The possibility of launching luxury perfumery fragrance project ambrosia in saudi arabia, china, and the us

TOPIC: THE POSSIBILITY OF LAUNCHING LUXURY PERFUMERY
FRAGRANCE PROJECT AMBROSIA IN SAUDI ARABIA, CHINA, AND THE US

ABSTRACT
Australian-based Fragrance Ambrosia is a manufacturer of natural cosmetics and
oils. Along with orientations for participation in three significant international markets and
the prerequisites, restrictions, and potential issues, the report on the project of the leading
fragrance company "Fragrance Ambrosia" is presented. The report is divided into three
stages. The first is an observation of the US, Saudi Arabia, and Chinese markets,
advantages, and the overall economic situation in the three countries, allowing Fragrance
Ambrosia to study specific concerns further and identify its solid elements. Then, there are
many staffing considerations and marketing techniques for successfully entering and
advertising the market, followed by suggested appropriate ways to form businesses and
risk factors in the final stage.
All three of these markets have much potential, but breaking into reliable and
resilient markets is difficult. In order to enter markets that the perfumery industry predicts
will experience future positive growth, Ambrosia will need to have determined and
persuasive strategies as well as lessons learned from other brands in every way. Before
hiring staff for international offices, Fragrance Ambrosia must have a professional work
environment and employ the best management practices. Ambrosia must ensure an
adequate supply of goods when opening new branches in Saudi Arabia, China, and the
USA because if there is a phenomenon of out-of-stock or shortage of goods, it will leave
customers with a negative impression.

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TABLE OF CONTENTS
ABSTRACT...........................................................................................................................i
1. INTRODUCTION.......................................................................................................1
2. BODY............................................................................................................................2

2.1. SAUDI ARABIA, CHINA AND USA'S MARKETS........................................2
2.2: STAFFING CONSIDERATIONS AND MARKETING STRATEGY IN THE
FOREIGN MARKETS..............................................................................................6
2.4. BUSINESS FORMS & RISK FACTORS..........................................................7
3. CONCLUSIONS..........................................................................................................8
4. RECOMMENDATION...............................................................................................8
5. REFERENCE LIST..................................................................................................10

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1. INTRODUCTION
The report on the project of the premier perfume company "Fragrance Ambrosia" is
presented, along with the orientations for participation in three important international
markets and the prerequisites, restrictions, and potential issues. Fragrance Ambrosia is a
natural oil and cosmetics firm based in Australia that mainly sells in Australia and New
Zealand. Currently, the organization is looking for a business opportunity abroad to expand
its operations. Accelerating business growth is one of the most important benefits of
international expansion. International market entry enables businesses to grow more
quickly. By expanding the company's global reach, new audiences are exposed to its goods
and services, which might encourage further growth(Nalbandyan, H., 2017). Gaining
access to new markets is another aspect of international expansion. It makes sense for
Ambrosia to expand the company overseas, given that it is a prosperous enterprise in the
motherland. The company may be able to expand its customer base by opening up new
markets(Delios, A., 2011).
First of all, most American women believe that they must impress others to be
"hot" in society, creating a solid need to spend money on appearances. Second, Saudi
Arabia has one of the most influential markets in the world for men's skincare and perfume
products, and men there place a high priority on dressing well and looking good to attract
women. Finally, many Chinese consumers are now looking for more pure natural beauty

products due to their increased awareness of the drawbacks of traditional cosmetics
ingredients. Therefore, this is an excellent opportunity for Ambrosia to penetrate the
market in these three countries.

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2. BODY
2.1. SAUDI ARABIA, CHINA AND USA'S MARKETS
Saudi Arabia Market
The Middle Eastern Kingdom of Saudi Arabia is the second-largest OPEC Member
State and the 14th- area largest nation, with a total area of around two million square
kilometers. Over seven million people reside in the capital of Saudi Arabia, which has a
population of about 35.5 million. Saudi Arabia has approximately 17% of the world's
proven petroleum reserves.
Figure 1: The countries with the largest oil reserves

