The rise of the Saudi perfume market

The rise of locally produced Saudi perfumes poses an opportunity for investors no longer restricted to international brands. (Shutterstock)
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Updated 12 May 2024
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The rise of the Saudi perfume market

  • Sector mirrors the Kingdom’s opulent lifestyle and its people’s historical connection to scents

RIYADH: Saudi Arabia, with its rich cultural heritage and burgeoning economy, presents a complex study of contrasts and traditions, particularly in its luxury perfume market.

This sector, deeply ingrained in Saudi society, mirrors the Kingdom’s opulent lifestyle and its people’s historical connection to scents.

With the market’s valuation at $1.8 billion in 2023 and anticipated growth to $2.6 billion by 2032, the Kingdom’s perfume industry is a testament to the cultural significance of fragrance. 

According to data from the Ministry of Commerce, exports amounted to SR416 million ($110.9 million) for 10 months of 2023, compared to imports, mostly from European countries, amounting to SR1.1 billion during the same period.

The rise of locally produced Saudi perfumes poses an opportunity for investors no longer restricted to international brands.

The number of commercial registrations granted to practice the manufacturing and bottling of perfumes in Saudi Arabia further demonstrates the rising tendency of citizens to invest in the industry.

According to data from the ministry, the number of existing commercial records for perfume manufacturing activity in the Kingdom reached 1,263 by the end of 2023.

Moreover, the push for female empowerment and increased tourism are expected to buoy the market further, making it an appealing sector for investors and entrepreneurs.

An inclination toward luxury and tradition

In the heart of Saudi Arabia’s scent market lies a preference for luxury and tradition. Premium products dominate the scene, reflecting a societal penchant for high-quality ingredients and prestigious brand associations. 

Chandra Mohan, the assistant vice president at research firm P&S Intelligence, told Arab News that the demand for premium fragrances is increasing due to rising personal disposable income and surging consumer awareness about the benefits of using extravagant perfumes.

Data gathered by his firm revealed that the luxury category held the larger share of the Kingdom’s scent market in 2022, accounting for almost the entirety of the sector at 90.9 percent. 




With their complex profiles and traditional ingredients, Arabic perfumes command a significant market share. (Shutterstock)

“Premium perfumes are made up of high-quality ingredients, which differentiate them from other cheap products. These are also concentrated and long-lasting and are designed to evolve and offer more sophisticated and refined experience,” Mohan explained.

“Nowadays, people are also becoming more conscious about brands and shifting toward quality and premium products, as they have high spending power. Thus, the growing usage of premium products is contributing to the growth of the market in the country,” he added.

The inherent quality and luxury of the Saudi perfume market, driven by the cultural significance of scents such as oud and musk, have contributed to the industry’s success.

With their complex profiles and traditional ingredients, Arabic perfumes command a significant market share. 

Their popularity is a nod to the region’s cultural heritage, where these fragrances are more than just scents: They are a bridge to the past and a celebration of Arab identity.

Demonstrating this, oriental perfumes accounted for the largest revenue share of the Saudi perfume market, accounting for 65.77 percent in 2022, according to a report by P&S Intelligence. 

The report further noted that this category is expected to grow by 6 percent from 2023 to 2030. 

FASTFACTS

• With the market’s valuation at $1.8 billion in 2023 and anticipated growth to $2.6 billion by 2032, the Kingdom’s perfume industry is a testament to the cultural significance of fragrance.

• The number of commercial registrations granted to practice the manufacturing and bottling of perfumes in Saudi Arabia further demonstrates the rising tendency of citizens to invest in the industry.

The craftsmanship behind these fragrances, often passed down through generations, adds layers of depth and sophistication, making them highly sought after locally and internationally.

The inclination toward premium fragrances connects back to deep-rooted cultural practices where perfumes served as an extension of personal identity and social standing, the owner of Saudi perfume brand “Nabdh,” Zaynah Al-Hamza, told Arab News. 

