Perfumes & Cosmetics: Luxury Brands' New Engine - Part Ⅰ
As luxury consumption enters a "cooling phase" and high-net-worth clients become more rational, perfumes and cosmetics are emerging as new engines for luxury brands to rebuild appeal. According to the latest white paper Le Luxe en Mutation (Luxury Industry Transformation Report) jointly released by KPMG, one of the four major international accounting firms, and Potloc, a Canadian consumer social media research and survey platform, as the sentiment of "luxury fatigue" spreads, top brands are collectively shifting towards strategic directions such as "experiential consumption", "accessible luxury", and "care elevation", especially in the field of beauty and personal care.
The report indicates that the global premium beauty and personal care market is expected to double in growth by 2027. Concurrently, with holistic wellness, longevity, and "beauty from within" becoming new essential needs for high-net-worth individuals, "sensorial luxury" is replacing the past reliance on brand logos and conspicuous consumption, becoming a new battlefield for luxury brand competition.
In this transformation, fragrance and cosmetics play three pivotal roles: traffic acquisition gateway, experiential platform, and lever for brand equity reinvention.
From "Entry-Level Luxury" to Core Experience: Redefining Luxury Architecture
In the past decade, luxury brands heavily relied on price increase strategies to drive growth. KPMG cited HSBC data and pointed out that since 2019, the average price increase of major luxury brand products has reached 54%. However, by 2024, this strategy will encounter a "demand inflection point" for the first time: consumer indifference to price rises led to weakened sales, particularly in volatile Asian markets.
Facing this, luxury brands are reassessing their product architectures and consumer segmentation, and perfume and cosmetics became a breakthrough in "rebuilding consumption trust". Among the 180 industry executives surveyed by KPMG, more than 45% said that they would strengthen the layout of perfume, beauty, maintenance and other categories in the next two years, as an important support for "de-pricing" and "de-singularization" strategies of brands.
On the one hand, beauty naturally possesses the characteristics of "high perceived value at low entry barriers", which can accurately capture the emotional projection of luxury brands by millennial and Gen Z consumers, while avoiding falling into "price resistance". On the other hand, perfume, skin care and cosmetics, as highly sensory consumer goods, also provide more narrative space for brands — olfactory memories, skin experiences, daily rituals sense, etc., are all transformed into organic components of brand recognition.
Sensation as Value: Care, Wellness & Emotional Therapy as New "Luxury Experiences"
Luxury is no longer limited to materials and prices, and consumers have higher expectations for "product sensation". In KPMG's definition, modern luxury has entered the "experience-driven era", where the core is not the possession of objects, but the awakening of senses and the retention of memories. Rather than selling items, it is more like selling a high-level form of "presence". Around this experiential appeal, beauty has become the "primary sensory interface" and the first field to be included in the logic of luxury reconstruction.
Boundaries between beauty, care, and emotional value are blurring. Consumers focus on fragrances, skincare, scalp management, anti-aging, and even sleep quality has made "beauty" no longer just about appearance, but also strongly related to physical and mental state, social performance, and even self-awareness. This has opened up a new narrative for luxury brands: "experiential care", also known as "sensorial luxury".
KPMG research shows 53% of luxury brand decision-makers now prioritize "personalized emotional experiences", including customized SPA, sensory therapy products, and health tracking mechanisms combined with technology.
It is worth noting that this trend has also opened a new window for technological empowerment. AI, the Internet of Things (IoT) and wearable devices have been piloted in high-end skincare spas, combining skin detection, hormone fluctuation analysis, and sleep monitoring to customize daily skincare and nutrition advice for users — luxury, no longer static objects, but the feeling of "being continuously cared for" itself.
In the consumer lexicon, this "understanding me" luxury proves far more compelling than high prices alone.
