OMAN: Amouage makes global waves

By Rhona Wells

22 AUGUST 2021: Amouage, the Omani luxury fragrance house, plans to double sales by 2025 as the company expands into the US and China.
According to Marco Parsiegla, Amouage CEO, “We started turning the corner in the second half of 2020 and will close the 2021 fiscal year well ahead of 2019. The impact of Covid-19 will be behind us with our revenue continuing to grow towards the end of year.”

Sales of the company’s luxury ultra-niche perfumes increased 107% in the first six months of 2021 compared to the preceding year and by 20% compared to the corresponding period in 2019.

Amouage fragrances retail between $225 and $495 for 100ml. The company’s most expensive editions are the 100ml Limited Editions (Interlude Man, Reflection Man, Honour Woman, Dia Woman) and Special editions Extraits, which retail at $495.

The global market for fragrances and perfumes is projected to grow to $54.6bn by 2027 from about $43.6bn this year, growing at a compound annual growth rate of 3.3% according to a report by Research and Markets.

Amouage has 12 standalone stores and is available in around 1,000 department stores, airports and perfumeries across 80 countries. The company’s line includes more than 50 perfumes, as well as bath and body and home collections. Strong consumer demand, new talent capabilities and expansion into the US and Chinese markets are driving strong sales for Amouage.

In June, Amouage opened a direct subsidiary called Amouage Americas, with a head office in New York. This is the latest step in a global expansion strategy that also led to the opening of offices in Dubai earlier this year. But in spite of its outward-looking approach and international aspirations, the house remains steadfastly committed to its Omani heritage.

The brand was launched in 1983, as “the gift of kings”. Amouage’s founder, Sayyid Hamad Al Busaidi, approached the late Sultan Qaboos (left) with a proposition: he would create a product that would introduce Oman’s fragrance heritage to the world, something that would be worthy of being gifted to the sultan’s high-profile guests. It would contain ingredients native to Oman, from rock rose sourced in the Al Hajar Mountains, to the finest frankincense from Dhofar, and the precious ambergris that washes up on the country’s shores.

Beyond this storied history, the value of Amouage’s aromas lies in a continued commitment to those world-class ingredients first proposed by the house’s founder all those years ago. Amouage is unique in the concentration at which the natural ingredients are used :The eau de parfums contain 20%- 30% per cent fragrance oils and its extraits contain between 35%- 40% ,well above the industry average.

Time is the ultimate luxury; it’s in the mentality of people in Oman, and that also sets Amouage apart The frankincense tree takes 15 years to produce its first optimal harvest and Amouage’s creation and production process respect the need to honour this in its perfumes.

As well as creating an American subsidiary, it is targeting the high-end retail market in partnership with the top five department stores Nordstrom, Neiman Marcus, Bloomingdale’s, Bergdorf Goodman and Saks Fifth Avenue.

“The US is the biggest fragrance market and that’s why we want to expand our footprint there. We have an expansion roadmap from New York, to Houston, Atlanta and the West Coast in the upcoming months,” according to CEO xxxxx.

This overseas move is a logical next step for the company, but it won’t be an easy one as the US market is notoriously hard to crack for a niche brand.

Besides an international sales office in Dubai, Amouage is also expanding towards the East, with a focus on China. The luxury perfume maker already has a presence in online Chinese shopping platforms such as Tmall, WeChat, Weibo and Little Red Book, with future plans to go into leading department stores.

Currently, 10 markets account for 65% of Amouage’s business. These include Oman and the UAE, China, South Korea and Australia in the East, Russia, the UK and Italy, the US and Nigeria.

Channels of expansion for brands have increased with multiple digital channels such as direct-to-consumer apps, conversational commerce, influencer marketing and online marketplaces augmenting the traditional brick-and-mortar business.These factors have resulted in a significant reduction in the cost of expansion.

Ruling out an imminent initial public offering for Amouage, the perfume house, a subsidiary of Oman’s business conglomerate SABCO Group, values the autonomy in the current set-up which helps it to be agile in adapting to market conditions.

The Covid-19 pandemic resulted in operational challenges for Amouage such as supply chain delays, longer freight times and doubling or tripling of freight costs, the fragrance house feels it has “come out of the crisis stronger than ever before with a resilient supply chain”.

The pandemic also helped accelerate consumer behavioural change and e-commerce. Consumers are now looking for artisanal and exquisite brands that mirror their values as well as analysing companies’ work ethic and social framework. This fits with Amouage’s cultural ethos. Arabian perfume lies at the heart of Amouage and is intrinsically woven into every creation.

Amouage looks forward to building on the legacy of its past and forming a bridge of continuity between what has gone before and that which is to come, without ever forgetting the brand’s roots in Oman.

 

 

 

 

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