Fragrances in Saudi Arabia

PRE-COVID-19 PERFORMANCE

Demand for fragrances under pressure despite strong local fragrance culture

Sales of fragrances remained under pressure in Saudi Arabia during 2019 as huge numbers of expatriates continue to leave the Kingdom as the government’s Saudisation programme has left many foreigners out of work and struggling to find new positions. In addition, the imposition of residence fees on foreigners, including especially high fees for dependent women and children, have discouraged many expatriate families from continuing to live in the country.

Arabian Oud Co maintains its leading position amidst stiff competition

2019 saw Arabian Oud Co maintain its leading position in fragrances. The company holds numerous advantages in the category, not least the large number of mono-brand retail outlets it operates, its consistent and strong promotional campaigns and the sheer diversity of its products range.

Premium unisex fragrances leads growth as retail distribution expands

Premium unisex fragrances witnessed the highest sales growth of any fragrances category in 2019 and this can be attributed mainly to the increasing numbers of retail outlets offering these products. In addition, the regular launch of new products from both Western and Oriental fragrances brands such as Gucci The Alchemist’s Garden and Gucci Mémoire d'une Odeur also sparked consumer interest, while the entry of new players such as Armani Beauty played a role as well.

2020 AND BEYOND

COVID-19 impact

Sales of fragrances are now expected to decline by 9% in 2020 in 2019 constant value terms in light of the impact of COVID-19. This represents a far worse performance than the expected marginally negative growth forecast for 2020 during research conducted at the end of 2019 before the spread of COVID-19.

Affected products within fragrances

Premium fragrances is expected to be less severely affected than mass fragrances by the impact of COVID-19, social distancing and the subsequent economic recession. In general, Saudi consumers tend to prefer premium fragrances, which are seen as being more useful due to their more attractive scents.

Recovery and opportunities

Although sales of fragrances are expected to have taken a massive hit as a result of COVID-19, it is likely that sales will rebound quickly once the situation in Saudi Arabia is normalised and daily life returns to normal. The main reason for the significant sales declines seen in fragrances over the first half of 2020 is that social distancing removed the imperative for consumers to wear fragrances as they spent much less time socialising and working outside of the home.

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