Agarwood Essential Oil Market Size 2024-2028
The agarwood essential oil market size is forecast to increase by USD 1.13 billion at a CAGR of 6.78% between 2023 and 2028.
- The market is experiencing significant growth, driven primarily by the expanding retail space and the rising demand for aromatherapy. The retail sector's growth is fueled by an increasing number of stores specializing in natural and organic products, as well as the proliferation of e-commerce platforms. This trend is expected to continue, providing ample opportunities for market participants. However, the market faces challenges as well. The availability of counterfeit Agarwood Essential Oil products poses a significant threat, as they undermine the industry's credibility and potentially harm consumers. These counterfeit products, which often contain synthetic fragrances instead of genuine essential oil, can lead to negative consumer experiences and potential health risks.
- Companies must invest in measures to combat counterfeiting, such as implementing robust quality control systems and collaborating with regulatory bodies to ensure product authenticity. By addressing these challenges and capitalizing on the market's growth drivers, the market participants can effectively navigate the competitive landscape and capture market share.
What will be the Size of the Agarwood Essential Oil Market during the forecast period?
- Agarwood, derived from the aquilaria tree, continues to captivate markets worldwide due to its unique aroma and therapeutic properties. The market is characterized by its dynamic nature, with ongoing research and development shaping its applications across various sectors. Oil quality is a significant factor influencing market trends, with consumers seeking high-grade, sustainably sourced oud oil. Alternative medicine and traditional practices, such as aromatherapy and traditional Chinese medicine, drive demand for agarwood's therapeutic benefits. Aquilaria cultivars undergo continuous research, including genetic modification and tissue culture, to improve yield and oil quality. HPLC analysis and other analytical techniques, such as gas chromatography and mass spectrometry, ensure quality control and authenticity.
- Incense oil and agarwood products, including perfumes and aromatic blends, cater to the growing demand for natural fragrances. Agarwood farming and plantations are evolving to meet this demand, employing sustainable harvesting practices and focusing on agarwood variety and aromatic compounds. The agarwood market's ongoing evolution is reflected in the emergence of new applications, such as stress relief and sleep improvement, and the development of synthetic agarwood and fragrance oils. These innovations continue to shape the market, offering opportunities for growth and expansion.
How is this Agarwood Essential Oil Industry segmented?
The agarwood essential oil industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
- Application
- Cosmetics and personal care
- Incense
- Therapeutics
- Others
- Type
- Natural agarwood essential oil
- Organic agarwood essential oil
- End-User
- Household
- Commercial
- Industrial
- Distribution Channel
- Online Retail
- Specialty Stores
- Direct Sales
- Distributors
- Geography
- North America
- US
- Mexico
- Europe
- France
- Germany
- Italy
- Spain
- UK
- Middle East and Africa
- UAE
- APAC
- Australia
- China
- India
- Japan
- South Korea
- South America
- Brazil
- Rest of World (ROW)
- North America
By Application Insights
The cosmetics and personal care segment is estimated to witness significant growth during the forecast period.
Agarwood essential oil, derived from the Agarwood tree, is a valuable commodity in the global market due to its unique aroma and therapeutic properties. The aromatic oil is produced through steam distillation or solvent extraction from the resin-rich heartwood. Agarwood farming and plantation have gained traction as sustainable harvesting practices are adopted to ensure the long-term availability of this precious resource. Mass spectrometry and HPLC analysis are crucial techniques used to determine the oil's quality and composition. Agarwood oil's specific gravity and refractive index are essential parameters for assessing its authenticity. Agarwood resin, wood chips, and shavings are also used in the production of incense oil and aromatic blends.
Agarwood essential oil's therapeutic benefits make it a popular choice in aromatherapy and alternative medicine. It is known for its stress-relieving properties and mood enhancement, contributing to its use in natural remedies for sleep improvement and relaxation. The oil's aroma profile is complex and harmonious, making it an essential ingredient in fragrance formulation and essential oil blending. The cosmetics and personal care segment is the largest market for agarwood essential oil, driven by increasing health and skincare awareness among consumers. Agarwood oil's benefits for skin and hair care have led to its inclusion in various products, from luxury skincare lines to everyday cosmetics.
For instance, Khalm Skincare, a US-based brand, launched in September 2020, specializing in oudh-infused products through direct-to-consumer e-commerce. International trade plays a significant role in the agarwood market, with countries like India, Indonesia, and Bangladesh being the major producers. However, the agarwood trade is subject to challenges, including supply chain complexities, quality control, and the risk of synthetic and artificial agarwood. Sustainable harvesting practices and genetic modification of aquilaria cultivars are being explored to address these challenges and ensure a steady supply of high-quality agarwood essential oil.
The Cosmetics and personal care segment was valued at USD 794.00 billion in 2018 and showed a gradual increase during the forecast period.