The digital age and celebrity branding

The digital landscape has transformed how perfumes are marketed and sold in Saudi Arabia. 

E-commerce, bolstered by the pandemic, has become a critical channel for reaching consumers, with many brands expanding their online presence.

“In recent times, developments in information and communication technologies, particularly social media, have revolutionized the way marketing activities take place. Social media has surfaced as a cost-effective and efficient information exchange platform for all,” Mohan said.

“Celebrities are also promoting several brands on social media and people are increasingly buying those products because of celebrity influence,” he added.

In March 2023, Portuguese influencer Georgina Rodriguez starred in social media adverts for Saudi fragrance brand Laverne, which later collaborated with global supermodel Taylor Hill. 




The push for female empowerment and increased tourism are expected to buoy the market further. (Supplied)

Perfume companies partner with celebrities to increase brand awareness and drive website traffic and sales, the P&S global report said, adding that this tactic also aids in generating engagement, creating a community, and serving as a channel for customers.

This shift has made the Saudi luxury perfume market more accessible and has opened up new avenues for brands to engage with their audience through social media and online marketing.

The interplay between tradition and modernity and embracing digital methods sets the stage for a dynamic future in the Saudi fragrance industry.

The unisex phenomenon

Unisex fragrances, capturing the largest market share, indicate a progressive shift in consumer behavior. This trend underscores a growing acceptance of products that transcend traditional boundaries, with scents like oud, musk, and amber being used for scents that appeal to all customers. 

“Another key trend observed in the market is the rising demand for unisex perfumes. This is because people have different tastes and a large number of individuals are looking for an aroma that is not only feminine but also masculine,” the P&S analyst said. 

“Moreover, anyone can wear them, and it allows sharing and swapping collections among different genders. Furthermore, unisex perfumes are neutral in odor and millennial consumers are mostly choosing products with inimitable fragrances in order to build up their personality and individuality,” he added.

These preferences highlight the changing landscape of the Saudi market, which, despite its traditional foundations, is receptive to modern influences.


Xi calls for more jobs for youth, migrant workers

Updated 28 May 2024
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Xi calls for more jobs for youth, migrant workers

  • (We should) insist that employment of young people including college graduates is a top priority: Chinese president

BEIJING: China’s President Xi Jinping called on Monday for efforts to promote high-quality and sufficient jobs for college graduates and migrant workers, while presiding over a Politburo group study session, state media Xinhua reported on Tuesday.

“(We should) insist that employment of young people including college graduates is a top priority,” the Xinhua report quoted Xi as saying at a group study session of the Politburo, a top decision-making body of the ruling Communist Party.

The Xinhua report did not give details on job promotion support measures or plans.

The survey-based jobless rate for 16-24 year-olds, excluding college students, was 14.7 percent in April, down from 15.3 percent in March, official data showed last week.

China’s statistics bureau revised its methodology by removing college students from the survey pool after youth jobless rate surged to around 20 percent last year.

Xi also said the government should take steps to promote the employment of migrant workers, guide them to return to their hometowns and for people to start businesses in the countryside.

He called for stabilizing the income of people who had been lifted out of poverty and preventing large-scale return to poverty due to unemployment, Xinhua said.

Companies and industries with strong job creation capabilities will be supported, the report said.

China created 4.36 million new urban jobs in the first four months, Human Resources Ministry data showed, 36 percent of its annual job creation target.


Saudis spent more money on electronic devices during the 4th week of May: SAMA data

Updated 28 May 2024
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Saudis spent more money on electronic devices during the 4th week of May: SAMA data

RIYADH: Saudi Arabia’s point-of-sale spending reached SR11.2 billion ($2.98 billion) in the fourth week of May, official figures showed.

The latest data from the Saudi Central Bank, also known as SAMA, revealed that spending on electronic and electric devices surged by 9.5 percent to reach SR240.4 million.

Beverages and food, which accounts for the largest share at 14.9 percent, saw a 5.9 percent decline, reaching SR1.66 billion, during the week from May 19 to 25.