<Source: Bates. A, 2022>
For thousands of years, perfumery has been an integral part of Arab culture, and as
Islam spread throughout the Arab world, its use also grew. Arabs and Persians made
daylong journeys through the sweltering desert to trade priceless goods like wood and
saffron. Traditional Arabian perfumes do not contain alcohol. According to P&S
Intelligence, the size of the Saudi Arabian fragrance market in 2022 was estimated to be
$2,049.7 million, and from 2022 to 2030, it will expand at a CAGR of 6.1 percent.
In 2021, luxury goods in Saudi Arabia accounted for about 80% of total revenue
because Saudi Arabia, with its high levels of individual income and thriving oil and gas,
banking, and financial sectors, has one of the fastest-growing economies in the world. The

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nation is also experiencing rapid population growth, and today's most powerful driver of
the soaring demand for high-end fragrance goods is young people.
Figure 2: Saudi Arabia fragrance market category breakdown, in value(2021)

<Source: P&S Intelligence>
Chinese market
In 1909, China opened its first consulate in Australia, and diplomatic ties were
established in 1941. China and Australia's relationship has developed significantly over
time. Both nations are actively involved in various organizations, including APEC, the
East Asia Summit, and the G20, in their economies, cultures, and politics(Beeson, 2017).
China and the United States had the two largest economies in 2017 when measured
in Purchasing Power Standards (PPS), with 16.4% and 16.3 percent, respectively. Saudi
Arabia had the fourteenth-largest economy in comparison.
Figure 3: Shares in world GDP in PPS in 2017

Any business that can execute a successful marketing plan will find the Chinese
market to be a gold mine. According to a recent report, cheap Chinese perfume retailers are
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proliferating (with a combined market share of 20 percent). Still, no domestic brand has yet
to seize control of this lucrative sector and position itself as the top dog.
Figure 4: Estimated market size of fragrance product distribution industry in
China(2014-2024)

<Source: Statista 2021>
The market increased 48.2% between 2014 and 2018, and it is anticipated that the
annual retail sales of fragrances will increase from $1.18 billion in 2018 to $1.81 billion in
2023. (Ecommerce China, 2022). Despite having 1 percent of the global perfume market,

China has 18 percent of the world's population. Due to this enormous gap, perfume
companies are now flocking into the Chinese market.
According to Snijder, R., well-known international brands appear to be more wellliked than domestic fragrances, and foreign companies' entry barriers in raw materials,
craft, and even global marketing make it difficult for domestic rivals to succeed. Regular
high-ranking positions are not quickly overturned. This sizable market, however, is worth
entering and breaking into despite its many opportunities and difficulties.
US Market
Australia and the United States have an unmatched breadth, depth, and length of
relationship characterized by a genuine cultural affinity and a collaborative spirit. The
current relationship between the two nations spans a variety of fields of endeavor,
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including cooperation in the areas of security and defense, extensive trade and investment
ties that support both Australian and American jobs, cultural exchanges, research,
development, sporting rivalry and tourism( Rollo, S., 2018). The American market will
undoubtedly be challenging for any new brand, including Australian exporters. Revenue
for the Fragrances segment is projected to reach US$8.15 billion in 2022 using current
exchange rates and considering the market effects of the Russia-Ukraine war.
Figure 5: The US fragrance revenue(2014-2026)

<Source: Statista>
According to population statistics, US$24.33 in revenue is expected per person in
2022, and non-luxury products will account for 58 percent of Fragrances segment sales
( Statista, 2022). This will present a challenge for upscale companies like Ambrosia.
Brands with a notable reputation in the perfume industry include Creed (UK), Roja
Dove (France), Roja Dove (UK), House of Sillage (France), Bulgari Parfums
(Switzerland), Krigler (France), and Cacharel (France). Pacific Rock Moss Parfum, Blue
Cypress Parfum, and Desert Rosewood Parfum are a few Australian brands that are
available. Still, they are considerably less expensive than brands from the UK and France.

Although there is a slight price advantage, it is not easy to compete on trademarks.

