Scent economy rises as Gulf fragrances shape identity and status

Fragrance demand is expected to continue growing, driven primarily by the youth market, primarily comprising urban consumers aged 20 to 40, with women leading the way in consumption. (Getty)
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Updated 05 July 2025
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Scent economy rises as Gulf fragrances shape identity and status

  • Demand for high-end artisanal fragrances and the rise of online commerce are reshaping the market

RIYADH: In the Gulf, fragrance and its various perfume notes are increasingly seen not just as personal accessories but as symbols of identity, refinement, and wealth.

From morning rituals with oud to intricate perfume layering before gatherings, the scent economy is booming across the Gulf Cooperation Council region. This regional passion has fueled a multi-billion-riyal industry, deeply rooted in tradition, yet continually evolving through innovation.

According to a recent report by Research and Markets, Saudi Arabia’s perfume market is projected to grow from $2.12 billion in 2023 to $3.57 billion by 2033, registering a compound annual growth rate of 5.94 percent.

Demand for high-end and artisanal fragrances, greater ecological awareness, and the rise of online commerce are reshaping the market.

From ritual to refinement

In the Gulf, fragrance is more than just an aesthetic choice; it’s a cultural expression, often beginning with the application of Royal Cambodian oud, followed by the practice of layering complementary scents.

Both Rasasi and Lattafa Perfumes, major fragrance brands across the GCC, emphasize how deep-rooted traditions are central to the region’s distinctive scent profile.

“Scent is deeply embedded in the cultural and spiritual fabric of the Gulf. Unlike Western fragrance preferences that often lean toward freshness or minimalism, the GCC palette is bold, sensual, and opulent — driven by heritage ingredients like oud, amber, rose, and saffron,” said Talha Kalsekar, head of marketing at Rasasi Perfumes.

He added: “These are not seasonal indulgences but part of daily rituals — from welcoming guests to post-shower layering. It’s also a multi-sensory form of expression: to wear scent is to project dignity, refinement, and often, status.” 

Consumers in the GCC are no longer just buying scents — they’re curating olfactory wardrobes. They understand ingredients, appreciate craftsmanship, and are willing to spend more on exclusive blends.

Talha Kalsekar, head of marketing at Rasasi Perfumes

Echoing this, Fragrance Development Head at Lattafa Perfumes, Abdul Rahim Shaikh, said: “Scent in Gulf culture is symbolic, it signals pride, hospitality, and self-respect. Certain notes like oud, musk, rose, and amber aren’t just popular, they are integral to religious, social, and even business rituals.”

This cultural resonance influences both the composition and consumption of perfumes. From layering of oils, sprays, and incense to the use of oud, musk, rose, and saffron, these ingredients are not trends, but mainstays.

The modern customer

Both brands are experiencing a shift in their customer base, now engaging with a more informed and expressive clientele, one that values storytelling, sustainability, and personalization just as much as the quality of the scent itself.

“Consumers in the GCC are no longer just buying scents — they’re curating olfactory wardrobes. They understand ingredients, appreciate craftsmanship, and are willing to spend more on exclusive blends, limited editions, and artisanal formats,” Kalsekar said.

Lattafa highlighted this evolution as well: “They are looking for emotional connection and long-lasting quality ... The preference leans toward intense, long-lasting, and layered compositions.”

This growing discernment has given rise to gender-neutral perfumes, higher concentrations such as extrait de parfum, and niche storytelling, especially popular among younger demographics.

This is also evident in the rise of demand for full-scent experiences, including body oils, hair mists, and incense-inspired aromas.

Tech meets tradition

Innovation is a defining trait of the evolving fragrance economy. Both Rasasi and Lattafa are integrating artificial intelligence to personalize experiences and streamline product development.

“We’re actively exploring the intersection of scent and technology. While our roots are artisanal, we recognize the value of AI in streamlining formulation processes, especially for large-scale testing and trend forecasting,” said Kalsekar.

He added: “We’re also experimenting with in-store scent personalization tools — allowing customers to co-create their fragrances.”

Lattafa is also blending AI modeling with traditional craftsmanship. “While we remain deeply committed to the artistry of perfumery, we’re exploring the role of AI and personalization to enhance consumer experience. We’re currently working on tech integrations that allow for better digital scent discovery and curated recommendations across our e-commerce platforms,” Shaikh said.