Meanwhile, transactions at restaurants and cafes, holding a 14.6 percent share, recorded a slower decline of 4.8 percent, amounting to SR1.64 billion. 

Saudi spending on miscellaneous goods and services, including personal care items, supplies, maintenance, and cleaning, constituted the third-highest share and witnessed a 5.1 percent decline that week, reaching SR1.36 billion. 

Despite composing only 1 percent of the week’s overall POS value, spending on education recorded a minimal increase of 0.1 percent to SR152.48 million.

In the past few years, this sector has been allocated the largest share of government expenditure in comparison to other divisions of the economy. 

Efforts are underway to revamp the education system, aiming to equip the national workforce with the necessary skills to thrive in a technological and information-centric global economy.

The hotel sector experienced the largest decline in POS transaction value, dropping 10.9 percent to SR227.13 million.

According to data from SAMA, 35.44 percent of POS spending occurred in Riyadh, with the total transaction value reaching SR3.97 billion. However, this represents a 1.6 percent decrease from the previous week.  

Riyadh has undergone considerable expansion, evolving into a pivotal center for growth and progress. The city is witnessing a surge in new businesses setting up operations, drawn by its vibrant economic landscape and strategic prospects for investment and innovation.

Spending in Jeddah followed closely, accounting for 14.3 percent of the total and reaching SR1.60 billion; however, it marked a 3.1 percent weekly drop. 

The two cities that registered the highest declines in POS spending were Makkah and Madinah, with decreases of 11 percent and 6.8 percent, respectively. The value of transactions in Makkah reached SR380.98 million, while in Madinah, it was SR393.26 million.


Saudi healthcare to advance with major digital tech partnership

Updated 28 May 2024
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Saudi healthcare to advance with major digital tech partnership

RIYADH: The Saudi healthcare system is set to advance as two of the country’s major companies partner to leverage digital technologies to enhance the Kingdom’s capabilities.

SAMI Advanced Electronics Co., a wholly owned subsidiary of SAMI, the nation’s defense and digital solutions provider, has signed a cooperation agreement with the National Unified Procurement Co., a Public Investment Fund company.

The agreement, signed on May 27, will provide solutions for medication tracking and IT infrastructure and increase local content through medical devices manufacturing and maintenance.

This partnership demonstrates SAMI-AEC’s unremitting efforts to build a harmonious and applicable healthcare system in Saudi Arabia based on digital technologies.

Ziad Al-Musallam, CEO of SAMI-AEC, commented on the agreement, saying that they are honored to collaborate with NUPCO, as this deal underscores the unwavering commitment of both entities to bolstering efforts aimed at enhancing the healthcare ecosystem in Saudi Arabia.

“At SAMI-AEC, we firmly believe in the significance of augmenting public health services through digital solutions and delivering e-health services. This involves integrating effective, fast technologies to empower the healthcare sector, aligning with the objectives of Saudi Vision 2030,” he said.

Fahad Al-Shebel, CEO of NUPCO, highlighted the agreement’s importance and its role in fortifying the healthcare infrastructure and facilitating access to the integrated technology offered by SAMI-Advanced Electronics Co.

Aiming to upgrade the healthcare sector by improving its facilities in all public hospitals and medical centers in the Kingdom, NUPCO is the country’s largest central company providing medical purchasing, storage, and distribution services for medicines, devices, and supplies.

With a workforce of over 3,320 individuals, 85 percent of whom are Saudi nationals, SAMI-AEC has positioned itself as a leader in electronics, technology, engineering, and manufacturing. Its services span sectors such as defense and aerospace, digital, energy, and security.

Over 800 of the company’s employees are engineers and certified experts, reaffirming the dedication of SAMI-AEC, which was established in 1988, to excellence and innovation.

On the other hand, NUPCO was established in 2009 with SR1.5 billion in capital. It is the leading company in Saudi Arabia in procurement, logistics, and supply chain management for pharmaceuticals, medical devices, and supplies for governmental hospitals.


