Many international fashion and beauty brands are hedging their bets on China, where a faltering luxury market has an economic slowdown.

But those warning signs haven’t deterred niche British fragrance brand Perfumer H. In early 2025, it will open a four-story, 4,000-square-foot store in Shanghai’s fashionable French Concession, near stores like streetwear maker Supreme. In addition to the sales floor, the store will also include a film screening area, a candle refilling station, a tea room and space for an artist in residence.

Despite not yet having a physical presence in China, Harris said the brand has reason to believe its new shop will resonate in the market. Perfumer H’s scents, such as Ink (with notes of vetiver and black pepper), Rainwood (which smells like juniper) and Moss (with notes of grapefruit and patchouli), all $190, are already popular with Chinese customers making purchases overseas.

“I don’t fear anything, really,” said co-founder and perfumer Lyn Harris. “I can feel people [in China] want the product, and we offer something special and unique.”

China may be the world’s second-biggest beauty market (after the US), but lately, it’s been posing headaches for international beauty brands. In the post-pandemic era, local brands often come out on top over global names, and China is seeing a slower economy recovery, compounded by government crackdowns on excessive wealth and softer consumer spending. Muted demand caused LVMH-owned retailer Sephora to cut 10 percent of staff in August, while overexposure in the market has dragged down earnings for conglomerates like Estée Lauder Companies and Shiseido.

The Chinese fragrance market is still a nascent one, with customers more comfortable shopping for skincare and cosmetics. According to market insights firm Digital Luxury Group, Chinese consumers are still in the early development stage with fragrance, and just beginning to build habits around consumption and usage — which could mean they’re more malleable, and that behaviour and uptake could still evolve.

Harris is resolute that there’s plenty of opportunity. She and co-founder Christophe Michel are hoping that a combination of innovative products and experiential elements to the store will increase their chances of success. Their bet is also on the wider power of brick and mortar, as the company plans to have 10 points of sale in China by 2028.

“We offer something really special and unique … we’re giving an experience,” said Harris.

Experience and Emotion

There’s precedent for Perfumer H’s confidence. Gen-Z and Millennial shoppers are not only voracious consumers of fragrance, but prioritise spending on experiences. Many consumer brands have seen success adding lifestyle or experiential elements to their retail outposts — think Ralph Lauren’s “Ralph’s” cafés, or Glossier’s purpose-designed selfie areas.

Penetration of fragrance in the Chinese market is lower than categories such as skincare and cosmetics, due to cultural preferences that favour smelling clean rather than perfumed, but the market is showing early rumblings of growth. Per local press, the local luxury department store chain SKP opened a new outpost in the Chinese city of Wuhan in July that featured 40 fragrance brands, while conglomerates like L’Oréal and Estée Lauder Companies have tapped homegrown indie labels like To Summer and Melt Season for investment.

Perfumer H’s China effort is being launched in partnership with a local distributor, who will also assist with local press, marketing and communications, which should relieve staffing pressure on the company and reduce the likelihood of it getting lost in translation. Much of the flagship space will be dedicated to Shanghai-based artisans, like a ceramist selling hand-crafted objets or a bakery offering preserves and oils.

Still, it’s a premium brand: in addition to its core range of perfumes, Perfumer H also offers refillable candles and fine fragrances in hand-blown glass bottles, which sell for over $700. Harris is a seasoned perfumer who previously created scents for niche brands like Vyrao and Cire Trudon (Perfumer H is her sophomore brand; she previously launched the premium line Miller Harris in 2000 and exited in 2013).

Harris believes her pedigree, on top of the brand’s unique assortment including candles, teas and incense, will help win over local consumers. “They like my style of perfumery,” Harris said — especially her emphasis on quality.

Channel Mixing

China is just one part of Perfumer H’s global ambitions. By early 2025, the brand will launch in top Australian beauty retailer Mecca, unveil a new store in Tokyo, and open another under franchise in Seoul.

Currently, the label operates three stores in London, including a new Mayfair flagship, and it has a presence in multi-brand retailers like Arts + Science and Tomorrowland in Japan, Sans in South Africa, as well as its own stores in Hong Kong, Macau and Taipei through a mixture of wholesale and franchising,

While many niche perfume brands prefer to lean on solely on wholesale to grow their customer base, Harris and Michel opened dedicated stores as soon as possible because “it builds up your community instantly,” said Harris.

The brand is backed by Fable Investments, the venture firm spun out of Brazilian conglomerate Natura by former Aesop executives. (The firm took a stake in 2022, and increased it in May 2023.)

Harris is well aware that the Chinese customers, like their international contemporaries, are looking for value. Where do fragrances with hand-blown glass bottles that cost as much as a mid-range smartphone fit into that?

“They’re not just going to buy for the sake of it anymore,” said Harris. “And that’s great. That’s the customer we want.”

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Consumers and celebrities around the world covet it for its warm, earthy and musky scent, but Australian sandalwood’s popularity has come at more than just a hefty cost to the wallet, with some scientists warning the species is at risk of extinction in the wild.

