Emailing them could be acceptable -- and I would even say it should be encouraged! -- but you have to tread very carefully. If you write an email like
Hey Dr. Jones,
I saw your newest paper on arXiv and I noticed you didn't cite [Wouter et al, 2020], do you think you can post an update and cite me?
this would come across very poorly, and in general the above email would be socially unacceptable.
Instead, you could follow the following steps:
Read the paper carefully to find how it relates. It is likely that you, as an author of the other paper, are overestimating the overlap. There still may be some important overlaps, and reading it carefully will allow you to narrow down on the precise similarities.
For example, you mentioned that their broad and 'catchy' title overlaps with your paper, but if the actual material does not overlap, then the overlap in the title is probably superficial and doesn't require a citation here.
Once you understand the scope of the overlap, consider how many papers there are in this topic. Is this a topic with dozens of papers every year, in both high-quality venues and low-quality venues or arXiv? Or are both of your papers the only ones even addressing this topic? In the former case, I would expect that citing you is wrong (they should instead cite one of the more classic or well-known examples in the literature); in the latter case, I think they should cite you (although given that they didn't, they probably aren't aware of your paper).
At this point there are two cases: either you have determined that there is overlap and they should consider citing you, or you have determined that it's probably fine that they didn't cite you. If you still think they should cite you, then you can proceed to the next steps:
See if your advisor or a senior colleague knows this group, and can email them instead. It would be far better to get an email from someone they know about this, rather than some PhD student they haven't heard of.
Finally, as a last resort, write the email yourself. But keep the email professional and careful.
Don't say that they should cite you; do say they might be interested in your recent work.
Do assume that the work was done completely in parallel (it probably was).
Don't overstate the overlap or relevance of your work.
Don't assert that they have an obligation to be aware of your work; the literature is usually extremely vast, and it is hard to keep up with everything, especially arXiv papers with 0 citations posted a few months ago.
If there is another paper, other than yours, that is more representative of the line of work that your paper represents, which they didn't cite, suggest that work instead. And maybe in that case, don't mention your paper at all.
Above all, focus on your interest in their work; state that you saw their work and found it interesting; you can even ask questions, see if they have tried method X or considered question Y. Best case scenario, this could be an opportunity for future collaboration (or you could be a postdoc in the group later, etc.)
I think if you follow the above steps and guidelines, the email should be OK. And if they really should cite you, hopefully this diplomatic approach will cause them to do the right thing (the scientifically honest thing) by citing you.
If you decide not to write an email, then what you can do instead is cite their work in the future. Or meet them at a conference. These are more organic ways for awareness across research groups to develop.