Demand for premium Arabic perfumes falls

Demand for expensive Arabian perfumes such as oud, bukhur, rose and amber has fallen substantially across the region because of the economic slowdown, say industry sources.

However, UAE-based manufacturers and wholesalers said while consumers are buying less of the premium products they are not switching to cheaper alternatives. The price of top quality oud in UAE is Dh150 per gramme – much higher than the price of gold.

"Our retail clients in the UAE and other GCC countries have reported a considerable decline in sales of expensive Arabian perfumes," Imran Fazlani, Managing Director of Afnan Perfumes, told Emirates Business.

"Up until 2008 Afnan reported a sustained annual growth rate of 18 per cent to 20 per cent per year. But more recently sales of Arabian perfumes have fallen drastically in major shopping malls in the UAE, Saudi Arabia and other GCC countries. Arab consumers are not buying the same amount as they used to."

Afnan manufactures oriental and occidental perfumes in the UAE in compliance with the Saudi Arabian Standards Organisation's standards using ingredients from France.

Imran said other companies dealing with costly perfume brands would be feeling the impact of the downturn as even the richest consumers have stopped spending lavishly. Some limited edition international brands such as Clive Christian No 1 Imperial Majesty cost $200,000 (Dh734,450) per ounce.

"It has been an integral part of Arabic and Islamic culture to give two or three packets of the most expensive perfumes as gifts," added Fazlani. "During Eid, Ramadan and other special occasions giving expensive oud and amber perfumes is one of the local customs. Now people have stopped giving expensive perfumes."

The Middle East has one of the highest per capita rates of spending on perfume, according to experts. A bottle of oud, a natural scent popular in the Arab World, can cost between Dh1,000 and Dh 40,000.

"The most expensive oud costs around Dh150 per gramme, more than the price of gold. The rice of a gram of gold in the UAE is Dh100 to Dh120.

Shafaat Rasool Hasmi, Marketing Manager of Fakruddin Holdings, owner of Sterling Perfumes Industries, said the company was witnessing sales growth in the second quarter of 2009 after a slow first quarter.

"Within the GCC region demand for oud and oriental perfumes is holding up," he added. "The Dubai and Saudi markets are stable and with more tourists coming to the region, demand for perfumes will pick up. We are expanding our production capacity substantially and plan to increase exports to the US and European markets. Sales at our seven outlets in the UAE have started to pick up after a temporary recession."

Benjamin Peter of Swiss Arabian Perfumes said demand for scent had been hit slightly by the downturn and the company's exports to the US has been visibly affected. "Demand for Arabian perfumes is reasonably good in the region," he added.

"One of the most expensive Arabian perfumes from our company costs Dh500 for a 3ml bottle. Arabs are fond of oud and the best oud comes from India and Cambodia."

Elisabeth Brehl, Managing Director of Epoc Messe Frankfurt, said recent research indicated that the worldwide perfume industry was projected to expand modestly to reach $33.6bn in 2012, dominated by the Western market.

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.