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The New Fragrance Mecca: Africa/Middle East
By: Briony Davies, Euromonitor International
Posted: October 3, 2008, from the April 2006 issue of GCI Magazine.
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In Morocco, fragrances is the sector most affected by imitation and contraband, and is hugely lucrative for smugglers—the combined black market and duty-free revenue represent more than 40% of the fragrance market. This prompted one of the largest importers of fragrances to withdraw from the local market (Cinquième Sens, importer and distributor of Yves Saint Laurent, Guerlain and Boucheron) as they witnessed a year-on-year decrease in sales.
Unisex fragrances are unpopular in the majority of countries in the region, where sharing fragrances with your partner is seen as unacceptable and contrary to traditional gender divides. In contrast, mass unisex fragrances in Egypt led the entire fragrance market in terms of size and dynamism with 35% of overall fragrance sales.
A number of factors are driving this trend. Firstly, mass unisex perfumes retail at low prices, and are affordable to the bulk of the population, that suffers major economic constraints. Secondly, they can be used by several members of the family, further reinforcing their value. It also is notable that unisex fragrances appeal to veiled or conservative women who view scent as a forbidden means of attracting men. Unisex fragrances suit them perfectly because they tend to be light. These fragrances are less tempting and, therefore, more suitable for daily wear. Lastly, mass unisex perfumes are sold everywhere in Egypt, not just beauty specialists. They can be found in pharmacies and in some supermarkets and grocery outlets.
Smell the Money
AME presents great opportunity for fragrance manufacturers with value sales set to increase by $770 million in the next five years. Premium fragrances will witness the greatest growth, and are forecast to contribute a total value sales gain of almost 60%. Although AME currently is one of the smaller markets for fragrances, fragrance sales are expected to overtake those in Asia-Pacific for the year 2006.
South Africa and the other non-core markets of AME will drive overall value growth. The UAE will see the highest total value growth with forecast value sales exceeding $89 million by 2009, with its advanced economic climate a significant draw to multinational fragrance manufacturers. Leading global fragrance manufacturers such as Natura Cosméticos, Limited Brands and Botica Comercial Farmacêuticas are most likely candidates for expansion into the region—they currently hold negligible market presence in AME—however, they will need to consider each country market individually, as their ability to gain share depends heavily on their grasp of local traditions and cultures.