Why is UAE a Perfume Powerhouse?

Fragrance has long been a cherished element of human culture, with its origins tracing back to the ancient civilisations of Egypt, Greece, Mesopotamia, Persia, and Rome. Yet, it is the Arab world that perfected the art of perfume-making, thanks to pioneering advancements in distillation techniques. This rich heritage has blossomed into a thriving industry, with the Middle East and North Africa (Mena) region standing as a testament to the timeless allure of scent.

Recent insights from McKinsey & Co forecast a robust growth trajectory for the fragrance market in Mena, anticipating a compound annual growth rate (CAGR) of 11 per cent from 2023 to 2027. This momentum aligns with the global fragrance market's projected valuation of $100 billion by 2027, underscoring the significant role of the Middle East in shaping the industry’s future.

According to Omeir Kalsekar, founder of Azha Perfumes and a third generation of perfumers, ease of doing business and geographical location contribute to the UAE being a manufacturing and export hub of perfumes.

"At a consumer level, global acceptance and understanding of ‘strong’ and ‘oriental’ fragrances has increased the impact of the UAE and GCC as trendsetters and has grown. Another factor contributing to the UAE/GCC becoming and staying a trendsetter is the greater importance we put on fragrance in the region as consumers due to its cultural significance."

Also, he said the UAE is a true crossroads of cultures, where East meets West, and this blend is beautifully reflected in the local love for fragrances. "Perfumes hold a special place in the hearts of the people here, deeply woven into daily life and traditions. Walking through a mall or souk, you can sense that perfume shopping isn’t just about picking up a bottle; it’s an experience, a ritual,” he adds.

Arabian or Oriental notes have captivated the global perfume industry, with renowned fragrance houses incorporating rich ingredients such as oud, musk, amber, jasmine, rose, saffron, and frankincense into their blends. This fascination with exotic, luxurious scents has historical roots; Arab traders have been sourcing premium oud and oils from India for over a century, establishing a market that thrives on the allure of these exquisite elements.

Abdullah and Mahwish, co-founders of Colish Perfumes, shed light on how cultural preferences shape the UAE’s fragrance market. "In the UAE, fragrance is deeply personal and a cultural expression. This resonates with us at Colish, where our journey began with a desire to capture the comforting scents of our childhood and the rich traditions of our homeland. The demand for strong, oud-based perfumes in the UAE is a reflection of this cultural preference. However, the market is also diverse, and this diversity drives brands like ours to innovate and offer a wide range of fragrances. At Colish, we see this as an opportunity to blend tradition with innovation, creating scents that honour cultural preferences while introducing new olfactory experiences."

The turning point for Western interest in oud came in 2007 when Tom Ford launched Oud Wood as part of his exclusive Private Blend collection. This move ignited a surge of interest among other designers, who began infusing their fragrances with elements of premium oud and harmonizing notes. However, even before this, Western brands had been incorporating smaller quantities of oud to enhance their perfume offerings.

In the UAE, the fragrance market is poised for significant growth. Projected to generate revenues of approximately $142.60 million in 2024, the UAE market reflects a burgeoning appetite for high-quality scents. Although the market is expected to experience a slight annual decline of -0.91 per cent from 2024 to 2028, the overall trajectory remains positive, driven by an evolving consumer base and increasing demand for luxury and niche fragrances.

The perfume industry in the UAE is a dynamic and burgeoning market that continues to captivate both locals and tourists. Kalsekar notes: "We are currently looking at a market size of around $550-600 million with a projected CAGR of 10 per cent for the next decade.” His insight reflects the broader landscape, where the market is currently valued at approximately $ 1.5 billion and is expected to grow by 7-8 per cent annually over the next few years due to the high standard of living, diverse consumer tastes, and a steady influx of tourists.

The UAE fragrance market is characterised by a preference for premium products, with the Arabic segment expected to capture a substantial market share. This trend is evident in the growing popularity of niche and luxury brands among the affluent consumer base. The UAE’s market dynamics are also influenced by a rise in disposable income, shifting lifestyles, and significant investments by manufacturers in marketing and product innovation.

Kalsekar highlights some pivotal trends in the UAE’s perfume market: “We’re seeing exciting shifts where consumers are increasingly drawn to niche and personalized fragrances that reflect their individuality. There’s also a rising interest in sustainability, with a growing demand for ethically sourced ingredients. Digital platforms are becoming essential throughout the purchasing journey, from discovery to delivery. Brands need to adapt by focusing on personalized experiences, embracing digital marketing, and emphasising their commitment to sustainability. Authentic storytelling that resonates with regional cultural values will also be crucial.”

Kalsekar further adds: “Key factors include influencer and social media-driven purchases, increased consumer knowledge, and selectiveness—consumers are willing to invest in unique or high-quality fragrances but are more price-sensitive with commercial options. Brands should be cautious about overextending themselves in response to rising demand, as overflooding the market could lead to challenges, such as the influx of fake or low-quality products. This has previously led to negative perceptions and unsustainable consumer expectations, as seen between 2016 and 2019.”

The UAE fragrance market, estimated at $643.35 million in 2023, is forecasted to nearly double, reaching $1.46 billion by 2032. This growth is supported by increasing disposable income, a shift towards premium products, and a strong demand for Arabic perfumes. Among the regions, Dubai is anticipated to lead the market, reflecting its status as a global hub for luxury and innovation.

Power duo siblings Abdullah and Mahwish, discuss the challenges and opportunities for new perfume brands entering the UAE market. They share: “Entering the UAE market as a new perfume brand is both challenging and rewarding. For Colish, transitioning from a home-operated brand to a recognised name in this competitive space was a significant leap. While standing out in a crowded market and understanding diverse consumer preferences poses challenges, the opportunities are immense. UAE consumers value quality and are open to unique offerings. Our journey underscores that with passion and authenticity, new brands can carve out a strong presence in this dynamic market.”

The Middle East’s profound connection to fragrance, combined with the UAE’s burgeoning market, presents a dynamic landscape for the perfume industry. As global interest in Arabian and Oriental notes continues to rise, the region remains at the forefront of scent innovation and luxury, shaping the future of fragrance for generations to come.

Abdullah and Mahwish, conclude with a comprehensive view of the UAE's perfume market: “The UAE’s rich cultural heritage combined with its status as a global luxury hub makes it a premier destination for perfume shopping. This unique blend of tradition and modernity creates a dynamic environment where both classic and innovative fragrances can flourish. For brands like Colish, this means that the UAE not only influences the growth of the perfume industry but also offers a nurturing platform to share and celebrate our unique fragrances and stories, bridging the gap between tradition and contemporary luxury.”