JEDDAH, 16 December 2005 — Gray market has become huge and poses a serious threat to the genuine perfume industry.
“Gray market in perfumes exists here, in the region and many other parts of the world. It needs concerted efforts from all those involved in the organized sector to tackle it. Otherwise, I don’t think we can stop it by any means,” Ibrahim M. Ali Mattar, general manager of Hussein Gazzaz & Co., said on Wednesday.
“It’s difficult to quantify the gray market in terms of money. It’s also difficult to quantify how much the genuine perfume industry is losing due to the gray market,” he said during the launch of Italy-based Eurocosmesi’s latest men’s fragrance “Canali,” created by French “nose” Pierre Burdon. “Widespread education on the risks involved in using counterfeit or imitation perfumes can only help,” he added.
Pierre Caunac of Eurocosmesi, Middle East & Africa, said the problem of gray market posed a serious threat to genuine perfume manufacturers worldwide. “It’s an issue which needs urgent attention and needs to be tackled seriously,” he said.
Canali, which has been making men’s apparel of traditional and innovative style “with sartorial artistry from best Italian and English fabrics,” now enters the world of fragrances, he added.
Saudi Arabia is one of the largest markets for cosmetics and toiletries, estimated to be worth $1.3 billion in 2003 and expected to reach more than $1.4 billion by 2006. “Oriental” oils, mixtures and incenses represent almost one-third of the market, close to $400 million annually, according to market leaders. French products dominate the market, especially designer brands.
The European Union accounts for a major share of all of the Kingdom’s cosmetic and perfume imports at 34 percent, followed by China and the Far East.
US companies rank next with close to 16 percent of total imports. Products, especially cosmetics, sourced in China, India, and Taiwan are also in demand.
“Young teenagers and low-income groups usually fall prey to the products offered in the grey market,” an executive of a major perfume company said.
