Why did 'Made in France' dominate for so long?
‘Made in France’ products use to dominate the perfume market. Companies of various sizes and qualities used to supply both mass market and premium products.
The phenomenon of ‘made in France’ was the result of over a hundred years of perfume activity in the South of France. Grasse, the Mecca for French perfumery, started off its perfume activity due to its glove making industries which are now long gone. The events around this period of history solidified France’s position as the hub for all perfumery. Until recently if your product was not ‘made in France’, then it was harder to sell it. People were also mostly buying their perfumery packaging from France until recently, but what is the current situation and what contributed to the decline of France in perfumery?
High barriers to entry
20 years ago French , Italian and Spanish perfume packaging suppliers dominated the perfumery packaging industry. New bottle or cap moulds required a big monetary outlay, so only huge companies could afford to create truly new concepts. Minimum production runs at that time meant that you had spend a lot to launch a new project, even without new mould investment. Many mass market and prestige French perfume were exporting all over the world. France was dominant in all sectors of finished perfumery products and packaging supply.
So what contributed to the decline of 'Made in France' products?
1. Other supply hubs setting up In the late 90s and early 00s Chinese factories started to develop and sell new perfume bottle sets. They offered lower order quantities and lower mould fees. The cost was lower, even if you wanted to develop your own private design. Of course, there was a disadvantage that many factories would not hesitate to sell your private mould to many other clients. Cheaper prices, lower MOQs and cheaper mould fees enticed many buyers away from French factories and into Chinese ones.
2. Other manufacturing bases offer cheaper manufacturing bases. United Arab Emirates, China, India and, to a lesser degree, Eastern Europe offer an alternative to France. China has by far the widest range of factories as well as a great infrastructure for shipping goods.
Operating costs
3. The high cost of labour in France can be prohibitively expensive for mass market factories, consequently many factories have automated factories and avoided hiring new labour. Niche and premium perfumes can still afford to continue to operate in France. The selling price of their products is high enough to offset the higher manufacturing costs.
4. Consumers are more desensitised nowadays about the place of manufacture and less focussed on ‘Made in France’. Younger consumers are more savvy and cynical, as they understand that Made in France could well result in a high quality product. But they also recognise that they could buy the same item for a cheaper price if the product was made elsewhere. Our younger consumers have a very international outlook and experiment more in their product choices. Therefore they would not write off a product because it is made, let’s say in Poland or Dubai instead of France.
Differences in work culture
5. The lack of flexibility and urgency in the workforce attitudes in France has also played its role in the decline of made in France products. Years of socialist governments in France have affected the work ethic and ability of French workers. to respond quickly. French suppliers do not reply as quickly, especially not outside of working hours. Legislation encourages not to answer a work mobile outside of work hours. China is open 24/7 and 6 days a week, a phenomenon you do not experience in Europe. The use of social media messaging apps in China makes it very easy to get information outside of work hours. Accordingly this is very convenient when you work in different time zones.
The ability to problem solve and improve
6. China is working hard to compete in engineering and creative know how. The technical ability of French and other European factories cannot be questioned. When you work with good factories in Europe you get recommendations on how to achieve better results on your project. Increasingly, Chinese factories will improve in this area. UK universities are full of Chinese factory bosses children who are training to take over factories.
Areas of struggle
One area that China is still struggling to compete in is the area of essential oils and perfume essence creation. Nowadays many international companies such as CPL are actively growing in the Chinese market. However, we have yet to see home grown Chinese essence manufacturers with the noses to really compete. Consequently they may be able to create beautiful packaging and develop the moulds to manufacture high quality items. But they cannot easily fill those bottles with perfumes created by Chinese noses that set our pulses racing.
France is still strong in the manufacture and supply of premium designer fragrance and niche finished products. The ‘Made in French’ cachet is very important for many brands. It is the lower price manufacturing segment which shows the decline of France in perfumery, as creeping costs have eaten into profitability. Nowadays there are very few mass market manufacturers left and even companies like Jeanne Arthes have recently had their difficulties to continue manufacture in Grasse.
What of the future?
It is my opinion that the Chinese will continue to develop their manufacturing base and technical ability. They will compete more in the high quality premium sector of packaging and finished product supply. Conversely, the growing Chinese cost of labour and shipping costs may lead to some international buyers sourcing from other places. France is unlikely to regain its strong position in all price segments due to the high cost of doing business. Countries such as India, Vietnam, Turkey or maybe even Eastern Europe may be able to compete in the future, some China factories are already setting up business elsewhere. Salaries in the Eastern manufacturing cities of China are now way above those of Eastern Europe. Our article stiff completion for china suppliers discusses the challenges faced even by the Chinese factories nowadays to compete,