“Australian sandalwood’s downfall is that it’s one of the most fragrant species of sandalwood in the world,” said Richard McLellan, an adjunct research fellow at Charles Sturt University.

“A lot of people know sandalwood very well but very few people know it’s declining in the wild and it’s been over-harvested for decades.”

McLellan has spent the past six years researching wild Australian sandalwood — Santalum spicatum — which is harvested in Western Australia for oil that is used in luxury perfumes, incense, cosmetics and other consumer products.

Dutjahn Sandalwood Oils is a 50 percent Aboriginal-owned business that sells sandalwood oil to companies such as Aesop and Givaudan — a multinational that supplies the Estée Lauder group, among others.

Its chief executive, Guy Vincent, said the business sourced Santalum spicatum from a combination of plantations, the WA government-owned Forest Products Commission and native title lands managed by traditional owners.

“From our perspective, the species is not threatened, it’s thriving especially on native title land where there are traditional owners managing their land,” he said.

He said regeneration of the species on native title lands was “monitored and validated scientifically”.

“Here we have this spicatum that is valued greatly by international fragrance houses and managed sustainably by Aboriginal people and gives opportunities for Aboriginal people.

“There needs to be a broader view of the sustainability in this context.”

In WA, the primary commercial harvest operator is the Forest Products Commission, which manages the harvest of up to 2,500 tonnes of wild Australian sandalwood each year.

Australian sandalwood is also harvested in plantations but the warnings from conservationists are focused on trees found in the wild and long-standing concerns that there is insufficient natural regeneration of the species.

Historically, Santalum spicatum grew across most of southern Western Australia and into South Australia. It was listed as a threatened species decades ago in South Australia but has no such protections in WA, where wild populations have largely retreated to the semi-arid parts of the state.

McLellan is hoping that could soon change with the federal threatened species scientific committee (TSSC) considering whether to list Australian sandalwood for protection under national environmental laws.

“My research shows it is a keystone species for native fauna and yet we pull it out of the ground to make perfume with no thought to its ecological value in the landscape,” he said.

The committee is due to deliver its recommendation to the environment minister, Tanya Plibersek, on 30 October, one of almost 50 expected recommendations – including on the conservation status of the maugean skate.

Three years ago, the International Union for Conservation of Nature (IUCN) listed wild Australian sandalwood as vulnerable on its international red list of threatened species after scientific advice identified “unsustainable, legal wild harvest” as a major threat to its survival.

Prof Kingsley Dixon, a botanical specialist at Curtin University, said across its range, “we are seeing the species reduced in both abundance and vigour and vanished in many areas where it was once common”.

“The evidence is we have less sandalwood in the wild than probably ever in its evolutionary history,” he said.

The WA department of biodiversity, conservation and attractions manages wild sandalwood by imposing limits on how much can be harvested each financial year. The department is due to set new annual harvest limits in 2027.

A spokesperson said that review process would “respond to any decision by the commonwealth should sandalwood be listed as a threatened species”.

“As acknowledged in Western Australia’s sandalwood biodiversity management program, there is concern that a lack of natural regeneration in some areas in the wild is threatening long-term stability of populations,” they said.

“Therefore, re-seeding and regeneration programs are important for sandalwood conservation. WA’s sandalwood management program seeks to conserve, maintain or re-establish self-sustaining sandalwood ecosystems in the state.”

Peter Robertson, an environmental consultant and convener of the “Save our Sandalwood” network, said that — in addition to over-exploitation — climate change and grazing by feral animals were major threats.

“It’s in a dire state,” he said.

“We think that the minister must accept that advice and ensure that Santalum spicatum is listed as a threatened species.”

By Lisa Cox

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The wheels of change continue to turn at Estée Lauder Companies.

Jane Lauder — the granddaughter of Estée Lauder, the company’s founder — will step down from her role as chief digital officer and executive vice president of enterprise marketing at the end of this year, the company confirmed to The Business of Beauty on Monday.

The company is undergoing a raft of executive changes as it shores up its succession strategy. Chief financial officer Tracey T. Travis will step down on November 1, while chief executive officer Fabrizio Freda is set to retire next June. A successor to Freda has yet to be named.

Lauder has occupied her dual role since 2020, and was named as a co-leader of the company’s profit recovery plan in July alongside executive group president Stéphane de la Faverie. She previously worked as a global brand president at various ELC brands, including the skincare lines Clinique and Origins. She will retain her board seat, though her departure will mean the Lauder family no longer hold any roles in the company’s quotidian operations.

Investors have been calling for a shake-up in the company’s leadership since 2022. The aftermath of the pandemic laid bare how reliant the company had been on the Chinese market and department stores, and its slow recovery, downward revisions to its outlook and tepid sales growth have seen its stock price slide by around 80 percent since the end of 2022.

The company will report quarterly earnings on Thursday.

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