GCC-based oud houses are eying aggressive international expansion as sales of the strong scent increase and demand grows outside their traditional markets.
Oud, used throughout the Arab world for centuries, is gaining popularity abroad among western users and has seen Gulf retail spending stay strong amid fears of a global slowdown.
Dubai-based Ajmal Perfume, where a bottle of oud can set consumers back between $41-1361, plans to double its current turnover of $220m in the next five years as it grows the number of stores and distribution network outside of its home market, its CEO told Arabian Business.
“I’d like to be in at least 80 countries in the next five years. We have aggressive expansion plans, within five years we would like to 200 stores, be in 75 countries and double our turnover,” said Abdulla Ajmal.
Arabian Oud, which operates 600 stores internationally, said it is investing up to $2bn on growing its brand internationally.
“Our goal is to reach 1,000 shops by 2013. We are talking about [investing] around $2bn. We are still opening in the Middle East and they’ll be a good numbers in North America and South America too,” said CEO, Abdulla Al Darwesh.
“America is a very big potential market for our product. Around 40 percent of our customers in London are American; they buy in bulk.”
The Saudi firm, founded by chairman Abdul-Aziz Al Jasser, said sales increased 30 percent last year as loyal customers increased their average spend. Sales increased 12 percent in the first eleven months of this year, said Al Darwesh.
Arabs have been using oud, a resin from the Aquilaria tree in Eastern India, for hundreds of years. The oils can cost up to tens of thousands of dollars per kilo.
The GCC is one of the world’s largest consumers per capita of perfume. Perfume sales in Saudi Arabia, the Gulf’s largest economy, and the UAE reached $827.5m and $205.8m last year, according to the research firm Euromonitor International.
Sales across the Gulf are expected to increase five percent this year, said the firm.
GCC-nationals spend an average of $190 per visit to Ajmal Perfume.
“Our average customer comes in almost one to two weeks,” said Ajmal. “The perfume industry is affordable luxury but most importantly in this part of the world its part of the culture; a necessity. A lot of our clientele actually budget for it.”
Oud houses expansion plans are also being driven by the rising trend for strong scents in the west. Tom Ford, London-based perfumer Jo Malone and Christian Dior have all launched oud-based perfumes in recent years.
“Everybody is going mad for oud,” said Ajmal.
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