The fragrance market in the U.A.E. is expanding rapidly owing to the rising disposable income and desire for custom-made, natural, and environment-friendly perfumes. Moreover, the rising investments in advertising and marketing campaigns, increasing volume of digital marketing activities, and growing relevance of personal grooming are also contributing to the growth of the market. Because of these factors, the market generated $720.2 million revenue in 2020, and it would show significant growth during the forecast period (2021–2030).
The impact of the COVID-19 pandemic on the U.A.E. fragrance industry has been negative. The supply and demand chains have been disrupted as a result of the nationwide lockdown. Moreover, since the lifting of the lockdown, manufacturing plants have been working under constraints, which is still resulting in lower-than-before production.
The U.A.E. fragrance market is classified into men, women and unisex, on the basis of consumer group. Among these, the unisex category held the largest share in 2020. This can be attributed to the increasing demand for unisex fragrances as they can be worn by both men and women. Younger generations are experimenting with new forms of expression and self-identity. Fragrance companies are recognizing this by designing perfumes that aren't gender specific.
Further, the market for fragrance in the U.A.E. is bifurcated into luxury product and mass product, on the basis of type, of which the luxury product bifurcation held the larger market share in 2020. It is also predicted to witness substantial growth during the forecast period owing to the higher preference for luxury products over mass products. This is being supported by millennials' growing brand awareness and increasing spending on luxury items.
Geographically, the largest cities in the U.A.E. fragrance market were Dubai and Abu Dhabi in 2020. This can be ascribed to the presence of a large number of industry players, high disposable income, and growing digital marketing activities here.
Players in the market for fragrance in the U.A.E. have been involved in mergers and acquisitions to enhance their market presence. For instance, in November 2020, Symrise AG signed a purchase agreement with Sensient Technologies Corporation (Milwaukee, U.S.) to acquire its fragrance and aroma chemicals activities. These include a variety of aroma molecules and fragrances derived from natural, renewable resources. Symrise will strengthen its backward integration and broaden its position as a supplier of fragrance ingredients, which are increasing in demand, particularly in personal and homecare products, with the acquisition.
Similarly, in April 2020, L'Oréal SA completed its acquisition of the Clarins Group’s fragrance division, which includes Mugler and Azzaro, as part of a stronger push for perfumes that the former company believes will be important for its business growth.
Some of the major players operating in the U.A.E. fragrance market are LVMH Moët Hennessy Louis Vuitton, Guccio Gucci S.p.A., Eurofragance SLU, Rasasi Perfumes Industry LLC, Yas Perfumes, The Fragrance Kitchen, Al Haramain Perfumes, and Calvin Klein Inc.