During the firm’s 2021 annual results conference, Cyril Chapuy, president of the L’Oréal Luxe division, highlighted that the firm’s luxury fragrance had achieved remarkable success in the past year.
“The fragrance market was very dynamic this year – close to plus 30% worldwide. It was very dynamic across regions, not necessarily only in regions where the market had gone down with COVID,” said Chapuy.
He elaborated that the growth of the luxury fragrance category was tied to the renewed awareness and interest of scent which had risen during the COVID-19 pandemic.
“Fragrance is very much linked to new consumer behaviours where are very much centred around pleasure for me and wellbeing. Fragrance is a category that is totally answering this need. Secondly, fragrance is a category that helps you get back to social life, like make-up, and after COVD-19, all customers worldwide wanted to go back to a more active social life and fragrance is a very social life product.”
Aside from this, Chapuy highlighted there were other fundamental reasons that explained the meteoric rise of the fragrance category, namely the “explosion” of the category in China.
“Historically, fragrance was a small category in China – less than 5% of the Chinese luxury market. It is growing very fast, in the last month of the year, fragrance was close to 10% of the Chinese luxury market with a new generation of Chinese customers discovering fragrance and loving the experience.”
He expressed his optimism for the category moving forward, emphasising that the company is the top luxury fragrance producer worldwide with more than 20% of market share.
Furthermore, Chapuy said he believed that the company has curated the “perfect portfolio” to carry it through the coming years.
“First, we have very strong couture brands like Yves Saint Laurent, which managed to leap into the top five fragrances worldwide in just two years. We have our newly acquired brands Prada and Valentino but also more creative fashion couture brands, more niche but highly appreciated like Mugler, Viktor&Rolf and Maison Margiela.”
Such niche brands were valued by the Chinese consumers who now appreciate “extremely creative” collections of 20 to 30 fragrance from brands such as Maison Margiela, Atelier Cologne, Armani Prive, said Chapuy.
“All in all, I think we’re well-positioned on this market, and I strongly believe it’s going to keep growing close to double digits in the years to come.”
The next billion-dollar brand
Fragrance brands are not the only ones benefiting from the heightened interest from China’s luxury consumers.
Helena Rubinstein, a historic yet relatively small luxury brand, has been growing significantly thanks to the brand’s efforts in China.
“Helena Rubinstein is a fantastic success story. It's positioned on the top of the skin care market worldwide, and what we call super-premium, which is a category which has been booming over the last five years,” said Chapuy.
The success of the brand in China can be distilled down to its positioning as a high-quality brand with highly concentrated formulas and the cultivation of its exclusivity by limiting its distribution.
“Obviously, the brand is loved by the Chinese consumers, who are the number one consumers of super-premium skin care on the planet and the brand. The teams locally have done an amazing job at developing very strong advocacy influence strategy… I’m very optimistic that Helena Rubinstein can become a billionaire brand for us,” said Chapuy.