San Francisco, CA (PRWEB) October 06, 2012
The Fragrance and Essence Manufacturing industry in China has experienced rapid growth in the past five years, driven by expanding demand from downstream food, beverage and tobacco manufacturers. Industry revenue has been increasing at annualized rate of 14.5% in the five years through 2012 to total $8.4 billion.
The large domestic market, cheap labor and rich aromatic plant resources have encouraged international firms like Firmenich Aromatics and Symrise to enlarge their presence and establish China as a major fragrance and essence manufacturing center. In the international market, fragrance and essence manufacturing has a high concentration level. However, the young Fragrance and Essence Manufacturing industry in China has a low concentration level as it is still developing. The market in China is expected to consolidate as international manufacturers increase their presence and competition intensifies.
Technology development, especially patent technology, is critical for enterprises in this industry. Top international players currently invest about 10% of revenue in technology and product development. However, Chinese enterprises invest a much lower proportion. Most Chinese fragrance and essence manufacturers are small in scale with very limited patent technology. Small firms can survive or even prosper by providing low-cost fragrances and essences to domestic and international markets. As consumers become more aware of health and wellness trends, synthetic fragrance and essence products will lose ground in the market, says IBISWorld. In addition, to complement the limited volumes of natural aromatic plants, biotechnology will begin to develop in China. R&D investment by Chinese enterprises like Huabao International Holdings Limited is expected to increase as competition becomes more intense and firms look at ways to increase market share.
For more information, visit IBISWorld’s Fragrance and Essence Manufacturing industry in China report page.
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IBISWorld Industry Report Key Topics
Products of the Fragrance and Essence Manufacturing industry in China include natural and synthetic spices, and essences that are further segmented into flavors (i.e. essences added to food, beverages, pharmaceuticals, animal feed, tobacco and other products) and fragrances (i.e. essences added to soaps, detergents, cosmetics, toiletries, perfumes, household cleaning products, candles, insecticides and aromatherapy products).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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