Insights

Fragrance is moving from something consumers wear to something they live in. In this issue of Samjong Focus, the Samjong KPMG Economic Research Institute defines fragrance broadly, covering not only fine perfume but scent-based home, body and hair products and scent-marketing services, and tracks the category's shift from a beauty sub-segment into a lifestyle and spatial-experience industry. Perfume alone gives a sense of scale: the global market is projected to grow from USD 61.9bn in 2025 to USD 74.4bn in 2031, and the Korean market from USD 464m to USD 521m over the same period. Those figures exclude diffusers and other home fragrance, so the addressable market is larger.

Scent has become a daily routine, and a multi-product one. The report's starting point is a change in consumption. Perfume was long a final touch before leaving the house. Today scent appears throughout the day, from a room spray on waking to a diffuser before sleep. Lower-priced formats such as body mist, mini perfume, roll-ons and hair perfume have widened the entry point into what was a premium, high-ticket category.

Layered on top is Generation Z's use of scent as self-expression. Rather than committing to one signature perfume, consumers combine several products by occasion, space and mood, and "scent wardrobe" content is spreading on TikTok and Instagram. The market has moved from a single-perfume model to a high-frequency, multi-product one. The report frames this as the "olfactory economy": scent applied to products, spaces, services and brand experiences to shape emotion and memory, and monetised accordingly.

Retail, fashion, construction, hotels and banks are all entering. The second axis is who is moving in. In retail, CJ Olive Young has made fragrance a core category and added in-store fragrance bars and a perfume library; Hyundai Department Store opened a niche-perfume hall carrying some 30 brands; Daiso is widening the base with 30ml perfumes priced at KRW 3,000 to 5,000; and Shinsegae International opened an online perfume hall on its own platform in May 2026 to turn its niche-brand portfolio into a curated channel. In fashion, Handsome secured exclusive Korean distribution for a French niche-perfume retailer and now carries around 200 SKUs, while F&F committed KRW 67.2bn to an investment vehicle set up to acquire a 70% stake in Ssukssuk Company, operator of the diffuser brand Hetras.

The more striking shift is in physical space rather than product. Developers are commissioning signature scents for high-end residential brands and applying them to move-in packages and common areas; hotels are extending their signature scents into diffusers and hand creams sold at retail; and Woori Bank rolled out a scent-marketing system to more than 300 branches at the end of 2025. The report groups these moves into four strategies: securing distribution rights for niche brands, developing private-label products, acquiring capability through M&A or minority stakes, and building a signature scent as a branding asset.

K-fragrance brands and B2B scent specialists are emerging. On the supply side, newer Korean brands such as Tamburins, Nonfiction, BORNTOSTANDOUT, Kuoca and KEYTH are gaining ground through collaborations with international perfumers and strong storytelling. Tamburins operated 15 stores globally as of August 2026. BORNTOSTANDOUT entered distribution channels in some 60 countries and then raised a Series A that included BOLD, the venture fund of L'Oréal Group. In July 2026, d'Alba Global invested roughly KRW 9.6bn in Kuoca Skin for a 33.61% stake, with a call option to raise its holding to as much as 90% three years after the investment.

Scenting a space is becoming an industry in itself. B2B fragrance companies such as Scent On and iScent offer an end-to-end service, from brand and space analysis through perfume design, installation and maintenance to turning the signature scent into retail products, and are winning hotel, banking, residential and exhibition clients. The report expects demand to shift toward integrated partners that cover concept to commercialisation rather than scent supply alone.

M&A Implications. Of the four expansion routes the report describes, only M&A or equity investment internalises a brand together with its perfumery and manufacturing capability in one step, so we would expect deal flow to continue. First, bolt-on acquisitions of fragrance brands by fashion and retail groups are likely to increase. In portfolio-diversification deals such as F&F's investment in Ssukssuk Company, the fit between the brand's world-building and the acquirer's existing channels is likely to be the main valuation variable. Second, the d'Alba Global–Kuoca structure, a minority stake with a call option to control, could become the template for K-fragrance transactions, since it shares early-stage growth risk between buyer and founder. Third, BORNTOSTANDOUT's path of building overseas distribution first and raising strategic capital second points to proven international channels, not domestic brand awareness, as the precondition for cross-border investment. Fourth, as demand for spatial scent spreads across construction, hospitality and finance, B2B fragrance specialists with perfumery and scent-operations capability could become capability-driven acquisition targets for flavour-and-fragrance houses and facility-management groups.