The fragrance market in the U.A.E. is expanding rapidly owing to the rising disposable income. 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. From USD 720.2 million in 2020, the U.A.E. fragrance market is set to witness an 8.3% growth rate (Compound Annual Growth Rate – CAGR) between 2020 and 2030, according to market research firm P&S Intelligence [1].

In Saudi Arabia, the fragrance market is expected to grow at a CAGR of 8.2% to reach USD 3,810.5 million in 2030, from a USD 1,738.5 million base in 2020 [2].

In both countries, the fragrance market was negatively affected by the COVID-19 pandemic, with a sharp reduction in sales in 2020.

In the very next years, unisex fragrances are expected to play a key role in both markets. Younger generations, in particular, seem less interested in the traditional segmentation between women’s and men’s fragrances. Fragrance companies are recognizing this by designing perfumes that aren’t gender specific.

While natural fragrances are expected to experience the higher CAGR, of 8.5%, in Saudi Arabia, consumers in the U.A.E. seem to prefer long lasting synthetic fragrances.

The demand for luxury fragrances is also expected to grow in both markets. The growing brand consciousness and increasing expenditure on luxury goods by millennials are the main growth drivers for the prestige and luxury segments.

Both markets are benefiting from a favourable development in average disposable income. According to P&S Intelligence, currently, almost 60% of the population of the U.A.E. falls in the age group of 14–40 and this population has a significantly higher purchasing power than that in other age groups.

According to the Census and Economic Information Center (CEIC) data, in Saudi Arabia, the gross national disposable income reached USD 658,493.5 in 2017 from USD 617,848.7 in 2016. Moreover, as per the data provided by the Saudi Arabian Monetary Agency, consumer spending in the country increased to USD 83,916.1 million in the first quarter of 2021 from $80,067.9 million in the fourth quarter of 2020.

Increased participation of people in social events and the need to make a good impression on one’s peers also contribute to the rise of fragrance usage.