Global Fragrance Market
Walk through any of the United Arab Emirates’ (UAE) large, air-conditioned shopping malls, and the scent of
spicy, Arabic perfume abounds. Shoppers encounter a dizzying array of scents presented, sprayed, and waved
through the air at every turn. Demand in the global fragrances market was expected to be strong through 2014,
primarily due to the rise in spending in developing countries. Industry experts predicted healthy sales and a grow-
ing fragrance manufacturing industry within the region. The UAE and other countries in the Gulf Cooperation
Council (GCC) have a strong and unique culture that favors the appreciation of perfumery.
Stemming from a tradition and culture dating back thousands of years, both men and women in the Gulf
like to apply layer upon layer of fragrances which linger long after the wearer has moved on. Arabic perfumes are
made from oud, a rare and hugely prized oil found in agar wood. The tree that produces oud goes back thousands
of years in culture and tradition, and grows in some of the world’s most dense forests in India and Southeast Asia.
Known not only for its distinctive scent, natural oud is also more expensive, weight for weight, than gold. The
director of Swiss Arabian Perfumes in Sharjah, Adam Ali, United Arab Emirates, asserted that the highest-quality
oud came from trees older than 100 years, but “that stock is completely gone.” 1 Nonetheless, the popularity of
oud-based perfumes continues to grow, and today, due to the shortage in supply and increasing costs, perfumers
use a blend of natural and synthetic oud.
Global Competition
While popular perfumes in the Middle East markets were ouds, ambers, and musks, lighter and softer perfumes
had traditionally been preferred in the United States. However, consumer preferences were changing. The large,
branded fragrance companies were increasingly expanding their Middle East presence and adding to their port-
folios to meet consumer penchants for Arabian scents.
For example, one of Yves Saint Laurent’s classic and best-selling perfumes was Opium, an amber perfume
that was oriental and spicy. Estée Lauder added Wood Mystique to their product line, an oud perfume with an
oriental woody fragrance inspired from the heritage of the Middle East. Allure Perfume by Chanel was a refresh-
ing, oriental, floral fragrance. The contemporary best-selling perfumes, including Sarah Jessica Parker’s Lovely
and Justin Bieber’s Someday, had a musk note. The oud Arabian-style theme was evident in Guerlain’s best-selling
perfume Shalimar, and the recently introduced Les Déserts d’Orient, as well as in Christian Dior’s Leather Oud.
Each year, more perfumes were introduced to stimulate consumer demand and increase sales. International
fragrance companies had substantial resources and acted globally, not only to innovate their portfolios with Ara-
bic scents, but also to leverage their favorable brand recognition. Effective marketing, which included extensive
research, advertising, sales, and promotion, was targeted to consumers to establish the right image that would
Ligaya, A. “For a Coveted Resin, the Scent of Rarity Takes Hold; Oud Oil Perfumes Soar in Price as Global Supply and
Quality Start to Fade,” The International Herald Tribune, 2011.
1
Copyright © 2013 Thunderbird School of Global Management. All rights reserved. This case was prepared by Dr. Laura L.
Matherly, Dr. Anup Nandialath, and Dr. Claire Richards, College of Business, Zayed University, United Arab Emirates for the
purpose of classroom discussion only, and not to indicate either effective or ineffective management. Special thanks to Mr. Shahzad
Haider, Chairman of Fragrance Foundation Arabia, for his insightful contributions.
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
induce customers to identify with and purchase a perfume. These companies had well-established capabilities in
new product development and line extensions and provided quality products with innovative features, packag-
ing, merchandising, and sales support. Responding to unfavorable economic conditions in developed countries,
they were flexible and had the means to grow sales in developing markets.
More and more, the Middle East was viewed as a key market for growing sales. To illustrate, in 2011, Revlon
reported an overall 4.5% growth, where markets such as Europe, the Middle East, and Africa offset the lower
sales in other parts of the world. This increase was driven primarily by higher sales of fragrances.
Designer niche brands, perfumes that were produced in smaller quantities and distributed more selectively
than mass-market scents, were often launched in the UAE. For example, Hennessy’s Arabian Nights collection
(Pure Oud, Incense Oud, and Rose Oud) was specifically developed to attract the high-end Middle Eastern
market. “The Arabian Nights fragrances are an attempt at fusion perfumery; a mingling of East and West, with
Eastern flavors and essential oils mixed in a classically French way.” 2 What is more, Hennessy’s perfumes were very
expensive; e.g., Arabian Nights sold for more than US$400 an ounce. The costs were high due to the ingredients
used, oud, and promotion costs. To illustrate, Arabian Nights was sold in an elegant, refillable glass perfume
bottle coated with layers of black lacquer and an engraved gold name plate. Then, the perfume was packaged in a
signature jet-black box and embossed with a subtle blue pattern. In fact, the box was so popular that it provided
the inspiration for a line of evening bags. The fragrances and clutches could be purchased through Paris Gallery
specialty stores in Abu Dhabi and Dubai and at Harvey Nichols in Dubai’s Mall of the Emirates.