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2.2: STAFFING CONSIDERATIONS AND MARKETING STRATEGY IN THE
FOREIGN MARKETS
Staffing considerations
Program support and system characteristics, such as broader organizational factors,
particular practices and procedures, and staffing considerations important to fostering
program success, have an impact on program success (Hunter, P., 2017)
A brand must have solid and persuasive strategies and lessons learned from other
brands in every way to enter markets that the perfumery industry predicts will experience
future growth. This will allow the brand to meet the challenges quickly ahead. Ambrosia
branches will hire reputable managers in those nations and receive cultural sensitivity
training in the nation and state to which they will be delegated, particularly in culturally
developed markets like China and Saudi Arabia. Local employees will be used because
they are well-communicated and understand the culture. Since Ambrosia perfume is a
high-end product line, all employees will receive thorough training in perfume samples and
how to greet and deal with customers. The company should also get suggestions from other
Australian business owners on making employees want to work for Ambrosia’s
organizations.
Marketing strategy
Businesses today must engage in fierce competition to establish their brand. There
are numerous competing businesses; if one brand purposefully ignores the promotion of
perfume products, it may go unnoticed forever (Dementieva, 2021). Marketing has also
supported higher product sales (Zhang, 2015). Ambrosia must therefore advertise its
fragrances to grow its business.
Customer Survey
A survey is necessary as the first step in bringing Ambrosia perfume to market. In

this instance, the company should conduct surveys offline and online in Saudi Arabian,
Chinese, and American malls. This aids in identifying the client's preferred fragrances. See
what appeals to consumers of perfume the most. We can only provide the right products in
this way.
Free Trial Samples in China And USA Market
The truth is that everyone enjoys receiving gifts, especially ones that are entirely
free. Every time a customer purchased after the company opened branches in China And
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USA, it was able to give them a sample of a new perfume, giving them more options for
their collection and encouraging them to return to the store.
Limited perfume production exclusively for Saudi Arabia
Something tends to lose value when it becomes overly familiar. Ambrosia should
release limited fragrances once or twice a year for this market. The brand's sophistication
and distinctive qualities will impress customers who buy perfume.
2.4. BUSINESS FORMS & RISK FACTORS
Business form
If it is profitable to open additional branches abroad, Ambrosia must properly
register the company. It is crucial to remember that each legal system has unique legal and
tax ramifications in each nation (Klymentiev, M., 2014). Ambrosia should work with
business consultants so they can offer qualified advice on business paperwork and help her
choose a suitable location for the enterprise. A bustling marketplace or storefront can be a
good location for a site, but the cost of good locations may be somewhat high.
Moreover, finding the ideal perfume can be challenging for every customer because
Ambrosia offers various perfume products with different designs, costs, and scents.
Therefore, Fragrance Ambrosia should choose an efficient online sales channel, such as
Facebook, to sell on Shopee, Ladada, and Amazon besides conducting business by opening
brick and mortar stores.
Risk Factor

Purchasers must provide information to the shipping service about the origin and
specific condition of the liquid when sending supplies because it is a delicate item that
should be treated with care (Artico, 2015). This is especially true when sending items
internationally or via timed express delivery. Producers and sellers box the majority of
delicate items. Moreover, when importing products, it is impossible to avoid collisions
during transportation, especially when traveling a long distance, so the manufacturer's
packaging stage does not guarantee the safety of the product.

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3. CONCLUSIONS
In summary, the report simulates three markets of Saudi Arabia, China, and the US
in recent years through the economy in general and especially the perfume industry and
cultural environments. All three of these markets have much potential, but with many
different brands, it is not easy to penetrate solid and long-lasting markets.
Ambrosia must have decisive and persuasive strategies and lessons learned from
other brands in every way to enter markets that the perfumery industry predicts will
experience future solid growth. As a result, the company can successfully navigate its
upcoming challenges. Ambrosia branch managers should be hired in Saudi Arabia, China,
or the US. Local employees will be used because they can communicate and understand
the culture more. Since Ambrosia perfume is a high-end product line, all employees will
receive thorough training in perfume samples and how to greet and engage with clients.
Additionally, managers from Australia will receive cultural sensitivity training for the
nation and state they will be transferred to, particularly in culturally important markets like
China and Saudi Arabia.
Moreover, it is crucial to remember that each legal structure has unique legal and
tax ramifications in every nation. Ambrosia should contact consultants or business advisors
for qualified advice on business forms.
4. RECOMMENDATION

