"Not Regretting 700,000 Won"... Powerful 'Fragrance Effect' Rivaling Luxury Bags [Luxury World]

Niche Perfumes Achieve Double-Digit Growth in Department Stores
Affordable Prices Deliver Luxury Brand Effect
Luxury Brands Simultaneously Raise Perfume Prices

The strongest stimulus among the 'five senses (五感)' comes from the sense of smell. The stimulation from scent is much greater and deeper than seeing with the eyes, hearing with the ears, tasting, or touching. This means that one can express themselves more intensely through fragrance than by flaunting luxury bags, watches, or wallets. The recent craze for 'niche perfumes' can be traced back to this. Niche perfumes pursue new and complex scents that cannot be found in mainstream perfumes.

Until a few years ago, niche perfumes were consumed mainly by a small group who wanted scents that only they could know. But now, things are different. Due to their high prices, they are called 'luxury perfumes' and have entered the heart of department stores. Fashion conglomerates are fiercely competing to introduce new niche perfume brands to the domestic market.

According to the distribution industry on the 12th, from January to April this year, major department stores all recorded double-digit growth rates in niche perfume sales, showing strong growth. Hyundai Department Store saw a 30.8% increase in sales compared to the same period last year, and Shinsegae Department Store recorded growth in the 10% range. Shinsegae Duty Free, which launched the perfume specialty store 'Perfume Atelier' at Incheon International Airport Terminal 1 at the end of last year, announced that perfume sales grew by 41% in the last three months compared to the same period last year.

Niche perfumes often have complex and deep scents rather than simple and straightforward ones. This is the biggest reason why young consumers who value individuality seek niche perfumes. As the tendency to pursue scents that others do not have deepens, interest has expanded from brands like 'Diptyque', 'Le Labo (Est?e Lauder)', 'Byredo', and 'Jo Malone London (Est?e Lauder)' to various niche perfume brands such as Tom Ford, Maison Francis Kurkdjian (LVMH), Creed (Kering), Kilian (Est?e Lauder), Acqua di Parma (LVMH), and Fr?d?ric Malle. Song, 31, who even goes to workshops to make perfumes, said, "I tend not to use perfumes that have already become famous by brand," adding, "There is a thrill when someone asks me what perfume I am wearing, so I keep looking for new niche perfumes."

One of the charms of niche perfumes is that you can enjoy the luxury effect at an affordable price. Niche perfumes are considered a representative of 'small luxury.' Small luxury refers to personalized experiences that can be enjoyed from products that not everyone can buy. It means that you can achieve a similar effect to wearing luxury bags or watches worth hundreds of thousands to millions of won for less than 500,000 won. The market size is growing every year, and according to the global market research firm Statista, the global prestige perfume market is expected to grow at an average annual rate of 8% from 2021 and expand to $18.2 billion by 2025.

Maison Francis Kurkdjian.

Niche perfumes are more expensive compared to large perfume brands because they use unique raw materials exclusive to the brand. Prices also vary depending on the concentration of fragrance oils, which indicates how much raw material is contained in the product. The higher the concentration, the longer the scent lasts and the higher the price. Expensive perfumes have a concentration of 15-30%, with the scent lasting about 7 hours. Although prices vary by brand, they range from 200,000 to 300,000 won for 70-100mL, and can go up to the 700,000 won range. This is about 4 to 10 times higher than the price of mainstream perfumes sold at general multi-brand shops (MBS).

Recently, niche perfume prices have been rising sharply. Despite the economic downturn, demand for niche perfumes has exploded, prompting global luxury companies to raise prices. Creed, owned by the French Kering Group which also owns Gucci, is reportedly planning an average price increase of around 10% next month. Maison Francis Kurkdjian of the LVMH group raised prices of major products by 5-10% earlier this month. The American luxury beauty brand Tom Ford also slightly adjusted prices for some product lines in the first quarter. Tom Ford's signature perfume 'Rose Prick (100mL)' is priced in the high 700,000 won range.

Department stores are increasing the number of perfume brand stores to attract niche perfume customers. According to Shinsegae Department Store, the number of niche perfume stores in all department store branches was only 36 in 2019, but expanded to 69 in 2022 and currently stands at 78.

Competition for exclusivity is also fierce. Hyundai Department Store exclusively sells Argentine perfumes 'Fueguia 1833' and 'Perfumed Malley.' Fashion companies are competing fiercely for distribution rights of overseas niche perfume brands. Shinsegae International, which distributes Diptyque and Byredo domestically, has expanded its perfume portfolio with brands like 'Courr?ges', 'Memo Paris', and 'Santa Maria Novella', while LF introduced the French brand 'Soladora' to Korea for the first time at the end of last year. A distribution industry official said, "As new niche perfume brands come to the forefront, interest in niche perfumes continues," adding, "Perfumes are not bought like luxury bags, where you buy just one, but multiple are purchased and used, so demand is expected to increase further."