Globally, perfumes were distributed through hypermarkets, mass volume retailers, drug stores, department
stores, airports, television shopping, the Internet, catalog (door-to-door), and specialty stores such as perfumer-
ies. Changes in buying habits, such as purchasing designer perfumes from perfumeries or upscale department
stores to mass volume retailers or Internet shopping, could adversely affect sales if a firm was not effectively
developing the right channels. To illustrate, Revlon operated in more than 100 countries across six continents,
and Wal-Mart, Inc. accounted for approximately 23% of their global net sales. While Revlon was not a prestige
perfumer, Elizabeth Arden (EA) traditionally marketed their prestige perfumes through upscale department stores
and, more recently, through Wal-Mart, who accounted for a large majority of Elizabeth Arden’s global sales in
prestige perfumes.
Table 1. Global Fragrance Sales
The figures in the Table 1 show historical sales
$Billions % Change
for premium vs. mass fragrances from 2009-2010 in
Category
2010
2009
U.S. dollars.
Premium women’s fragrances
13.58
3.40%
The global fragrance industry was attracting more
companies to enter and position themselves as rare,
exotic, and mysterious scent houses. Retailers contin-
ued to look for ways to differentiate their perfume to
grow sales and profitability. In the last 10 years, growth
in new introductions has been exponential and the
perfume industry was beginning to mimic the fashion
industry—scents, like styles, changed with the seasons.
Although classic, signature perfumes were still popular,
a growing number of consumers were creating a market
for trendy, fresher contemporary perfumes. 3
Premium men’s fragrances
Premium unisex fragrances
Total Premium 6.82
0.83
21.23 3.80%
5.90%
3.60%
Mass women’s fragrances
Mass men’s fragrances
Mass unisex fragrances
Total Mass 10.80
7.34
18.49
18.49 13.50%
12.10%
6.30%
12.80%
Grand Total Premium + Mass 39.71 7.70%
Source: Euromonitor (2011). In BW Confidential. Retrieved
from http://www.nxtbook.fr/newpress/BWConfidential/
Magazine08/index.php?startid=37#/36.
At the same time, product life cycles were becoming shorter, and once-popular brands were requiring more
capital to maintain market share. Even the international fashion houses, such as Burberry clothing and Yves
Saint Laurent, were cashing in on the opportunities by adding perfume to their product portfolio. Other retailers
that entered the market included The Gap, Banana Republic, Calvin Klein, Lacoste, Guess, and Mont Blanc.
2
3
“Kilian Hennessy Introduces New Frangrances for the Middle East,” The National, 2011.
“Time to Spring for a New Scent,” The Daily Post, Liverpool, 2011.
2
TB0337
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
External Environment
A growing market segment in the fragrance industry was travelers and tourists. Of the more than one billion
international travelers, it was estimated that 30-40% browse in retail stores, while up to 15% make a purchase. 4
Airports were becoming the stealth shopping malls of the 21st century. The rapid expansion of airports and new
airline carriers in the GCC led to a growth in duty free and in-flight sales. More than a million travelers go to
Saudi Arabia each year for the Hajj. Intensifying competition from international players such as Giorgio Armani,
Yves Saint Laurent, and Guerlain in the Middle East demonstrated the region’s propensity for luxury goods.
Every year, the UAE hosted the Middle East Exclusive (MEE), which brought together international and regional
representatives from the travel industry. The MEE provided a platform to showcase the world’s leading brands
to international buyers and distributors from airports, airlines, duty-free operations, border shops, hotels, ships,
and seaports. Growth in the UAE’s travel and tourism industry, which included hotels, leisure, retail sectors,
and its airports, was a significant factor in stimulating long-term consumer confidence and economic growth.
Although celebrity perfumes were sometimes criticized for having short lives and mediocre quality or stay-
ing power, nonetheless successful examples and record sales were evident in some. Launched in 1991, Elizabeth
Taylor was the queen of celebrity fragrances with White Diamonds. And notwithstanding a controversial personal
life, Britney Spears, launched by Elizabeth Arden, had sold more than 50 million bottles of perfume worldwide. 5
Consumers of celebrity perfumes were often young and looking for a good perfume at a reasonable price.
In the Middle East, as social media became more popular and logistics improved, the Internet and Facebook
were seen as avenues for marketing new campaigns and messages to build brand loyalty and drive additional
sales. The surge of consumer interest in digital products was predicted to boost online spending. For example,
Carrefour was testing their online shops in the UAE. Digital marketing campaigns were used to launch fresh
and exciting new fragrances. Companies used the Internet to provide product information and education, as
well as professional advice about usage. E-commerce, with an enhanced platform to improve functionality and
geographic reach was one of the fastest growing businesses for Elizabeth Arden.
