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Olfactory Lab

Opportunity overview

Launching an immersive Olfactory Lab in AlUla, offering visitors the unique experience of creating their own personalized perfumes and candles.
This concept leverages the Kingdom’s rich olfactory heritage, the cultural significance of fragrances, and the growing demand for experiential tourism, while complementing AlUla’s strategic positioning as a global cultural destination.

Investment Highlights

Required Investment :
SAR 1.0 Mn
Internal Rate of Return (IRR) :
15.6%
Net Present Value (NPV) :
~SAR 399,000
Market Size :
SAR 9.9 Bn in 2024

Value Proposition

  • Saudi Arabia’s ambition to attract 150 million visitors annually by 2030 will significantly increase tourist flows to AlUla, which already exceeded its 2023 target of 250,000 visitors.

  • The Kingdom possesses outstanding natural fragrance resources such as Taif rose production, combined with one of the world’s highest per-capita spending on perfumes—Saudis spend on average SAR 2,625 per month on fragrances and
    essential oils.

  • Very few olfactory labs operate in the local market, especially in AlUla, offering early entrants a strong competitive advantage.

  • The lab introduces a premium, customizable cultural experience that blends heritage, creativity, and tourism—strongly aligned with the cultural and experiential tourism pillars of Vision 2030.

Key Demand Drivers

  • The Saudi perfume market, valued at SAR 8.1 Bn in 2021, is growing at 7% CAGR and expected to surpass SAR 14 Bn by 2030.
  • Saudi consumers exhibit exceptionally high demand for fragrances, with monthly spending far above global averages.
  • The Royal Commission for AlUla aims to welcome 2 million visitors annually and support the creation of 40,500 jobs by 2035, reinforcing demand for high-quality cultural experiences.
  • Growing global and local appetite for personalized fragrance creation and immersive, hands-on workshops.

Target Market

  • Domestic and international tourists
  • Local residents
  • High-spending perfume enthusiasts
  • Cultural and experiential tourism segments

Revenue Drivers

  • Perfume-making workshops
  • Candle-making workshops
  • Retail sales of customized perfumes and fragrance products

Enablers & Incentives

  • The Heritage Commission provides accelerators, creative spaces, expert access, and grants to support emerging cultural enterprises.
  • The Tourism Development Fund (TDF) offers financing solutions of up to SAR 1 Mn for tourism-focused small businesses and experience providers.
  • The HRDF and Ministry of Culture jointly support employment by subsidizing up to 50% of salaries for 160 cultural professions.
  • The Cultural Development Fund (CDF) offers funding guarantees, grants, development programs, and consulting to strengthen the cultural sector.
  • MISA provides comprehensive guidance on accessing governmental incentives and regulatory support.

Scalability & Localization

  • The olfactory lab can begin with workshops and direct retail, then expand through e-commerce, branded fragrance lines, and multi-city experiential locations across KSA.
  • High scalability potential through product diversification, online sales, and international collaborations with global perfumers.

Global Trends in the Sector

  • Rising demand for natural, organic, and eco-friendly fragrance ingredients and sustainable packaging.
  • Strong shift toward customization and personalization, with consumers seeking tailor-made scents.
  • Growing interest in aromatherapy, wellness fragrances, and mood-enhancing scents as part of self-care.
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