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Investors scent riches in Middle East perfume

By Gavin Gibbon
A perfume shop in Sabya, Saudi Arabia. The country's fragrance sector is worth $2.3bn Alamy via Reuters
A perfume shop in Sabya, Saudi Arabia. The country's fragrance sector is worth $2.3bn
  • Huge demand for Al Majed listing
  • Mena fragrance sector worth $6.6bn
  • UAE in top five exporters

The retail offering of Al Majed for Oud Company was more than nine times oversubscribed this week, as investors rushed to buy up the first tranche of 1.5 million shares in the Riyadh-based perfume and oud products manufacturer.

The full listing of 7.5 million shares, or a 30 percent stake in the company, will raise SAR705 million ($188 million).

“The listing will diversify our investor base and strengthen our business operations to accelerate our growth and expansion strategy both locally and internationally,” said CEO Waleed Al Majed.

A date to go live on the Tadawul exchange is to be confirmed, but the huge level of demand shows how popular the fragrance sector is, not only in the home markets of the six Gulf Cooperation Council countries but throughout the world.

The fragrance industry in the Middle East and Africa is worth $6.6 billion, according to Euromonitor, with a year-on-year growth rate of 14 percent in value sales retail (retail selling price) for 2023.

Amna Abbas, senior research consultant at Euromonitor, said: “Compared globally, the Middle East region continues to be very attractive when it comes to the beauty and personal care market.”

In 2022 the top exporters of perfumes globally were France ($7.24 billion), Spain ($2.58 billion), Germany ($1.67 billion), Italy ($1.58 billion) and the UAE ($1.47 billion).

The sector has plenty of star appeal, with Georgina Rodriguez and Bruna Biancardi, the partners of Saudi Pro League football players Neymar and Cristiano Ronaldo, drafted in to promote brands in the kingdom.

Biancardi, a Brazilian influencer and model, and her boyfriend Neymar, a $100 million signing for Al Hilal, unveiled a campaign with the Saudi perfume label Ibrahim Al-Qurashi over the Saudi National Day weekend.

Rodriguez, whose partner Ronaldo plays for Al-Nassr, previously starred in a campaign for Saudi perfume label Laverne.

“There is a rise in regional brands over the years that are competing with international brands,” Abbas said.

One example is Huda Beauty, started by the US-born, Dubai-based influencer Huda Kattan in 2013, and the fragrance brand Kayali, meaning imagination, launched by her sister Mona Kattan.

A report from Bloomberg earlier this month said Huda Beauty, which has been valued at $1 billion in the past, was contemplating a sale of part or all of its perfume division, quoting unnamed sources.

The brand’s perfumes are priced at around $140 for a 100ml bottle, and are available in major retailers including Sephora USA, Walgreens Boots Alliance in the US and UK, and ASOS in the UK.

Amouage, from Oman, which is available across 80 countries in 14 stand-alone boutiques and 1,000 retail outlets, is another regional success story.

The company reported sales revenue growth of 37 percent in the first quarter of this year. In Asia Pacific, sales more than doubled and in China sales were up 75 percent year on year.

The perfume market is expected to grow from nearly $60 billion in 2023 to $101 billion by 2033, Future Market Insights predicted.

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