Global Agarwood Essential Oil Market Size, Share and Trends Analysis Report – Industry Overview and Forecast to 2032

Global Agarwood Essential Oil Market Segmentation, By Type (Compound Essential Oil and Pure Essential Oil), Raw Material (Wood, Flowers, Bark and Resin), Application (Food and Beverage Industry, Cosmetics and Personal Care Industry and Pharmaceutical Industry), Sales Channel (Specialty Drug Stores, Supermarkets or Hypermarkets, E-commerce and Convenience Stores)- Industry Trends and Forecast to 2032

Agarwood Essential Oil Market Size

• The global agarwood essential oil market size was valued at USD 230.6 billion in 2024 and is expected to reach USD 378.78 billion by 2032, at a CAGR of 6.4% during the forecast period
• The market growth is largely fuelled by the rising demand for natural and exotic fragrances in perfumes, cosmetics, and personal care products, along with increasing awareness of aromatherapy and wellness applications
• The growth is further supported by the expanding use of agarwood oil in traditional medicine, luxury products, and high-end incense, driven by its unique aroma, therapeutic properties, and premium market positioning

Agarwood Essential Oil Market Analysis

• Increasing consumer preference for organic and naturally derived products is driving the adoption of agarwood essential oil across global markets. The trend toward wellness, stress relief, and holistic lifestyles is boosting demand in aromatherapy and spa applications
• The limited supply of natural agarwood, combined with high extraction costs, supports the premium pricing of agarwood essential oil, enhancing its appeal in luxury and niche markets
• Asia-Pacific dominated the agarwood essential oil market with the largest revenue share in 2024, driven by increasing consumer awareness of natural wellness products, the expanding perfumery and personal care industries, and the growing adoption of aromatherapy and luxury fragrances
• North America region is expected to witness the highest growth rate in the global agarwood essential oil market, driven by rising consumer spending on luxury wellness products and the adoption of natural and plant-based ingredients
• The Pure Essential Oil segment held the largest market revenue share in 2024, driven by its high therapeutic value, authenticity, and strong demand in luxury fragrances and wellness products. Pure oils are highly preferred by perfumers and aromatherapy brands for their potency, purity, and consistency

Report Scope and Agarwood Essential Oil Market Segmentation         

Agarwood Essential Oil Market Trends

“Increasing Adoption of Agarwood Essential Oil in Perfumery, Aromatherapy, and Wellness Products”

•  The growing incorporation of agarwood essential oil in perfumes, aromatherapy, and wellness products is transforming the fragrance and personal care landscape by offering unique woody notes, calming effects, and luxurious appeal. Its natural aroma and therapeutic properties are enhancing product differentiation and consumer engagement
•  Rising demand for high-quality, pure, and sustainably sourced agarwood oil is driving the adoption of premium-grade oils in spa therapies, luxury cosmetics, and holistic wellness products. Consumers increasingly prefer natural and ethically sourced oils over synthetic alternatives, fueling market growth
•  The versatility of agarwood oil, compatible with carrier oils, diffusers, skincare formulations, and scented candles, encourages product innovation and expansion of applications. This promotes increased consumer accessibility and repeated usage, strengthening brand loyalty
•  For instance, in 2023, several North American and Asian luxury fragrance companies launched new perfume lines enriched with agarwood essential oil, leading to higher product visibility, elevated sales, and increased consumer awareness of sustainable fragrance ingredients
•  While agarwood oil adoption is accelerating growth in perfumery and wellness, market expansion depends on sustainable sourcing practices, cost-efficient extraction techniques, and regulatory compliance for purity and safety standards

Agarwood Essential Oil Market Dynamics

Driver

“Rising Awareness of Natural Wellness and Luxury Fragrance Products”

•  Growing consumer awareness of natural and holistic wellness solutions is driving demand for agarwood essential oil in aromatherapy, spa treatments, and personal care products. Its unique therapeutic properties support relaxation, stress reduction, mental well-being, and sleep improvement, making it highly sought after in wellness-focused markets
•  The increasing popularity of premium and luxury fragrances is pushing perfumers to incorporate high-quality agarwood essential oil into niche perfumes and scented products, enhancing exclusivity and consumer appeal. Limited edition and artisanal fragrance lines are particularly benefiting from this trend, adding value to luxury offerings
•  Global wellness initiatives and growing demand for plant-based and sustainable ingredients in personal care are further boosting agarwood oil adoption, particularly in developed and emerging markets. Brands are increasingly marketing eco-conscious sourcing and ethical cultivation as a selling point, attracting environmentally aware consumers
•  For instance, in 2022, several European and Middle Eastern fragrance and wellness brands expanded their agarwood essential oil product lines to cater to rising consumer interest, enhancing market penetration and revenue. New collaborations between luxury brands and sustainable growers helped ensure traceability, quality, and consumer trust
•  While wellness awareness and luxury demand are key growth drivers, market expansion relies on sustainable cultivation, consistent quality, and consumer education on the benefits of agarwood oil. Companies must also invest in marketing campaigns that highlight authenticity, purity, and therapeutic value to maintain consumer confidence