Although AI can be a tool for personalizing scent creation, Shaikh emphasized that it will not replace intuition and tradition.

The digital dimension

With Saudi Arabia’s population becoming increasingly digital-savvy, brands are investing heavily in online infrastructure to align with changing shopping behaviors.

Social media and e-commerce platforms now serve as essential tools for storytelling, customer engagement, and market expansion.

In parallel with these digital shifts, Beautyworld Saudi Arabia, the largest trade fair for the aesthetics industry in the nation held in Riyadh in April, offered a tangible platform for brands to establish a physical presence in the Kingdom. 

The event also included several business matchmaking sessions and panel discussions, enabling regional and international fragrance brands to network, explore distribution deals, and assess market entry strategies for Saudi Arabia’s growing luxury sector.

Fragrance World Perfumes, for example, used its debut at the 2024 edition of the event not just as a launchpad, but as a bridge between its global digital identity and on-the-ground consumer engagement.

Operating in over 125 countries, the UAE-based manufacturer leveraged the gathering to showcase multiple fragrance lines and reinforce its commitment to the Kingdom’s growing beauty and luxury sectors.

Lattafa, in particular, is capitalizing on social media virality, citing how fragrances like Khamrah have gained traction on platforms such as TikTok and Instagram. Shaikh noted that fragrance today is not only worn but also seen and shared, becoming both a visual and cultural phenomenon.

Rasasi also views digital and physical retail as intertwined.

“Physical retail remains essential — it’s where the emotional connection to scent is first made. So we see online and offline not as competitors, but as complementary chapters of the same brand experience,” said Kalsekar.

Luxury, loyalty and local pride

Saudi Arabia is facing intense competition from both global and regional players in the industry.

While brands like Chanel and Dior retain their prestige, homegrown names like Abdul Samad Al-Qurashi and Arabian Oud dominate through cultural connection.

A half tola, or around 6 milliliters, of Royal Cambodian oud from Arabian Oud costs SR600 ($160). 

To remain competitive, physical retail continues to adapt. Ghawali, the Chalhoub Group’s fragrance brand, launched a flagship store in Riyadh’s Nakheel Mall in January 2023, blending modern design with traditional elements and preparing to unveil a Saudi-inspired fragrance collection.

Further emphasizing cultural continuity, the “Perfumes of the East” exhibition held in May 2024 under the patronage of Prince Badr bin Farhan, displayed over 200 artifacts at the National Museum in Riyadh. The show celebrated the Arab world’s enduring relationship with fragrance.

Fragrance outlook

The Eau de Parfum segment is forecasted to dominate due to its longevity and intensity, qualities valued in the region.

Fragrance demand is expected to continue growing, driven primarily by the youth market, primarily comprising urban consumers aged 20 to 40, with women leading the way in consumption.

Import duties and high costs remain barriers, but these challenges have led to a rise in regional manufacturing and increased interest in niche local offerings.


Saudi chemicals group SABIC studying IPO of its gas unit

Updated 9 sec ago
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Saudi chemicals group SABIC studying IPO of its gas unit

  • SABIC said move in line with its portfolio optimization and core business focus strategy
  • Study remains ongoing, with each option subject to necessary assessments

DUBAI: Saudi chemicals group SABIC said on Wednesday it was studying strategic options for its National Industrial Gases Company, including an initial public offering, amid a broad review of its business.

SABIC said in a statement that the move was in line with its portfolio optimization and core business focus strategy, adding that an IPO of GAS would be aimed at improving the group’s “financial position and the value added for shareholders.”

The chemicals industry has been grappling with weak demand and high input costs, leading to lower prices and squeezed margins.

SABIC, one of the world’s largest petrochemical companies and 70 percent-owned by oil major Saudi Aramco, reported in May a first-quarter net loss of $323 million, citing a rise in operating costs and high feedstock costs.

Earlier this year, it also said it planned to cut costs and find new investment opportunities, while restructuring some core assets and offloading non-core businesses.

It has already divested its stakes in Aluminium Bahrain, or Alba, and steel business Hadeed, selling both to other state-backed Saudi entities.

SABIC said on Wednesday that “the study remains ongoing, with each option subject to the necessary financial, technical, regulatory and economic assessments.”

Its shares have fallen 16.3 percent since the beginning of the year, according to LSEG data.