There were two compelling reasons for using the Internet to market perfumes. First, a company had the
capability to quickly reach an enormous number of consumers through the Internet; and, second, the Internet
was a most effective way to engage the younger generation, a large and growing market especially relevant to the
perfume industry. The challenge in attracting the younger consumer was accessibility: engaging them through
the right channels, with the right messages, making perfumes accessible and available in a range of price/value
offerings.
The social media efforts by many regional perfumers in the UAE was underexploited with little published
research to indicate the criteria, for example, that were important to the main target markets. How did consumers
make a purchase decision? Was it based on brand, price, value, scent, culture, uniqueness and ability to customize?
What was more popular: classic vs. new/innovative, single vs. multiple layering? Did nationals and expatriates
differ in their preferences? Did younger consumers differ in what was important in the decision to purchase?
Table 2 presents selected economic indicators for the countries in the Gulf Cooperation Council (GCC).
It shows the population distribution as well as Internet and Facebook usage. The usage rate for the UAE was
the highest in the region: 70% for the Internet and 60% for Facebook. Saudi Arabia was the Gulf region’s larg-
est market for fragrances, and accounted for $827.5-million (U.S.) in 2011; the UAE was in second place with
$205.8 million; by 2014, sales were expected to grow 14.4% in Saudi Arabia and 16.5 % in the UAE. 6
Many companies in the perfume industry used Facebook to post promotional material by brand. The most
popular posts by selected brands in the health and beauty category showed that fragrance industry players were
using Facebook (see Table 3). Moreover, social network statistics indicated that 67% of Facebook users in the
UAE were in the 18-34 age category and a whopping 92% were younger than 44 (see Table 4).
Estée Lauder Annual Report, 2011.
“The Sweet Smell of Success,” The Herald Sun, 2011.
6
“The Perfumed Opportunity,” The Globe and Mail, 2011.
4
5
TB0337
3
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
Table 2. Economic Indicators for the Gulf Cooperation Council
Country
Saudi Arabia
UAE
Kuwait
Qatar
Oman
Bahrain
Population 1
GDP 1
Oil/GDP 1 Unemployment 1 Internet 1
(millions) (US billion)
Percent
Percent
(million)
26.1
676.7
45%
28.2%
11.40
5.1
260.8
25%
4.3%
3.56
2.6
149.8
50%
2.2%
1.10
.9
181.7
50%
0.4%
.56
3
80.9
9%
15.0%
1.74
1.2
30.8
11%
15.0%
.69
Facebook 2
(million)
5.21
3.06
.92
.48
.46
.33
Sources: (1) Internet World Stats: Usage and Population Statistics, 2012; (2) Social Bakers. (2012a). United Arab
Emirates Facebook. Retrieved from http://www.socialbakers.com/facebook-statistics/united-arab-emirates.
Table 3. Facebook Statistics by Brand
Company
Dior
Louis Vuitton
Chanel
Dolce & Gabbana
Bath & Body Works
Nina, Le Parfum
L’Oréal Paris
Estée Lauder
Avon Türkiye
Revlon
The Body Shop International
Yves Rocher France
Parfümerie Douglas Deutschland
Parfums Givenchy
Yves Saint Laurent Fragrances & Beauty
The Body Shop UAE
Fans
8,456,018
8,277,568
6,870,624
5,597,001
4,346,667
1,114,334
855,355
736,701
580,021
564,193
497,608
490,380
487,895
354,658
348,724
7,285
Source: Social Bakers. (2012b). Top Facebook Pages with the
Most Momentum. Retrieved from http://www.socialbakers.com/
facebook-pages/brands/tag/beauty/page-1.
Table 4. Age Distribution on Facebook in the UAE
Age Range
25-34
18-24
35-44
45-54
16-17
13-15
55-64
65
Percent
46%
21%
18%
5%
4%
3%
2%
1%
Source: Social Bakers. (2012b). Top Facebook Pages with the
Most Momentum. Retrieved from http://www.socialbakers.com/
facebook-pages/brands/tag/beauty/page-1.
4
TB0337
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
Key International Competitors
The financial data for key international players is shown in Table 5.
