, respectively. Local brands, meanwhile, achieved breakthroughs through content e-commerce channels, and the divergence in consumer preferences across different city tiers provided differentiated development paths for local brands. Emerging phenomenal domestic newcomers such as To Summer and Documents are rising rapidly, becoming core benchmark enterprises for the high-end breakthrough of local fragrance To Summer entered the high-end market with oriental plant scents and Chinese aesthetics, and received a minority equity investment from L'Oreal in January 2024. Its mini-program channel sales reached RMB 143 million in 2021, with a repurchase rate of about 60%. From August 2023 to July 2024, its Tmall sales exceeded RMB 100 million, up 49% year on year. In February 2026, sales in the fragrance and spice category surged 211% year on year. Documents positions itself as a high-end oriental salon fragrance, has laid out nearly 50 stores nationwide, and has entered high-end channels such as SKP and Sephora, building brand barriers with a distinctive style and high recognizability. Together with diversified domestic brands focusing on native fragrance materials, national memory, and solar term culture, the two form a multi-layered domestic fragrance ecosystem and have become an important force in domestic substitution. Risk warnings: consumption recovery falling short of expectations, new product launches and sales falling short of expectations, raw material supply and cost fluctuations, stricter industry regulation, and intensifying industry competition.