Restraint/Challenge

“High Cost of Agarwood Oil and Limited Sustainable Supply”

•  Agarwood essential oil remains highly expensive due to the slow growth of Aquilaria trees and limited availability of naturally resinous wood, restricting accessibility for price-sensitive markets and small-scale manufacturers. The long maturation period of trees (up to 20 years) adds to production costs and limits large-scale cultivation
•  Variability in oil quality, adulteration risks, and complex extraction processes hinder consistency, making quality control and standardization a critical challenge for producers and end-users. This inconsistency affects fragrance composition, therapeutic efficacy, and overall consumer satisfaction, forcing brands to invest in rigorous testing protocols
•  Regulatory restrictions on wild harvesting, conservation laws, and import/export controls further limit supply, increasing reliance on cultivated and certified sources, which may involve higher costs. Compliance with CITES and local forestry regulations adds administrative complexity, particularly for international trade
•  For instance, in 2023, several Asian and Middle Eastern suppliers faced production shortages and price volatility due to limited raw material availability and stringent CITES regulations governing Aquilaria trade. These disruptions temporarily constrained market growth and prompted shifts toward alternative sourcing regions
•  While technological advancements in cultivation and distillation are improving efficiency, addressing cost, quality, and sustainable supply challenges remains essential for the long-term growth of the global agarwood essential oil market. Innovation in plantation management, high-yield resin induction, and advanced extraction methods are critical to ensuring stable supply and maintaining competitive pricing

Agarwood Essential Oil Market Scope

The global agarwood essential oil market is segmented on the basis of type, raw material, application, and sales channel.

• By Type

On the basis of type, the agarwood essential oil market is segmented into Compound Essential Oil and Pure Essential Oil. The Pure Essential Oil segment held the largest market revenue share in 2024, driven by its high therapeutic value, authenticity, and strong demand in luxury fragrances and wellness products. Pure oils are highly preferred by perfumers and aromatherapy brands for their potency, purity, and consistency.

The Compound Essential Oil segment is expected to witness the fastest growth rate from 2025 to 2032, fueled by its cost-effectiveness and versatility in personal care and cosmetic formulations. Compound oils, often blended for enhanced aroma or extended shelf life, are increasingly adopted by manufacturers looking to balance quality with affordability for mass-market applications.

• By Raw Material

On the basis of raw material, the agarwood essential oil market is segmented into Wood, Flowers, Bark, and Resin. The Resin segment held the largest market revenue share in 2024, driven by its higher oil content and premium fragrance profile. Resin-derived oils are widely used in luxury perfumes and traditional medicine, offering strong consumer appeal and higher margins for producers.

The Wood segment is expected to witness the fastest growth rate from 2025 to 2032, supported by sustainable plantation practices and rising adoption in aromatherapy and spa products. Wood-based oil provides consistent quality and is preferred in large-scale formulations where traceability and sustainable sourcing are critical.

• By Application

On the basis of application, the agarwood essential oil market is segmented into Food and Beverage Industry, Cosmetics and Personal Care Industry, and Pharmaceutical Industry. The Cosmetics and Personal Care Industry segment held the largest market revenue share in 2024, driven by increasing consumer interest in natural and luxury personal care products. Agarwood oil is widely incorporated in perfumes, skincare products, and wellness treatments for its aromatic and therapeutic benefits.

The Food and Beverage Industry segment is expected to witness the fastest growth rate from 2025 to 2032, fueled by the rising popularity of gourmet flavors, functional beverages, and plant-based wellness products. Agarwood oil is increasingly used in specialty teas, flavoring agents, and beverages for its exotic aroma and perceived health benefits.

• By Sales Channel

On the basis of sales channel, the agarwood essential oil market is segmented into Specialty Drug Stores, Supermarkets or Hypermarkets, E-commerce, and Convenience Stores. The E-commerce segment held the largest market revenue share in 2024, driven by global online accessibility, convenience, and growing awareness of authentic and luxury essential oils. Online platforms allow direct access to high-quality products from certified suppliers, enhancing market reach and brand visibility.

The Specialty Drug Stores segment is expected to witness the fastest growth rate from 2025 to 2032, fueled by increasing consumer preference for premium, curated wellness products and personalized shopping experiences. These stores provide expert guidance and authenticity verification, making them attractive for health-conscious and luxury buyers.