Oil Updates — prices ease from two-week highs as investors await tariff clarity

Updated 50 min ago
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Oil Updates — prices ease from two-week highs as investors await tariff clarity

  • Tariff uncertainty weighs on oil prices
  • US inventories probably rose last week, industry sources’ data showed

SINGAPORE: Oil prices edged lower on Wednesday after rising to two-week highs in the previous session, weighed down by investors waiting for clarity on new US tariffs and expectations of rising crude inventories in the US.

Brent crude futures slipped 15 cents, or 0.2 percent, to $70 a barrel by 8:01 a.m. Saudi time. US West Texas Intermediate crude fell 16 cents, or 0.2 percent, to $68.17 a barrel.

US President Donald Trump’s latest tariff delay provided some hope to major trade partners Japan, South Korea and the European Union that deals to ease duties could still be reached, while bewildering some smaller exporters such as South Africa, and leaving companies with no clarity on the path forward.

Trump pushed Wednesday’s previous deadline to Aug. 1, a date he said on Tuesday was final, declaring: “No extensions will be granted.”

He also said that he would impose a 50 percent tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals, broadening a trade war that has rattled markets worldwide.

“Bearish (price) drivers include uncertainties surrounding the implementation of various types of US tariffs (country-specific and sector-specific goods-based) and potential production hikes from OPEC+,” said OANDA senior market analyst Kelvin Wong.

There is concern that the tariffs could curb demand for oil, and while there was strong travel demand during the US July 4 holiday weekend, data from industry sources showed possible crude inventory builds in the US of around 7.1 million barrels, though fuel products’ stocks were lower.

“Numbers from the API overnight were bearish for oil,” said ING analysts in a client note, adding that “changes in refined products were more constructive.”

Official data from the US Energy Information Administration is scheduled for 4:30 p.m. on Wednesday.

OPEC+ oil producers were set for another big output boost for September as they complete both the unwinding of voluntary production cuts by eight members, and the United Arab Emirates’ move to a larger quota, five sources said.

This followed a Saturday announcement from the group approving a 548,000 barrels per day supply increase for August.

“Oil prices have stayed surprisingly resilient in the face of accelerated OPEC+ supply additions,” said DBS Bank’s energy sector team lead Suvro Sarkar.

Sarkar attributed the support to peak seasonal demand and the expectation that on-the-ground supply would not increase as much because some OPEC+ members would compensate for having overproduced earlier.

On the longer-term supply side, the US will produce less oil in 2025 than previously expected as declining oil prices have prompted US producers to slow activity this year, the Energy Information Administration forecast on Tuesday in a monthly report. 


Foreign currency sukuk issuance projected to reach $80bn in 2025

Updated 09 July 2025
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Foreign currency sukuk issuance projected to reach $80bn in 2025

  • Foreign currency sukuk issuances rose 8.94% year on year to $41.4 billion
  • Sustainable sukuk issuance surged 275 in the first half of 2025 to $9.3 billion

RIYADH: The global sukuk market is poised to maintain its strength in 2025, with foreign currency-denominated issuances expected to reach between $70 billion and $80 billion, according to a new report by S&P Global.

In the first half of 2025, foreign currency sukuk issuances rose 8.94 percent year on year to $41.4 billion, driven by increased activity in the UAE, Bahrain, and Kuwait. Saudi Arabia remained a key player, contributing 38.9 percent of the total market volume, as local banks continued to support Vision 2030-related initiatives.

Earlier this year, Fitch Ratings shared a similar outlook, forecasting that Saudi Arabia would remain a major driver of US dollar-denominated sukuk and debt issuance in 2025 and 2026. Banks in the Kingdom alone are expected to issue over $30 billion as institutions seek to diversify their funding sources.

The increase in global sukuk issuance came despite external headwinds, including new US tariffs and delayed interest rate cuts. S&P noted that issuers in core Islamic finance markets took advantage of brief periods of market stability to secure funding.

“We expect performance in the second half of the year to depend on the evolving geopolitical situation in the Middle East. However, since we don’t expect a full-scale regional war, we think the resilient foreign currency issuance trends observed in the first half will continue,” S&P Global said in the report.

“It will also be supported by the Fed’s expected reduction in interest rates. Therefore, we maintained our forecasts for foreign currency-denominated issuances to reach about $70 billion to $80 billion for the full year in 2025,” it added.

