Beyond the Lipstick Effect: The Rise of "Little Luxuries" in a Recession

Amid the economic downturn, people are opening their wallets for ‘small luxuries.’ Shinsegae International announced on the 22nd that sales of small luxury products such as niche perfumes, luxury cosmetics, and high-end shampoos have significantly increased compared to the same period last year. This is analyzed as an expansion of recession-driven consumption, where people seek psychological satisfaction with relatively lower costs instead of expensive luxury bags or clothing.

Shinsegae International operates a number of small luxury brands that are popular among young people, including niche perfume brands like Diptyque, Santa Maria Novella, and Loewe Perfumes, luxury makeup brands like Hourglass, Laura Mercier, and Dolce & Gabbana Beauty, and premium haircare brands like Davines and Oribe.

Among these, the demand for niche perfumes, considered small luxury products, is rapidly increasing every year. While Diptyque and Santa Maria Novella, which sparked the niche perfume craze in Korea, continue their steady growth, second-generation niche perfume brands are recently making a mark, leading to an increase in sales.

In particular, the ultra-luxury niche perfume brand Ex Nihilo has recorded explosive growth with sales increasing by 120% compared to the same period last year. Established in Paris, France in 2013, Ex Nihilo is known for creating unique scents using only the finest ingredients, regardless of cost.

The flagship product, ‘Blue Talisman Eau de Parfum,’ has remained a bestseller domestically and internationally since its launch in 2023. It recently gained popularity on social media as the ‘scent of a captivating New Yorker,’ further boosting sales. Featuring a unisex scent with sweet pear notes harmonized with musk and amber, it is highly popular despite its high price of around 400,000 KRW (for 100ml). Hand creams and discovery sets with the same scent are also recording high sales.

The French luxury niche perfume brand Memo Paris is also emerging as a new powerhouse, with annual sales growth of over double digits. Known for creating delicate and beautiful scents using rare and premium ingredients from the regions that inspired them, popular products include ‘Inle Eau de Parfum,’ inspired by the refreshing morning air of Myanmar's Inle Lake, and ‘Ithaka Eau de Parfum,’ based on the adventures of the Greek mythological hero Ulysses. Riding on its popularity, a limited edition in collaboration with a famous French artist is set to be released at the end of next month.

Luxury cosmetics are also maintaining steady growth amid the recession. Dolce & Gabbana Beauty has seen a 157% increase in sales this year compared to last year, driven by the popularity of its perfumes and makeup products that embody its unique glamour and sensuality. Both the iconic fragrance line Light Blue and the makeup collection emphasizing brand identity and superior product quality are showing strong sales.

As the saying goes, ‘wealth is in the hair,’ the number of people seeking high-end haircare products has also surged. The Italian salon professional haircare brand Davines has seen a 42% increase in sales this year. Its flagship product, ‘Energizing Shampoo,’ leads brand growth, ranking first in sales despite its high price of around 120,000 KRW per bottle (1000ml). Often used in high-end hair salons, it is affectionately called ‘Cheongdam-dong Shampoo’ and is loved by many consumers.

A representative from Shinsegae International stated, “The ‘lipstick effect,’ where lipstick sales increased during past economic downturns, is now expanding to various categories such as perfumes, cosmetics, and haircare,” adding, “We will continue to discover and introduce new brands that are not yet known in Korea, in addition to the popular brands we currently operate.”