Table 5. Global Competitors—Selected Financial Information
USD (in millions)
Year End
Income Statement
Revenues
Cost of Revenue
Gross Profit
Operating Expenses
Operating Income or Loss
Non-operating Items
Pre-tax Income
Income Tax
Net Income
Balance Sheet
Accounts Receivable
Inventories
Total Current Assets
Total Assets
Accounts Payable
Total Current Liabilities
Total Liabilities
Equity
Total Liabilities & Equity
Christian
Dior
31-Dec-11
Elizabeth
Estée
Coty
Arden
Lauder
L’Oreal
30-Jun-12 29-Jun-12 29-Jun-12 31-Dec-11
Revlon
30-Dec-11
32,903
11,181
21,722
14,657
7,065
505
6,560
1,953
1,709 4,611
1,824
2,787
2,997
(210)
122
(331)
(38)
(293) 1,238
629
609
514
95
22
74
16
57 9,714
1,996
7,718
6,406
1,312
51
1,261
401
857 27,113
7,799
19,314
14,926
4,388
(232)
4,620
1,367
3,250 1,381
493
889
686
203
114
90
37
53
2,608
10,262
18,275
68,413
4,024
13,702
35,090
33,323
68,413 581
648
2,139
6,183
695
1,913
5,046
857
6,183 229
292
624
1,067
78
279
585
482
1,067 1,060
984
3,855
6,593
1,907
2,126
3,846
2,733
6,579 3,994
2,735
10,293
35,798
4,329
9,503
12,289
23,509
35,798 262
111
519
1,157
322
335
1,850
(693)
1,157
Elizabeth Arden (EA)
Consider EA’s strategy for 2011-12. Despite adverse economic conditions, EA reported record increases in sales
and earnings from key brands such as Juicy Couture, Elizabeth Arden, Elizabeth Taylor and Britney Spears.
Their President and CEO, E. Scott Beattie, attributed their success to reengineering the supply chain with the
implementation of a global Oracle software system that would enable EA to expand globally and take advantage
of growth in international markets. 7 By reengineering the supply chain, EA was poised not only to take advantage
of improvements in supply chain efficiency, and thus, profits, but also to use their supply chain to deliver their
product on a large scale quickly. By reducing time to market and improving supply chain effectiveness, EA could
create a distinctive competency that would be difficult for competitors to replicate.
EA’s marketing strategy included modernizing the brand to make it appeal to consumers globally as well
as using streamlined and more contemporary packaging. The changes in packaging were designed to expedite
the flow of the product more efficiently through the supply chain. EA continued to focus on mass and prestige
retail customers in North America, while delivering expanded portfolios to the international markets through
licensing and key retailers. As part of the update of merchandising point of sale initiatives, EA continued to offer
fragrance tester bars at mass retailers to provide consumers the opportunity to test and smell a fragrance. The
research results showed that those perfumes that were available to be tested also had significant increases in sales.
Central to EA’s strategy was tapping into digital communications and updated retail store designs. Using a
phased approach and based on the perfume revenue and growth by region, EA planned to first strengthen sales
in Europe and Latin America—the two largest markets. North America was third in size followed by the Middle
East/Africa and Asia Pacific. EA mapped their brand portfolio across these geographic regions and distribution
channels.
7
Elizabeth Arden Annual Report, 2011.
TB0337
5
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
To illustrate the potential of digital marketing in reaching a more contemporary audience, we examined EA’s
strategy of signing an exclusive global license agreement with Taylor Swift, an internationally acclaimed music
star. She has won four Grammy awards, is the youngest artist to win the Country Music Association Entertainer
of the Year Award and with 33 million downloads is the most downloaded artist in the history of the music in-
dustry. Taylor built her music empire via social media outlets which included Facebook, Twitter, and YouTube.
By signing a contract with Taylor, EA gained access to an estimated 25 million Facebook fans. Moreover, digital
marketing campaigns coordinated with an entertainer’s tour dates could create additional demand.
The launch of Justin Bieber’s new scent, Someday, demonstrated the synergy between digital marketing and
retailers. Bieber claimed to have more than 1 billion YouTube views, 27 million Facebook fans, and 9.8 million
Twitter followers. 8 In June 2011, Bieber sent messages on the Internet about his new fragrance and the launch
of Someday at Macy’s. Perfume sales rose to more than $3 million in the first three weeks; proceeds from his
perfume sales went to benefit charity organizations.
Coty
Founded in Paris in 1904 and credited with the birth of modern and available perfume for the masses, Coty
brands included Rimmel, Intimately Beckham (David and Victoria), Calvin Klein, Cerruti, Vera Wang, and
Davidoff. Coty operated in more than 130 countries and employed almost 12,000 employees worldwide. Europe
accounted for half of Coty’s sales, where they invested in major ad campaigns. Coty had a regional office in Dubai,
Jebel Ali Free Zone. According to the Coty Middle East General Manager Hani Jabbour, “The advantage for
Coty in the Middle East is that our group, with its wide range of products portfolio, simply caters to each and
every need of any given consumer with Coty Beauty for mass and masstige products as well as the very selective
portfolio with Lancaster Group.” 9
Estée Lauder (EL)
Estée Lauder’s portfolio of brands included Estée Lauder, Aramis, Tommy Hilfiger, Donna Karan, DKNY, Michael
Kors, and Coach. EL operated in more than 150 countries, and was distributed through department stores and
multi-brand beauty retailers. In 2011, net sales of fragrance products grew 9%. Moreover, fragrance operating
income grew from $54.5 million to $80.7 million, driven by product launches of EL designer fragrances and
improved cost control. EL aimed to grow sales in emerging markets where consumers live and shop. Their strategy
reflected a focus on evolving their digital capabilities, such as mobile applications and social media platforms,
to take advantage of the change in how consumers buy products. One of their fastest-growing segments was
the travel retail channel. Despite declining consumer confidence and spending in the U.S. and Europe, they
experienced significant growth from China, Russia, Latin America, the Middle East, Eastern Europe, and South
Africa. Sales in the Middle East rose more than 30% in 2011.