Foreign currency sukuk issuance had already climbed to $72.7 billion in 2024, a 29 percent increase from the previous year, supported by significant financing needs in Islamic finance hubs and fiscal pressures due to lower oil prices.

According to S&P, geopolitical tensions are not expected to significantly disrupt issuance this year. Instead, market activity will hinge on the direction of monetary policy, domestic liquidity conditions, and investment trends in key Islamic finance countries.

Local currency issuance

Despite the robust performance of foreign currency sukuk, total sukuk issuance globally fell 15 percent in the first half of 2025 to $101.3 billion. The decline was largely due to a steep drop in local currency sukuk, which fell to $59.8 billion from $81 billion a year earlier. Malaysia, Saudi Arabia, Qatar, and the UAE all reported weaker domestic issuance.

S&P attributed this to liquidity constraints in some markets and improved fiscal performance in others, reducing the need for domestic borrowing.

“For example, we have observed a significant drop in local currency issuances in Saudi Arabia, where banks’ liquidity is instead being channeled into financing Vision 2030. The drop was mainly underpinned by lower issuances from the government,” the agency said.

Shariah Standard 62

S&P also pointed to ongoing uncertainty surrounding the implementation of Shariah Standard 62 by the Accounting and Auditing Organization for Islamic Financial Institutions .

In April, AAOIFI announced amendments to the draft standard following industry feedback but did not provide details or a timeline.

The proposed guidelines aim to harmonize key elements of the sukuk structure, including asset backing, ownership transfer, and trading rules.

“The implementation process following the amendment is also uncertain. This means that it is now very difficult to determine the implications of adopting the new standard on market performance,” S&P noted.

“The need to issue prior to the adoption of the standard may also abate since issuers and investors no longer perceive the disruption as imminent,” it added.

Fitch Ratings had earlier warned that the standard could significantly reshape the sukuk market and potentially increase fragmentation if adopted in its current form.

Sustainable sukuk

Sustainable sukuk issuance surged 27 percent in the first half of 2025 to $9.3 billion, up from $7.4 billion in the same period last year, according to S&P.

Banks, led by the Islamic Development Bank, accounted for nearly half of the total, followed by corporates from the GCC and Malaysia. These instruments fund environmentally friendly projects such as renewable energy and green infrastructure.

Saudi issuers dominated the market, accounting for over 60 percent of total sustainable sukuk issuance. S&P attributed this to the alignment of Islamic finance with sustainability principles, the central role of the Islamic Development Bank, and strong funding demand from local banks.

In January, Fitch projected that outstanding ESG sukuk globally would exceed $50 billion in 2025, with Saudi Arabia playing a leading role.

The total value of ESG-focused sukuk climbed 23 percent year on year to $45.2 billion in 2024, according to Fitch.

In February, Saudi Arabia also raised €2.25 billion ($2.36 billion) through a euro-denominated bond offering under its Global Medium-Term Note Program, including its first green tranche.


Saudi chocolate industry expands as Riyadh leads in manufacturing registrations

Updated 09 July 2025
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Saudi chocolate industry expands as Riyadh leads in manufacturing registrations

  • Riyadh region topped the list with 1,490 active commercial registrations
  • Saudi chocolate market projects to reach $1.53 billion by end of decade

JEDDAH: Saudi Arabia’s cocoa and chocolate manufacturing sector is seeing growing entrepreneurial interest, with the number of active commercial registrations reaching 3,532 by the end of June.

A report by the Ministry of Commerce revealed that the Riyadh region topped the list with 1,490 active commercial registrations, followed by the Makkah region with 909 and the Eastern Province with 416. Al-Qassim and Madinah ranked fourth and fifth with 213 and 149 filings, respectively.

The chocolate manufacturing landscape in the Kingdom has evolved considerably, establishing itself as the largest producer among Gulf Cooperation Council countries, according to a release by Mordor Intelligence, a market research firm specializing in data-driven industry insights.

“The industry has shown remarkable progress in adopting advanced manufacturing technologies and sustainable practices, particularly in response to increasing consumer demand for premium chocolate products,” the release highlighted.

The analysis, published in May, indicates that Saudi Arabia had over 1,000 chocolate-producing facilities in 2023, with Riyadh accounting for around 35 percent of these production sites.

It also notes that the country’s chocolate market is segmented by confectionery variants — dark, milk, and white chocolate — and by distribution channels, including convenience stores, online retail, supermarkets, and others.

