“Consumer sentiment is also slightly rebounding,” says Scotti, with skincare and fragrances prevailing very competitively. Similarly, at L’Oréal, CEO Nicolas Hieronimus told analysts that “China is back to positive territory and also back to a positive luxury consumption.” Premium brands like Skinceuticals and Kérastase are “flying off shelves”, he adds, as Chinese consumer sentiment recovers. “In emerging [markets] and China, the brand achieves high-double-digit growth and continues to play a key role in recruiting new consumers,” he said.
Filippo Falorni, US beverages, household products and personal care analyst at Citi, notes that the China market is seeing improvement as it moves towards ‘masstige’ (high-quality, premium, or aspirational goods that are affordable such as The Ordinary, La Roche-Posay and Dr. Jart+). “The early checks from Chinese New Year [are] generally encouraging,” he adds.
ELC CEO and president Stéphane de La Faverie said the group is laser focusing on “retailtainment” with its teams in travel retail China and in China Mainland creating “VVIP” events to reach the consumer.
Continuing to innovate in China is on the top of the to-do list at Unilever, too. “We have made some significant interventions in the route-to-market of e-commerce. More work to do there, but we expect a better year in China in 2026,” said Fernandez.
Fragrances preserve
The fragrance market continues to normalize off a post-pandemic boom period. But opportunity remains, particularly in the niche and “couture” (fashion house) sub-categories.
“While we expect growth in the fragrance market to continue to normalize, we enter the new financial year with confidence,” Puig told analysts. Fragrance and fashion accounted for 72% of the Spanish conglomerate’s total revenue in 2025, up 6.4% on a like-for-like basis. Puig referenced fragrance brands Carolina Herrera and Jean Paul Gaultier as standout performers, while Byredo witnessed double-digit growth in the niche fragrance category.
Right now, fragrance growth in the market is “supported by the expansion of consumer cohorts, increased usage frequency, and deeper penetration into emerging markets”, Nicolai says.
Looking ahead, Puig is certain in its potential. “Young people and teenage boys are jumping into the category via TikTok and it has had an impact on sales. This gives us confidence that the category has momentum,” he said. That said, Puig is facing growing competition, as the fragrance market becomes more saturated, and competitors increase marketing activity, particularly in emerging markets like Latin America.
As Coty begins its transformation under executive chairman and interim CEO Markus Strobel, it’s also betting on fragrance to bring the business back to profitability with big opportunities in the masstige category. “It’s very clear to me that Coty has many top-notch assets and competitive advantages: highly attractive brands, best-in-class fragrance innovation capabilities, a vertically integrated business model, and a creative, entrepreneurial organization,” Strobel told investors.