Christian Dior
Christian Dior, headquartered in France, employed 101,154 employees and distributed their product around the
world in Europe, the U.S., and Asia. They were organized into the following groups: Christian Dior Couture,
Wines and Spirits, Fashion, Perfumes and Cosmetics, Jewelry, and selective retailing. The Perfumes and Cosmet-
ics group accounted for almost 13% of total revenues and grew 9% in 2011. The growth was driven primarily
by Christian Dior, Guerlain, and Givenchy. Major media campaigns included heavy advertising expenditures in
haute couture. Counterfeits posed a problem for Christian Dior, and perfumes were easily copied and distrib-
uted in Web-based sales networks. This affected revenues and profits and could damage the brand image of the
perfumes. The company worked closely with governments and trade bodies to combat the problem.
L’Oréal
L’Oréal had produced cosmetics for more than 100 years and had 27 international brands. The company oper-
ated in more than 130 countries and employed 68,900 people worldwide. Based on the premise that beauty is a
8
9
Phillips, O. “Category Overview,” BW Confidential, 8, 2011.
Lloyd-Jones, T. “Coty Extends the Celebrity Treatment,” Business Intelligence Middle East, 2005.
6
TB0337
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
science, and reflecting a strong commitment to research and development, they filed 613 patents in 2011. L’Oréal
was organized into four sections, which reflected an adaptation to distribution channels throughout the world:
the Professional Products Division, which distributed through hair salons; the Consumer Products Division
that sold through mass market retail channels; the Luxury Division that catered to select retail outlets such as
department stores, perfumeries, travel retail, boutiques, and online sites; and the Active Cosmetics Division that
distributed through health channels such as pharmacies. They aimed to offer their products to as many people
worldwide as possible by taking advantage of those sectors that were accelerating. More than half their sales and
profits were concentrated in the Consumer Products group. L’Oréal’s growth target for the next 10 years was to
have as many customers in Asia/Pacific as in the United States and Europe. 10
Other Trends
Other trends in the global fragrance industry included economic conditions. In the U.S. and Europe, high
unemployment levels, lower consumer spending, reduced credit availability, and lowered consumer confidence
had adversely affected sales of perfumes. Disruptions in the financial markets, fluctuations in foreign currency
exchange rates, and stoppages in travel and political conditions also had a material effect on demand. Multina-
tional fragrance firms could be adversely affected by changes in laws and regulations in foreign markets, inflation,
and currency devaluation.
During the 2008 global downturn, the personal care industry in the GCC had one of the highest growth
rates in the world. 11 The UAE was consistently rated as one of the most popular markets for expansion among
international retailers, placing 7th in A. T. Kearney’s 2012 Global Retail Development Index (Oman, Kuwait,
Saudi Arabia, and Jordan also ranked in the top 20). While other parts of the Middle East made headlines with
the Arab Spring movement, the perception of the UAE as a safe and hospitable nation for tourists and investors
led to substantial increases in tourist visits and average retail sales at the country’s major malls. While nationals
had a strong tradition in perfumes, expatriates represented about 90% of the residents, and it was this latter
group that accounted for most retail sales. In addition, 25% of the UAE’s gross domestic product (GDP) was
from oil, while the rest, approximately US$8 billion, was generated from tourism.
Fragrance manufacturers were subject to country and international regulations designed to protect con-
sumers and the environment. Regulatory changes could require a firm to reformulate certain perfumes which
could result in increased costs, delays in product launches and lower sales. For example, many luxury perfume
brands feared that the European Union might introduce laws that would result in a ban on certain ingredients in
order to protect consumers against allergic reactions, a health hazard. 12 New regulations could require significant
changes in the formulas used in vintage bestsellers which were more likely to use natural ingredients. In the UAE,
perfumers had to meet the standards set by the Emirates Authority for Standardization and Metrology (EASM).
In March 2012, the EASM invited the Fragrance Foundation Arabia and key industry players to draft technical
regulations based on international standards for the UAE market. After approval of the regulations, companies
would be given six months to become compliant with these standards. The standards focused on product safety
and the elimination of risk to the consumer or the environment.
Moreover, when implementing innovative strategies, there were risks to consider. New product launches
might be less effective than anticipated, and a corresponding decrease in sales consumption could result. Fur-
thermore, costs could increase if initial sales fell short of expectations as companies continued to incur additional
advertising, promotional, and marketing expenses related to new product launches.
In summary, the perfume industry was fiercely competitive and fickle with the rate of new introductions
increasing every year. In 2012, the Middle East perfume market was worth an estimated $3.5 billion.” 13 Not
only were there global national brands active in the market but the UAE was a popular site to unveil new prod-
ucts. Numerous companies launched new fragrances in Dubai—the place where Middle Eastern culture meets
western glamour. For example, Kilian Hennessy, the grandson of the cognac producer who founded the Moët
L’Oréal Annual Report, 2012.