Regional Analysis
Europe is estimated to contribute 39% to the growth of the global market during the forecast period.Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Agarwood essential oils are experiencing significant demand in Europe due to their various health benefits and versatile applications in industries such as therapeutics, cosmetics, and personal care. Germany, the UK, France, and Spain are key markets for the sale of these essential oils. In the cosmetics sector, new product innovations incorporate agarwood essential oils as an ingredient. Europe's increasing preference for aromatherapy as an alternative medicine contributes to the market's expansion, particularly in countries like France, Germany, the UK, Austria, and Switzerland. Mass spectrometry and HPLC analysis are essential tools for ensuring oil quality, while sustainable harvesting practices and fair trade initiatives uphold ethical production.
Agarwood farming and plantations focus on cultivating specific agarwood varieties, such as the Aquilaria cultivar, to meet the growing demand. Steam distillation is the primary method for extracting the essential oil from the agarwood resin. Aromatherapy applications include stress relief, sleep improvement, and mood enhancement. Agarwood essential oils are also used in perfume and fragrance formulations, incense, and natural remedies. Wood chips, shavings, and resin are alternative forms of agarwood used for various purposes. The market's evolution includes research into synthetic agarwood, perfume oils, and artificial agarwood through tissue culture and solvent extraction. The supply chain involves various stakeholders, from agarwood farmers and plantation owners to traders, distributors, and end-users.
Quality control measures, such as specific gravity and refractive index assessments, ensure the authenticity and consistency of agarwood essential oils. The international trade of agarwood and its products is subject to regulations and certifications to maintain ethical and sustainable practices.
Market Dynamics
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The Agarwood Essential Oil Market thrives with organic agarwood essential oil and agarwood oil for perfumery. Sustainable agarwood oil production drives agarwood oil market trends, while premium agarwood oil brands cater to luxury markets. Agarwood oil for aromatherapy and agarwood oil for cosmetics boost demand, supported by agarwood oil supply chain. Eco-friendly agarwood oil and agarwood oil for wellness align with consumer preferences. The agarwood oil market forecast emphasizes agarwood oil for luxury skincare and sustainable agarwood harvesting. Agarwood oil for APAC markets grows, with agarwood oil for meditation and organic oud oil for retail gaining traction. Agarwood oil for spa industry and agarwood oil for high-end perfumes enhance appeal, while agarwood oil sourcing trends ensure high-quality agarwood oil exports through 2028.
What are the key market drivers leading to the rise in the adoption of Agarwood Essential Oil Industry?
- The expansion of retail space is a primary factor fueling market growth. This trend is particularly noticeable in urban areas, where there is a high demand for retail space and intense competition among businesses to secure prime locations. Additionally, the adoption of technology and innovative retail concepts, such as pop-up shops and e-commerce platforms, are further driving the growth of retail markets by expanding the reach and accessibility of retail offerings.
- Agarwood essential oil, derived from the agar tree through solvent extraction or steam distillation of wood chips, is gaining popularity for its aromatic profile and potential health benefits. This aromatic oil is used for sleep improvement, mood enhancement, and as a natural remedy in traditional medicine. According to recent research, the global market for agarwood essential oil is projected to grow due to increasing demand for fragrance formulations and essential oil blending. The retail sector's expansion and the rising preference for e-commerce as a sales medium are significant market drivers. In the Asia Pacific region, the retail market's robust growth is fueling the demand for agarwood essential oil.
- The most common distribution formats for this oil include supermarkets and hypermarkets, convenience stores, discount stores, and online portals. With the increasing popularity of essential oils and their numerous applications, the market is expected to experience significant growth during the forecast period.
What are the market trends shaping the Agarwood Essential Oil Industry?
- Aromatherapy, with its increasing popularity, represents an emerging market trend. The rising demand for this therapeutic practice reflects a growing interest in holistic health and wellness solutions.
- Agarwood essential oil, derived from the agar tree through steam distillation, is a prized component in aromatherapy. This ancient practice uses natural plant extracts to promote wellness and alleviate health issues. Agarwood oil's benefits include enhancing energy, aiding in healing, relieving headaches, improving digestion and circulation, inducing sleep, boosting cognitive function, reducing anxiety, and easing depression. The global demand for aromatherapy is on the rise, leading to an increasing supply of essential oils specifically for this purpose. To ensure ethical and sustainable sourcing, fair trade practices are essential in the agarwood trade. The production process involves careful monitoring of specific gravity and refractive index to ensure the highest quality oil.
- Mass spectrometry is used to analyze the oil's chemical composition, ensuring consistency and purity. The international supply chain for agarwood essential oil is complex, with various players involved in cultivation, processing, and distribution. Despite this, the market remains dynamic, driven by the growing popularity of aromatherapy and its numerous health benefits. Aromatherapy is a stress-relieving, immersive, and harmonious practice that continues to gain traction worldwide.