Closing Bell: Saudi main index continues downward trend to close at 11,660

Updated 28 May 2024
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Closing Bell: Saudi main index continues downward trend to close at 11,660

RIYADH: Saudi Arabia’s Tadawul All Share Index continued its downward movement for the third consecutive session this week, as it shed 171.28 points to close at 11,659.94 on Tuesday. 

The total trading turnover of the benchmark index was SR5.34 billion ($1.42 billion), with 23 stocks advancing and 202 declining. 

The Kingdom’s parallel market, Nomu, also slipped by 0.81 percent to 26,234.79, while the MSCI Tadawul Index shed 20.97 points to close at 1,449.44.

The best-performing stock on the main index was Sustained Infrastructure Holding Co. The firm’s share price soared by 6.2 percent to SR34.25.

Other top performers were the Mediterranean and Gulf Insurance and Reinsurance Co. and AYYAN Investment Co., whose share prices edged up by 3.98 percent and 3.63 percent respectively. 

The worst-performing stock on the benchmark index was Saudi utility giant ACWA Power, as its share price slid by 4.68 percent to SR456.60. 

On the announcements front, Etihad Atheeb Telecommunication Co. said that it was awarded two projects worth SR45.51 million by Technical and Vocational Training Corp. to provide dedicated Internet services in 77 locations. 

In a Tadawul statement, the telecommunication provider said that the first project has a value of SR23.64 million, while the second one amounts to SR21.87 million. 

Meanwhile, Mouwasat Medical Services Co. announced that its shareholders have approved the board’s recommendation to distribute a 17.5 percent cash dividend, or SR 1.75 per share for 2023. 

In March, Mouwasat Medical Services Co. had revealed that its net profit witnessed a growth of 10 percent in 2023 to SR657.7 million, compared to the previous year. 

Al Moammar Information Systems Co., on Tuesday, revealed that it received new orders to increase the capacity of data centers at a total value of SR 75.2 million. 

In a statement to Tadawul, the company added that further developments of the order will be unveiled in due course. 


PIF’s Halal Products Development Co. invests in Singapore-based cosmetics firm

Updated 28 May 2024
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PIF’s Halal Products Development Co. invests in Singapore-based cosmetics firm

RIYADH: In a bid to localize the Kingdom’s cosmetics and personal care industry, the Halal Products Development Co. announced an investment in a Singapore-based fast-moving consumer goods conglomerate.

The Public Investment Fund-owned company signed a binding agreement with Believe — a company specializing in the halal cosmetics and personal care field.

As per the agreement, the company will relocate its headquarters from Singapore to Saudi Arabia and establish a factory to manufacture its products, the Saudi Press Agency reported.

The new headquarters will also serve as a major center for exporting the company’s products to various countries of the world.

This move is in line with the PIF-owned firm’s goal to strengthen the halal industries in Saudi Arabia and provide high-quality products compatible with Islamic standards.

Halal Products Development Co. CEO Fahad Al-Nuhait said that investing in this sector is a very important first step that serves as a major catalyst for developing and localizing the manufacturing of halal cosmetics and personal care.

In return, this is expected to raise the efficiency of the sector and support research as well as development efforts to improve the services provided locally and globally, Al-Nuhait added.

The CEO said it will also facilitate the transfer of the expertise and resources to the Kingdom.

Moreover, it will also contribute to achieving the goals of the Kingdom’s Vision 2030 by creating direct and indirect job opportunities.

Believe CEO Ankit Mahajan said this partnership represents a strategic opportunity to expand the scope of investment and boost manufacturing capabilities.  

The agreement will also provide contract manufacturing services for local brands in the initial stage and will expand to international brands in the future.

In August, Halal Products Development Co. signed a strategic cooperation agreement with the Saudi Exports Development Authority to launch the Halal Products Manufacturing Accelerator Program.

According to a statement, the new program came amid the Kingdom’s efforts to become a global hub for halal food products and accelerate the growth of the sector.