“Middle East—Hey, Big Spenders,” Cosmetics Business, 2010.
12
“EU’s Proposed Anti-Allergen Law Could Put Perfume Makers Out of Business,” The Globe and Mail, 2012.
13
“Perfume Firm Smells Opportunities in Dubai,” Arabianbusiness.com, 2012.
10
11
TB0337
7
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
Hennessy Louis Vuitton group, showcased a number of luxury fragrances in 2011 in Dubai. According to Hen-
nessy, the perfumes were designed to last. “These days, mass-produced perfumes have no staying power—you
spray them on and within a few hours, the smell is lost,” he said. “Because of the essential oils we use, and the
way that they are blended, my fragrances have far greater longevity; you should still be able to detect them the
next day, even after showering.” 14
Regional Competition
Who was the leading perfumery in the UAE? There were several regional companies that claimed that title. Lo-
cated in Dubai’s warehouse district, Ajmal Perfumes operated a $200 million, 150,000-square-foot factory that
made around 50,000 bottles of Arab and French fragrances each day. The family-owned business had its roots
in India, from the time when the first Arab traders visited the country. The wide variety of natural fragrances
available in the country captured the attention of the early traders. Since then, India has become a much-sought-
after source for oriental fragrances.
Table 6. Ajmal Perfumeries
In addition to more than 100 varieties of perfume, Ajmal manufactured
Country
Outlets
air fresheners, body sprays, lotions, soaps, and essential oils. Ajmal distributed
UAE
35
its 70 brands locally and internationally, through retail outlets of perfumes and
India
22
personal care products as shown in Table 6.
Kuwait
22
Saudi Arabia
21
Ajmal catered to the affluent Middle Eastern clientele. Abdulla Ajmal,
Oman
17
Deputy General Manager, Ajmal Perfumes, stated that, “Throughout our 60-
Bahrain
10
year journey, we have continuously strived to strike the delicate balance between
Qatar
10
our ethnic ethos, modernity, and innovation. As a progressive brand, we have
Malaysia
4
carved a niche positioning as an ethnic chic brand that is versatile enough to
evolve with the times whilst remaining relevant and identifiable to our consumers.” Ajmal’s understanding of the
history of perfumery in the Arab world, as well as their ability to create unique and captivating ouds, oils, and
perfumes, enabled the company to stay on top of key trends. While Ajmal’s purchases came primarily from the
older generation in this group, the majority of nationals were in the younger age bracket—65% of the consumers
were younger than 25 years old. The company`s business strategy included taking advantage of this demographic
to reposition, repackage, and reformulate one or more perfumes or product lines, launch additional new products,
and further refine their approach to retail merchandising to create profitable growth. In 2010, Ajmal opened
its first boutique outside the GCC, in Malaysia, as part of an international expansion strategy. Since then, the
company has opened four retail perfumeries in Malaysia.
Founded in 1982, Arabian Oud claimed to be the largest fragrance retailer in the world, with 620 stores
in 50 cities across 30 countries. Initially operating in the Middle East, they launched the first UK flagship store
in 2000, and opened in Paris in 2004. The company had more than 400 individual fragrances, and their strat-
egy was to develop markets with new, grand branches in large cities all over the region. For example, in 2012,
they opened the largest branch in the northern region of the Kingdom of Saudi Arabia. Moreover, they offered
franchises for their line of traditional and unique products.
Zahras Perfumes, owned by Abdul Samad Al Quarashi, had 23 perfumeries in the UAE and 182 globally.
The company developed a wide range of unique aromas that captured the essence of Arabia—most of which
were based on oud, musk, and amber. Their clientele included royalty and dignitaries in Saudi Arabia, and they
have received numerous awards, such as the European Union Award, 2011, for quality control and production.
In 2011, Sheikh Mohammed Abdul Samad Al Qurashi, the CEO, said in an interview with The National UAE
Newspaper that sales had increased 20%, and the firm planned to open 20 stores each year for the next five years.
Established in 1974, Swiss Arabian Perfumes advertised that they were the “country’s oldest and most
trusted name in the traditional Ood and Perfumes category that is known for its alignment and association with
social and cultural events. The company offers a wide range of premium and authentic Ood, Dehn el Ood,
Arabic, and a tastefully selected range of French fragrances.” Similar to other regional competitors, and with a
broad-based appeal, they claimed to combine traditional authenticity with innovative research and development.
14
“Kilian Hennessy Introduces New Frangrances for the Middle East,” The National, 2011.