The report highlighted that this strong manufacturing base enables the country to produce around 50 percent of its chocolate domestically, thereby reducing reliance on imports while maintaining high-quality standards.

The firm estimates the Saudi chocolate market size at $1.23 billion in 2025 and projects it to reach $1.53 billion by the end of the decade, growing at a compound annual growth rate of 4.5 percent during the forecast period from 2025 to 2030.

“The Saudi Arabia chocolate market is experiencing significant transformation driven by changing consumer demographics and preferences. With over half the population under 25 years old as of 2023, the market is heavily influenced by younger consumers who are increasingly health-conscious yet maintain strong chocolate consumption patterns,” the Mordor Intelligence study stated.

It added that this demographic shift has led to interesting consumption patterns, with “studies showing that two-thirds of Saudi children consume chocolate twice daily in 2023.”

The firm believes that consumer spending patterns in the Kingdom’s chocolate market reflect the country’s growing affluence and changing preferences.

“In 2023, the annual chocolate expenditure per person in Saudi Arabia reached $41, significantly higher than the Middle Eastern average of $4. This high per capita spending is particularly noteworthy given that over 66 percent of consumers in Saudi Arabia claimed they were willing to pay more for quality products in 2022,” the analysis said.

The study noted that the trend toward premiumization has prompted chocolate manufacturers in the Kingdom to introduce more sophisticated product lines and innovative flavor combinations.

According to Mordor Intelligence’s global chocolate market analysis, the industry is experiencing a notable shift in consumption patterns, particularly in established markets where sophisticated consumer preferences are driving product innovation.

“Europe stands as a testament to this trend, processing 35 percent of the world’s cacao and accounting for 45 percent of global chocolate consumption in 2022. Switzerland leads this consumption pattern with an impressive chocolate consumption per capita of 11 kg in 2022, setting benchmarks for premium chocolate consumption globally,” the firm said in its release.

It added that this high consumption rate has encouraged manufacturers to expand their premium product lines and experiment with new flavors and formulations.

The company further reported that global chocolate demand is rising, driven by increased per capita consumption and a strong gifting culture. It added that Europe leads consumption, accounting for nearly 48 percent of the market, with the UK and Switzerland having the highest per capita rates.


Closing Bell: Saudi main index slips to 11,294

Updated 09 July 2025
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Closing Bell: Saudi main index slips to 11,294

  • Parallel market Nomu edged down by 119.05 points to close at 27,343.79
  • MSCI Tadawul Index declined by 0.35% to 1,449.23

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, shedding 51.39 points, or 0.45 percent, to close at 11,294.07. 

The total trading turnover on the benchmark index reached SR5.32 billion ($1.42 billion), with 65 stocks advancing and 187 declining. 

The Kingdom’s parallel market Nomu also edged down by 119.05 points to close at 27,343.79, while the MSCI Tadawul Index declined by 0.35 percent to 1,449.23. 

The best-performing stock on the main market was Arabian Centers Co., also known as Cenomi Centers, with its share price rising 7.60 percent to SR21.10. 

Arabian Drilling Co. also gained 5.66 percent to close at SR88.60, while Tourism Enterprise Co. climbed 5.49 percent to SR0.96. 

BAAN Holding Group Co. shares slipped 4.35 percent to SR2.42, ranking among the weaker performers of the day. 

On the announcement front, Alinma Bank launched a US dollar-denominated sukuk under its Trust Certificate Issuance Program, with the offering opening and closing on July 8, according to a Tadawul filing. 

The sukuk, which has a five-year maturity, requires a minimum subscription of $200,000, with increments in multiples of $1,000.

The bank noted that the sukuk will be listed on the International Securities Market of the London Stock Exchange, and issued in reliance on Regulation S under the US Securities Act of 1933. 

Following the announcement, Alinma Bank’s share price declined 0.74 percent to SR27. 

Meanwhile, Riyad Bank announced it had completed the issuance of US dollar-denominated Tier 2 trust certificates under its International Trust Certificate Issuance Program, with a total value of SR1.2 billion. 

According to a Tadawul statement, the bank issued 6,250 certificates, each with a nominal value of $200,000. These certificates will also be listed on the London Stock Exchange’s International Securities Market. 

Riyad Bank’s share price edged down 0.07 percent to close at SR28.88.