Gulf fragrance market strikes the right note

Supplied

• UAE’s Chalhoub Group hatches plans to launch in UK and France
• Ajmal Perfumes working with tech firm on region’s first AI-created scent 
• Oud fragrance, synonymous with the Middle East, has struck worldwide

Some of the Middle East’s biggest perfume makers, including Chalhoub Group and Ajmal Perfumes, are ramping up global growth plans as traditional Arabic scents gain in popularity abroad. 

Luxury brands franchisee and distributor Chalhoub is close to striking deals to export its own fragrance brand, Ghawali, to countries including the UK and France.

The first deal is expected to result in the launch of a Ghawali concession in a major department store in London or Paris later this year. 

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“We’re looking at exporting our own fragrance creations,” Chalhoub’s head of beauty innovation Forat Al Haider told AGBI.

“We’ve always been a partner for international perfume brands to sell in the region, and now we want to take something abroad that represents our culture.” 

Chalhoub distributes Christian Dior Parfums as well as beauty brands L’Occitane, Estée Lauder, Molton Brown and others in the Middle East and North Africa (Mena), India, South America and elsewhere.

It launched Ghawali in 2016, describing it as a “modern brand that bridges Western niche fragrances with contemporary Oriental”.

The first Ghawali store outside the UAE opened in Riyadh last month. 

Supplied/Chalhoub

Ajmal Perfumes is another retailer in the UAE that plans to grow internationally.

“Oud mania” has struck worldwide, according to chief executive Abdulla Ajmal, referring to the heady, musky fragrance derived from the tropical agar tree that has become synonymous with the Middle East.

“Oud is becoming popular abroad, especially as the region’s diaspora grows,” he told AGBI. “We used to cater predominantly to the Arabic market with our more traditional, oud-based scents; now, 40 percent of our sales in the UAE are to non-Arabic clientele.” 

With its diverse, expatriate population and high numbers of regional and international tourists, the UAE is a valuable market for Ajmal to test out products on a wider consumer base.

It now sells in 50 countries worldwide through airports and online. It aims to quadruple business in the next five years, and move from “being an Arabic brand to a global brand”, the chief executive said. 

Before the coronavirus pandemic, Ajmal was recording average year-on-year revenue growth of 10-12 percent, he said. This declined in 2020 but the company achieved record growth of 17 percent in 2022. 

It plans to continue growth by expanding and diversifying its collection of perfumes, colognes, oils, and home fragrance products including reed diffusers and candles.

Already 50 percent of Ajmal’s sales are of lighter, more Westernised scents as opposed to the deeper Arabic notes.

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It is also rethinking its packaging by hiring a French designer to help it shift away from its traditional gold packaging, and entering the franchise space to sell its products in stores overseas. It struck a deal last year with a retailer in India. 

Ajmal also wants to be the first company in the region to create a perfume using artificial intelligence (AI).

Perfumers elsewhere in the world have begun using data and algorithms to concoct the perfect fragrance for their target customer.

The first AI-created perfumes to be brought to market were for Brazilian cosmetics firm O Boticário in 2019, the result of a collaboration between IBM Research and fragrance manufacturer Symrise, using an AI platform called Philyra. 

“It’s early days, but we’ve teamed up with a technology company to produce an AI-driven perfume and are compiling data on the likes and dislikes of the Arabic diaspora to build the platform,” Ajmal said.

The wider Middle East and Africa flavours and fragrances market was worth $2.6 billion in 2020 and is projected to grow at a compound annual growth rate (CAGR) of 6 percent over 2023-2028 to $3.7 billion, according to Expert Market Research.

A separate study by Mordor Intelligence projected annual growth for the GCC’s fragrance and perfumes market to be higher than this, at 8.6 percent over the next five years. The market is worth around $800 million today, according to Chalhoub Group research.

According to Chalhoub’s Al Haider, growth is being driven by rising consumer spending amid a high oil price environment. But increased appetite for Arabic fragrances outside the region is resulting in greater price competition.

“Previously the region was seen as a cash cow for international players and prices reflected that,” he said. “People are now trying to bring down those price points, particularly with the introduction of VAT in the Gulf.” 

The market is becoming increasingly sophisticated, with a growing number of international brands launching products to appeal to Middle East consumers.

At the high end is Louis Vuitton’s Les Sables Rose, featuring rose, oud and ambergris. At the lower end is UK-based Confetti Group’s oud-inspired Maple and Venom ‘perfumes in a can’.  

“The lines are becoming blurred between different categories of fragrance,” explained Al Haider.

“Previously, you had oriental on one side and commercial [international brands] on the other. The commercial lines were too soft, floral and fruity for this region, while the Oriental ones were too strong for the rest of the world,” he said.

“The ‘niche’ category has bridged this gap to create a new segment. International players are creating perfumes with ingredient accords that speak to the region and its culture, while regional players are trying to appeal to Western tastes.”