Pakistan’s perfume industry has seen a significant rise in the past decade, specifically from 2017 to 2024, when several brands jumped on the fast fashion-to-fragrance bandwagon.   Well known  clothing brands — including Khaadi, Gul Ahmed, Bonanza, and Alkaram -  are diving headfirst into the now-competitive perfume market, which has otherwise remained dominated by foreign brands.         According to a recent  study byEuromonitor,  the industry is expected to see a steady year-on-year growth rate of 9.6 per cent from 2007 to 2026.    According to Junaid ur Rehman, the Director of Operations at Scentcepts and former general manager of Gul Ahmed’s Fragrance and Beauty division until 2023, these figures are  understated.     “Most sales here are undocumented, so it’s difficult to curate data. But, given the unofficial data and industry insights, the perfume industry should grow by around 16-18pc. If you talk about the retail industry as a whole, it is growing between approximately 18-22pc, so a 2.7pc growth rate doesn’t make sense.”  ‘The domestic scents industry could be a Rs25-30bn market in the next 3-4 years’.    The brand   Ideas  made Rs0.5 billion in perfume sales in its first year. This year their target is Rs2bn; if it meets that target, that’s almost a 300pc jump.    J. doesn’t have this kind of drastic growth rate anymore, because it’s already established and found its market.      Why have brands decided to collectively march headfirst into perfumery, and how are they expecting to maintain their newly-earned status as coveted perfume brands in the face of newer, higher taxes?   As a luxury product, perfumes have long been slapped with a comparatively higher GST of around 20pc, which has now been upped to 25pc.    these brands have relied largely on ready-to-wear clothing as their main product, so much so that the industry is saturated. Since a diverse product range and innovation are key in maintaining a fresh market presence they set out to dip their toes into what used to be a fairly empty playing field.          In the years before import duties became very high, brands worked with foreign manufacturers to develop scents and produce a final packaged product that was imported into Pakistan.   in the past these perfumes were made with foreign alcohol, since at the time Pakistani alcohol was considered a by-product from sugar and molasses production and was generally exported unfiltered since there was no local industry to feed high-quality, filtered alcohol. Pakistan also had a generous influx of high-brow foreign perfumes at a generally reasonable cost.      Importing the perfumes in disassembled elements instead of a final, packaged product.  Up until last year, the duty on a finished product was around 130-135pc. So, they started importing all the components separately, which had on average 30-40pc duty; comparatively more cost-effective.”      This opened avenues for local production companies in Pakistan, with outfits like Alpha Labs, Hemani, La Beaut, and Khwaja Arisols opening their doors to local brands. J. Perfume, has even recently opted to set up its own factory in 2023. Other companies, as they continue growing, may follow suit in the distant future.      Local alcohol production underwent a revolution. Sohail Siddiqui, the Senior General Manager of Operations at J. Perfume, explains, “Alcohol pre-2005 was wasted. There was no industry to make use of it, and only in later years did it occur to firms that they could try and export the alcohol. Now, with the local perfume production, Pakistani alcohol has found a significant use and is produced as a high-quality raw material for the industry.” (ICE ISLAMABAD)

Fonte notizia: dawn