What challenges does the Agarwood Essential Oil Industry face during its growth?
- The proliferation of counterfeit products poses a significant challenge to the industry, threatening its growth and reputation.
- Agarwood essential oil, derived from the Aquilaria cultivar, is highly valued for its distinctive fragrance and therapeutic properties in alternative medicine. The oil is extracted through the distillation process from the heartwood of the tree, which develops due to various factors, including infections or injuries. The market for agarwood essential oil faces a significant challenge from counterfeit products. These fraudulent items are often produced using cheap seed oils or synthetic fragrances, misrepresenting the authentic essential oil. The high value of agarwood oil makes it an attractive target for adulteration, resulting in a negative impact on the reputation of reputable essential oil brands.
- Ensuring oil quality through HPLC analysis and agarwood farming in plantations that produce authentic agarwood varieties is crucial to mitigate the issue of counterfeit products. Agarwood products, including incense oil, continue to be in demand due to their therapeutic benefits.
Exclusive Customer Landscape
The agarwood essential oil market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the agarwood essential oil market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Key Companies & Market Insights
Companies are implementing various strategies, such as strategic alliances, agarwood essential oil market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.
The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
- Agarwood International
- Ajmal Perfumes
- Amouage
- Asgharali
- Assam Aromas
- Eden Botanicals
- Fragrance Du Bois
- Givaudan
- Hoang Giang Agarwood
- Imperial Oud
- Kyarazen
- Oud Elite
- Oudh Shop
- Swiss Arabian
- Taj Al Oud
- The Oudh Company
- Treasured Oud
- Yusuf Bhai
- Rasasi Perfumes
- Bodha
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Recent Development and News in Agarwood Essential Oil Market
- In February 2023, international fragrance and flavor company, Firmenich, announced the launch of a new Agarwood Essential Oil, named 'Agarwood Supreme'. This high-quality essential oil was developed through a unique extraction process, ensuring a consistent and sustainable supply (Firmenich, 2023).
- In May 2024, Dabur India, a leading Ayurvedic and natural health care company, entered into a strategic partnership with Indonesian agarwood producer, PT. Sumber Alam Perkasa Tbk. This collaboration aimed to secure a steady supply of agarwood and enhance Dabur's product offerings in the global market (Dabur India, 2024).
- In October 2024, major essential oil producer, doTERRA, invested USD10 million in a new agarwood oil distillation facility in Nepal. This investment was expected to increase doTERRA's market share and provide employment opportunities in the region (doTERRA, 2024).
- In March 2025, the European Commission approved the use of Agarwood Essential Oil as a flavoring agent in food and beverages. This approval expanded the market potential for agarwood essential oil in the European Union (European Commission, 2025).
Research Analyst Overview
The agarwood oil market is experiencing significant activity and trends, driven by escalating demand and investment opportunities. Agarwood oil distributors and suppliers are capitalizing on its numerous benefits, which include use in perfumes, natural and organic cosmetic, cosmetics, and traditional medicines. Agarwood oil production faces challenges due to the scarcity of the raw material and the need for sustainable practices. Agarwood oil standards and regulations are crucial to ensure authenticity and quality, while innovation and technology are pivotal to increasing supply. Agarwood oil prices remain volatile, influenced by market dynamics and supply-demand equilibrium. The agarwood oil industry is witnessing development in various applications, from luxury fragrances to pharmaceuticals.
Retailers and manufacturers are exploring new avenues for agarwood oil products, further fueling market growth. Certification schemes and sustainability initiatives are essential to mitigate the environmental impact of agarwood oil production and meet consumer expectations. The future of the agarwood oil market depends on a balance between supply and demand, innovation, and responsible production.
Dive into Technavio's robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Agarwood Essential Oil Market insights. See full methodology.
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Market Scope |
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Report Coverage |
Details |
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Page number |
165 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.78% |
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Market growth 2024-2028 |
USD 1128.9 million |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.23 |
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Key countries |
US, China, Germany, Japan, UK, Australia, India, France, Brazil, UAE, Rest of World (ROW), Saudi Arabia, France, South Korea, Mexico, Italy, and Spain |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
What are the Key Data Covered in this Agarwood Essential Oil Market Research and Growth Report?
- CAGR of the Agarwood Essential Oil industry during the forecast period
- Detailed information on factors that will drive the growth and forecasting between 2024 and 2028
- Precise estimation of the size of the market and its contribution of the industry in focus to the parent market
- Accurate predictions about upcoming growth and trends and changes in consumer behaviour
- Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
- Thorough analysis of the market's competitive landscape and detailed information about companies
- Comprehensive analysis of factors that will challenge the agarwood essential oil market growth of industry companies
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