To avoid risks and make good use of these three complex but potential markets,
besides many measures, Ambrosia should pay special attention to three-party commercial
contracts, including intermediaries or a contracted partner, then sell to a third party as a
consignee. Because dealing with problems related to this contract is difficult, there may be
a deadlock due to the intervention to handle issues with local legal regulations.
When opening new branches in Saudi Arabia, China and USA, Ambrosia needs to
ensure adequate supply because if there is a phenomenon of out-of-stock or shortage of
goods, it will leave a bad impression on consumers. For goods with high-profit margins
and high demand, it is feasible to consider air freight when air shipment prices are very
competitive in the context of the COVID-19 pandemic.
The eye-catching images and articles catch customers' attention who have not yet
assessed the product quality. Therefore, the company may consider creating unique designs
for each market in the campaign. People still do a lot of their shopping online because of
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the complicated progression of the covid pandemic. However, online businesses will be
less risky than opening many brick-and-mortar stores.

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5. REFERENCE LIST
Academic journals:
1.

Artico, Chiara Isadora and Tamma, Michele, Culture-Based Products:

Integrating Cultural and Commercial Strategies. Cases from the Luxury Perfumery
Industry (September 2015). Department of Management, Università Ca' Foscari Venezia

Working Paper No. 2015 / 07, Available at: or
/>2.

Beeson, M. and Zeng, J., 2017. Realistic Relations? How the Evolving

Bilateral Relationship is Understood in China and Australia. Pacific Focus, 32(2), pp.1518.

Available

at

:

/>Relationship_is_Understood_in_China_and_Australia
3.

Delios, A., 2011. Experience and a firm's performance in foreign markets:

A commentary essay. Journal of Business Research, 64(2), pp.227-229.
4.

Dementieva, Alla and Kandinskaia, Olga and Khotyasheva, Olga and

Slesarev, Maxim, Tonka Perfumes Moscow (Russia): Growth Strategy Dilemma and
Choice

of

Digital

Marketing

Tools

(October

29,

2021).

Available

at

:

/>5.

Hunter, P., Kaasalainen, S., Froggatt, K., Ploeg, J., Dolovich, L., Simard, J.

and Salsali, M., 2017. Using the ecological framework to identify barriers and enablers to
implementing Namaste Care in Canada’s long-term care system. Annals of Palliative
Medicine,

6(4),

pp.3-4.

Available

at:

/>6.
Society,

Klymentiev, M., 2014. Creating Spices for the Mind. The Senses and
9(2),

pp.12-13.

/>
article=5152&context=etd
7.

Nalbandyan, H., 2017. SMES ENTRY MODE CHOICE INTO FOREIGN

MARKETS. Business Strategies, (1), pp.2-3.
8.

Rollo, S., 2018. The ‘Asia threat’ in the US–Australia relationship: then and

now. International Relations of the Asia-Pacific, 20(2), pp.225-252. Available at:
/>ip_Then_and_Now

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9.

Snijder, R., 2015. Evaluating the Impact of the FWF-E-Book-Library

Collection in the OAPEN Library: An Analysis of the 2014 Download Data. D-Lib
Magazine, 21(7/8). Available at: />10.

Zhang, D. (2015), Assessing Designer Confidence and Prediction Accuracy.

Creativity and Innovation Management. />Web:
1.
Available

Australian Government. 2022. Saudi Arabia country brief. [online]
at:

< />
[Accessed 5 August 2022].
2.

Bates.

A.

2022.

Libya.

[online]

TAdviser.ru.

Available

at:

< [Accessed 3 August 2022].
3.

Data.worldbank.org. 2022. GDP per capita (current US$) - United States |

Data. [online] Available at: < />locations=US> [Accessed 6 August 2022].
4.

Ecommerce China. 2022. Perfume in China: An Unmature Market Full of

Opportunities. [online] Available at: < [Accessed 5 August 2022].
5.

P&S Intelligence. 2022. Saudi Arabia Fragrance Market Outlook Report,

2022-2030.

[online]

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< />[Accessed 3 August 2022].
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Statista. 2022. Fragrances - United States | Statista Market Forecast. [online]

Available at: < />united-states> [Accessed 6 August 2022].

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