Agarwood Essential Oil Market Regional Analysis

•  Asia-Pacific dominated the agarwood essential oil market with the largest revenue share in 2024, driven by increasing consumer awareness of natural wellness products, the expanding perfumery and personal care industries, and the growing adoption of aromatherapy and luxury fragrances
•  The region’s consumers highly value the therapeutic, aromatic, and premium qualities of agarwood oil, leading to its use in personal care, cosmetics, and high-end perfumes
•  Strong cultivation practices, sustainable sourcing initiatives, and supportive government policies are further boosting adoption and establishing Asia-Pacific as a key hub for both production and consumption

China Agarwood Essential Oil Market Insight

The China agarwood essential oil market accounted for the largest revenue share in Asia-Pacific in 2024, attributed to the country’s well-established Aquilaria plantations, rising domestic demand for luxury fragrances and wellness products, and high technological adoption in extraction and processing methods. Consumers increasingly use agarwood oil in aromatherapy, personal care, and niche perfumery products. The push toward premium and sustainable ingredients, along with strong domestic manufacturers, are key factors propelling the market in China.

Japan Agarwood Essential Oil Market Insight

The Japan agarwood essential oil market is expected to witness the fastest growth rate from 2025 to 2032, driven by rising consumer interest in natural wellness, luxury perfumes, and sustainable products. High disposable incomes, strong e-commerce and specialty retail infrastructure, and an increasing preference for plant-based aromatherapy and personal care solutions are supporting market expansion. Moreover, Japan’s focus on high-quality, sustainably sourced agarwood oil is expected to further enhance adoption in both personal and commercial segments.

North America Agarwood Essential Oil Market Insight

North America is expected to witness the fastest growth rate from 2025 to 2032, driven by growing awareness of natural wellness products, luxury fragrances, and aromatherapy applications. Consumers in the region highly value high-quality, sustainably sourced agarwood oil for personal care, perfumery, and wellness applications. The widespread adoption is supported by strong retail and e-commerce infrastructure, high disposable incomes, and increasing demand for natural and plant-based ingredients, establishing North America as a key market for premium agarwood essential oils.

U.S. Agarwood Essential Oil Market Insight

The U.S. agarwood essential oil market is expected to witness the fastest growth rate from 2025 to 2032, fueled by rising consumer preference for luxury fragrances, aromatherapy, and personal care products. Consumers increasingly prioritize sustainably sourced and high-quality oils for wellness and niche perfumery purposes. Moreover, the growth of specialty retail, e-commerce platforms, and natural wellness trends is significantly contributing to market expansion.

Europe Agarwood Essential Oil Market Insight

The Europe agarwood essential oil market is expected to witness the fastest growth rate from 2025 to 2032, primarily driven by rising demand for premium and sustainable personal care, luxury perfumery, and aromatherapy products. Consumers are increasingly adopting plant-based, eco-friendly ingredients. Strong regulatory frameworks promoting sustainability, along with well-established retail and specialty distribution channels, are further driving market growth across the region.

Germany Agarwood Essential Oil Market Insight

The Germany agarwood essential oil market is expected to witness the fastest growth rate from 2025 to 2032, fueled by increasing consumer awareness of natural wellness and luxury perfumery products. Germany’s focus on high-quality, sustainably sourced essential oils, combined with a strong e-commerce and specialty store network, is encouraging adoption in personal care, aromatherapy, and niche fragrance applications. Government initiatives supporting sustainable sourcing practices are also contributing to market growth.

U.K. Agarwood Essential Oil Market Insight

The U.K. agarwood essential oil market is expected to witness the fastest growth rate from 2025 to 2032, driven by rising consumer preference for luxury fragrances, aromatherapy, and premium personal care products. Consumers increasingly value sustainably sourced, high-quality agarwood oil with therapeutic and wellness benefits. In addition, the U.K.’s strong retail and e-commerce channels, combined with growing awareness of natural and eco-friendly ingredients, are expected to further stimulate market growth across residential and commercial applications.

Agarwood Essential Oil Market Share

The Agarwood Essential Oil industry is primarily led by well-established companies, including:

• Oudh Al Anfar (U.K.)
• Agar Aura (U.S.)
• Agarwoods Malaysia Sdn Bhd (Malaysia)
• Dermanor (India)
• Al Haramain Perfumes (U.A.E.)
• Agarose Oil Co., Ltd. (China)
• Scented Treasures (U.S.)
• Forest Essentials Pvt Ltd (India)
• Aromaaz International (India)
• Agar Oil Enterprises (Indonesia)

Latest Developments in Global Agarwood Essential Oil Market

• In February 2021, Givaudan acquired Myrissi, marking a strategic expansion in its Fragrance & Beauty portfolio. The acquisition leverages Myrissi’s expertise in artificial intelligence to enhance Givaudan’s ability to recommend innovative organoleptic solutions to clients. This integration is expected to accelerate product development, improve customization for consumer preferences, and strengthen Givaudan’s competitive position in the global fragrance and beauty market. The move underscores the growing role of AI-driven innovation in shaping premium fragrance offerings and meeting evolving consumer demands.

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