8
TB0337
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
The Royal Diwan Group catered to the elite customer niche in the Middle East and had store outlets and
showrooms primarily across the UAE with branches in Oman, Yemen, and Qatar. Headquartered in Sharjah,
Sheikh Ahmed Bin Dalmouk, the president of Royal Diwan, and Chairman Saber Al Battash managed the
company. With a research and development manufacturing facility located in Dubai, the company offered cus-
tomized fragrances, most of which were oud-based, for clientele including the royal families in the UAE. Using
state-of-the-art production technology to blend, process, and bottle their fragrances, they had the manufacturing
capability to launch a large-scale global initiative.
One of the most prestigious and up-and-coming perfumeries is Hind Al Oud, whose luxury perfumes are
marketed across the GCC. Based in the United Arab Emirates, the company boasts modern, elegant showrooms
with brands that reflect the distinct qualities of the region.
Perfume Rankings
Which perfume ranks number one? Is it a discount perfume or a designer one? The answer is, “It depends.”
Published lists of top-rated perfumes are based on popularity and sales, while international competitions are held
to herald the best fragrance selected by nose experts. As well, so-called independent consumer laboratories carry
out comparisons between top-selling global brands and less-expensive but lesser-known perfumes.
Table 7 shows the top-ranked perfumes in Paris Fragrance, Amazon, and Harper’s Bazaar in 2012. The
popular perfume brands or companies that appeared on more than one list included Chanel No. 5, Sarah Jessica
Parker, and Christian Dior. However, before concluding that these were the best scents, consider that top regional
players, who distribute primarily through their own retail outlets, did not participate.
Table 7. Top-Rated Perfumes
Paris Fragrance
1. You Are Beautiful by Gemina.B
2. Juicy Couture
3. Silver Spirit by Johan B
4. Metal Jeans Vial
5. Royal Secret
6. Silver Spirit by Johan B
7. Love Intention Purple by Vendome
8. Apple Heard by Estelle Vendome
9. Eva by Eva Longoria Tester
10. Loves Soft Jasmin
Amazon
1. Guess New by Guess
2. Light Blue by Dolce & Gabbana
3. Ck One by Calvin Klein
4. Ed Hardy by Christian Audigier
5. Sex In The City Love
6. Lovely by Sarah Jessica Parker
7. Brit by Burberry
8. Carolina Herrera CH
9. Paris Hilton
10. Jessica Mcclintock
Harper’s Bazaar
1. Chanel No. 5 Eau Première
2. Palazzo by Fendi
3. Gucci by Gucci
4. Covet by Sarah Jessica Parker
5. Infusion d’Iris by Prada
6. Bill Blass
7. Banana Republic Malachite
8. Missoni Acqua
9. Dior J’adore L’Absolu
10. Marc Jacobs Daisy
The FiFi Awards are an event sponsored by the Fragrance Foundation to honor the industry’s most creative
achievements each year. Originating in New York City in 1973, it is a red-carpet, black-tie affair which draws major
media attention to find out who has won the award for a new fragrance. The 2012 FiFi Award recipients were:
Top Women’s Luxe
(department and specialty stores)
Beyoncé Pulse by Coty Inc.
Bottega Veneta by Coty Prestige
Candy Eau de Parfum Spray by Prada
Someday by Justin Bieber
Violet Blonde by Tom Ford
Top Women’s Specialty Brand
(sold through one retailer)
Anthropologie 1922 Lily Sanguine Eau de Parfum
Bath & Body Works Signature Collection Paris Amour
Bebe Gold Eau de Parfum by Bebe
Crabtree & Evelyn Lily
Angel by Victoria’s Secret
Top Women’s Broad Appeal
(mass merchandisers)
Royal Desire by Christina Aguilera
Curve Appeal by Liz Claiborne
Heidi Klum Shine by Coty Inc.
Moment de Bonheur by Yves Rocher
Fergie Outspoken Intense by Avon
Top Women’s Nouveau Niche
(owned by a large company)
Dahlia Noir by Givenchy
The Velvet Collection by Dolce & Gabbana
Jersey by Chanel
Live in Love by Oscar de la Renta
Maison Martin Margiela by L’Oréal
Jasmin Rouge by Tom Ford
TB0337
9
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
In addition, various awards are given in areas such as best packaging, media campaign, and technological
breakthrough of the previous year. Technological innovations include fragrance creation, packaging technology/
delivery systems, and information technology. The Perfume Extraordinaire of the Year award recognizes the aes-
thetic beauty of the winning fragrance based on its design, signature, creativity, and quality. Submissions must
be original and have the potential to move the industry ahead as a whole.
The Fragrance Foundation Arabia was founded in 2008. In 2010, the UAE hosted the Middle East’s first
FiFi Dubai Awards, bringing together the top international fragrances, key industry players, and marketing es-
tablishments. The event made a clear statement about the important role the region intends to play in shaping
future worldwide developments in the fragrance industry. Ajmal won several prestigious awards for fragrances and
excellent retailing. Their phased makeover of new open-store layouts with spacious, stylish, and contemporary
surroundings focused on creating a unique and interactive sensory experience.
