The 'olfactory economy' is becoming a new driving force for various cosmetics brands. On November 27, the reporter of Beijing Business Daily learned that Unilever announced that it would invest 100 million euros to establish Unilever perfume House to improve the design and creation ability of internal digital perfume. Richard Slater, chief R&D officer of Unilever, said: "This move will enable us to innovate and develop our own perfume products, and continue to strengthen close cooperation with existing important partners in the industry."
In addition to the investment, Unilever will also enhance the brand advantage consistent with the Group's growth action plan by recruiting professional perfumers and using digital technology, artificial intelligence and other means, that is, to improve the overall experience of other products of the Group while developing consumers' favorite perfume.
In 2023, Ma Han, chief executive officer of Unilever, took office and proposed to implement the growth plan. Within the shrinking framework, perfume business became Unilever's unscrupulous investment project. As early as November 2023, Unilever invested in the Canadian high-end perfume brand The 7Virtues for the first time through its venture capital department.
The reporter of Beijing Business Daily interviewed Unilever on issues related to the layout of perfume business, but no reply has been received as of press release.
It is worth noting that the perfume and fragrance business is becoming the "sweet cake" of the cosmetics industry. L'Oreal, Est é e Lauder, Shiseido and other beauty giants have long been vying for market share.
As early as June 2020, YSL Saint Laurent, a high-end beauty brand under L'Oreal Group, opened the world's first perfume themed flagship store in Shanghai, next to the TOMFORD under Estee Lauder Group. At that time, there was some competition.
Subsequently, major brands began to recruit troops. In 2020, L'Oreal acquired Azzaro and Mugler, high-end perfume brands under Clarins; In 2021, it won the agency right of PRADA beauty perfume. In September 2022, it will invest in China's local high-end perfume fragrance brands and offer DOCUMENTS; In the same month, L'Oreal launched PRADA perfume cosmetics, China's first perfume store, in Shanghai. In October of the same year, L'Oreal established a luxury fragrance brand department. In March this year, L'Oreal announced to restart the Chinese market of its perfume brand, Atelier Cologne Paris, and plans to open more than 10 boutiques/counters in China in 2024; In June, another brand of L'Oreal, Mugler, opened the first fashion and perfume store in China.
Estee Lauder will acquire a minority stake in the British perfume brand Vyrao in March 2023; Complete the acquisition of the TOMFORD brand in May; In June, we officially launched our high-end fragrance brand Le Labo into the Chinese market.
Shiseido is relatively slow. In July this year, it announced to establish long-term perfume business cooperation with Italian luxury fashion brand Max Mara.
Behind the frequent acceleration of giant layout is the high growth of perfume and fragrance business. According to the data disclosed by L'Oreal Group in the financial report teleconference, the high-end cosmetics department of its perfume business will grow three times faster than the average market in China in 2023, accounting for more than 31% of the market share. The sales of Estee Lauder's multi business departments declined in the 2024 fiscal year, with only the sales of perfume category increasing by 2% year on year. "This is mainly driven by the mid single digit growth of high-end perfume brands. For example, Le Labo's net sales recorded a strong double-digit growth, nearly doubling in the Asia Pacific region." Estee Lauder mentioned in the financial report.
In the opinion of Wu Daiqi, CEO of Shenzhen Siqisheng Company, enterprises' investment in perfume brands is related to the development of the overall pattern of the daily chemical industry. The perfume fragrance market is developing rapidly and belongs to the high gross profit industry. If you can get a share of it, it will help improve the profits of enterprises. In addition, the enterprise is also expected to gradually develop other beauty categories, or introduce the concept of perfume into the development of high-end care products.