While industry experts recommend that you buy what smells good to you, many purchases are made on
the basis of brand. Creating a connection between consumers and the brand requires a substantial investment
in advertising. If the advertisement creates an appealing image to the consumer that she wants to identify with,
she will buy the fragrance in spite of the fact that, in blind tests, she dislikes the perfume. Brand differentiation
through corporate marketing accounts for 35% of large global firms’ revenues.
According to Pearson, the perfume itself accounts for only 3% of the total cost of production. 15 The rest
goes to marketing, packaging, and distribution. No doubt the glittering marketing campaigns, highly publicized
launch galas, and extensive advertising are costly. On the other hand, perfumers claim it is the quality (and costs)
of the ingredients that counts—that Chanel No. 5 lasts 24 hours, while the cheaper celebrity perfumes evaporate
after a few hours. Nonetheless, Sarah Jessica Parker made more than £2 million from the sale of her perfumes
and Jennifer Lopez made more than £25 million. Perfumers argue that scent is closely linked to emotions and
provokes powerful responses from others. Their marketing is aimed at convincing consumers that if they find
the right scent, they will be like Jennifer Lopez—alluring and irresistible.
How do you qualify as a perfumer? It’s not as easy as it sounds, requiring a test and an apprenticeship of
six years. See Appendix 1 for a full description of the requirements to be a perfumer, according to The Fragrance
Foundation Arabia.
Consumer panels publish interesting results from perfume comparisons. The Tribune in the UK reported
that Chanel No. 5 was delivered a “knock-out punch” from a perfume distributed by a discount supermarket. 16
Is it possible that once the ingredients, marketing, and packaging are accounted for, a synthetic scent provides
similar quality at a fraction of the cost?
15
16
Pearson, A. “Perfumes on Trial: The Truth About Our Scent Industry, “Mail Online, 2008.
Oyeleke, V. “Lidl Beats Chanel in the Battle of the Perfumes,” The Tribune, 2011.
10
TB0337
This document is authorized for use only by Norizan Kassim in 2017.For the exclusive use of N. Kassim, 2017.
Appendix 1
Perfumers, creators of fragrance who are known as “Noses,” are held in the highest esteem in the perfume industry, and
theirs is the final say as to whether or not a fragrance is acceptable. The primary requisite for becoming a Nose is a keen
olfactory sense. It is not enough for the perfumer to be able to distinguish blindfolded between the fragrance of a rose
and a tulip, but his sense of smell must be so acute that he can detect in a mixture of 100 or more ingredients the precise
amount of the various substances that have contributed to the formula. He must not only be able to recognize various
raw materials, but must have the capacity and artistry to blend them harmoniously. He must be able to tell, for instance,
whether a certain lot of labdanum is from Greece or Corsica; whether the oil of ylang-ylang comes from Madagascar or
Manila; tell the difference between oils of the same species of plant cultivated in different countries, and which type will
achieve a particular result. Lavender oil, for example, can have a top note that is floral, balsamic, sharp, sweet, green, or
nut-like. The Nose has his counterpart in the wine industry where the skilled expert can tell in an instant the region,
type of grape, and vintage of the wine he is sampling.
A truly great perfume is not created in a hurry. Mass-produced fragrances may be blended from a standard formula
in a short time, but the original creation of a beautiful perfume may take years to accomplish. If the artist has a picture
in mind that he wishes to translate into scent, he will spend many weeks and months over it. Surrounded by a myriad of
bottles, vials, jars—each filled with precious essential oils and other materials—he goes to work. During the blending, he
is constantly testing his formula. As he works, he dips long slender blotters, called mouillettes (pronounced moo-yetts),
into the solution and puts them aside to dry. At intervals, these strips are sniffed to determine what should be added to
perfect the composition and to round out the fragrance.
During the building of the perfume, it is tested frequently and under varying conditions. Is it the same in the early
morning as it is in the dusk of the evening? Is the scent altered by weather conditions? These and many other checks are
made before the perfume is considered a finished product.
The perfume apprentice learns to compose fragrances at an “organ,” a small laboratory that contains the majority
of aromachemicals and natural oils used in the day-to-day work of a creative perfumer.
Perfumers use sophisticated instrumental methods to analyze the components of perfumery materials in fragrances.
A Gas Chromatographer (G.C.) breaks down a fragrance into its individual components, which allows the perfumer to
identify individual ingredients. Occasionally, there are materials in a fragrance which are especially difficult to identify.
When this occurs, the G.C. is linked to a Mass Spectrometer (M.S.), which helps the perfumer further identify even the
most minute quantity of perfumery material.
The perfumer’s palette must be kept in scrupulous order, for even the most minute quantity of the highly concen-
trated raw material can ruin a formula if a trace of it should be present through carelessness.
Source: “How Perfumers Are Chosen,” Scent of Nature, 2012.
TB0337
11
This document is authorized for use only by Norizan Kassim in 2017.

You Need a Professional Writer To Work On Your Paper?