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The sandalwood oil market size is projected to increase by USD 505.75 million, at a Compound Annual Growth Rate (CAGR) of 6.49% between 2023 and 2028. The APAC market is poised for a steady growth rate, fueled by the increasing utilization of sandalwood oil in pharmaceuticals, cosmetics, furniture, and aromatherapy in China and India. As the primary producer, the region, including India, Australia, China, and Indonesia, is a significant consumer. Favorable economic conditions are expected to contribute to the market's expansion, with key emerging economies such as China, India, and Indonesia propelling rapid growth. The versatile applications, coupled with robust demand from major economies, align with global trends, reinforcing positive sandalwood oil market forecast for the APAC market.
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The market thrives in personal care & cosmetics, valued for its antifungal, antibacterial, anti-inflammatory, and antiviral properties. Known for its woody aroma and olfactory pleasure, sandalwood oil finds diverse applications in medicinal blends and traditional medicine due to its health advantages and antibacterial characteristics. In the realm of beauty and skin care, organic essential oils like sandalwood oil are prized for their ability to soothe and heal, flavors and fragrances making them popular choices in creams and fragrant essential oils. As urbanization accelerates, demand for organic essential oils such as sandalwood oil rises, driven by their appeal in both therapeutic and cosmetic sectors. Despite concerns over adverse effects and chemical composition, sustainable practices ensure the continued availability of this prized oil derived from Santalum album roots and wood.
The growth of the organized retail sector is the key factor driving market development. Hypermarkets and supermarkets are two of the major offline distribution channels. Organized retailing is an integral part of these offline distribution channels, which facilitates the purchasing process for consumers and enables them to choose from a diverse range of sandalwood oil. Tesco Plc (Tesco), Target Brands Inc. (Target), and ALDI Inc. (ALDI) are some of the major hypermarkets and supermarkets that offer a variety of sandalwood oils.
Moreover, an increase in the number of organized retailers offering shelf space for private-label sandalwood oil is one of the major factors that are expected to drive the growth of the market. Target, a multinational grocery and general merchandise retailer, offers sandalwood oils and sandal oil-based products, such as Essential Oil Atmosphere Blend - Sandalwood and Neroli, which are important essential oils. In addition, a significant expansion in the number of retail stores offering sandalwood oils, as well as geranium oil and other essential oils, will drive the growth of the market during the forecast period.
Rising sandalwood oil market demand for aromatherapy is the primary trend shaping market growth. Several holistic beauty experts endorse the therapeutic effects of sandalwood oil on the skin. It is suitable for all skin types and is one of the most popular essential oils used in aromatherapy. Additionally, some of the health benefits of aromatherapy include its ability to reduce depression and anxiety. It boosts energy levels, enhances cognitive performance, eliminates headaches, and speeds up the healing process.
In addition, aligning with market trends and analysis, ginger oil induces sleep, strengthens the immune system, reduces pain, improves digestion, and increases blood circulation. India, China, Japan, France, the UK, and the US are some of the major countries that have popularized aromatherapy. Increasing demand for aromatherapy owing to its health benefits, including the use of ginger oil, is likely to further increase the growth of the market during the forecast period.
The high price of sandalwood is a challenge that affects market development. Sandalwood products are exorbitantly priced because of the significant decrease in the production of sandalwood in the past two decades. It is one of the most expensive essential oils and involves a complex production process. Mature sandalwood trees are cut down to extract oil. In 2020, the average price of sandalwood oil rose to more than USD 2,000 per kg, and it is expected to continue in the same range in the forthcoming years. Compared with other sandalwood oils, oil extracted from Indian sandalwood trees is of a higher quality.
Additionally, most of the high-quality sandalwood is harvested in the southern parts of India (Mysore in Karnataka and the Marayoor forests in Kerala). Over-cultivation and the threat of total extinction have led to the implementation of regulations on the production in India. These factors have increased the price in global trade, which is expected to impede the expansion of the market during the forecast period.
The market research and growth report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
Natural sandalwood oil is made naturally from sandalwood trees. Sandalwood oil is an essential oil produced by steam distillation from chips and billets harvested from the heartwood of various sandalwood tree species, primarily the Indian sandalwood album and Australian sandalwood spectrum. Sandalwood is used as a fragrance. Further, compared with lab-created oil or fragrances ingredients market, a natural fragrance by natural oil fades quickly. Furthermore, the manufacturing process of natural oil is difficult and must follow procedures per ISO 9235. The process of harvesting oils from trees and plants leads to deforestation in the world. It is difficult to recreate the same fragrance if something affects the natural source, like a heatwave or pesticides. Hence, this natural product segment in the market will witness a slight decline in market expansion during the forecast period.
The market share growth by the Indian sandalwood oil segment will be significant during the forecast period. Indian sandalwood essential oil has been traditionally used by aromatherapists. However, this variety of sandalwood trees is on the verge of extinction. Indian sandalwood trees are primarily grown in Mysore (Karnataka, India) and are used for producing essential oils. The personal care sector is a key end-user of Indian sandalwood oil. It is used in soaps, scents, and agarbattis (incense sticks).
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Moreover, Indian sandalwood is extensively used in making ayurvedic medicines for treating different health issues and ailments, such as somatic and mental disorders. Additionally, Indian sandalwood oil is also used for manufacturing cosmetic and personal care products as it offers a fresh and long-lasting aroma. Thus, such factors are expected to fuel the growth of Indian sandalwood during the forecast period.
APAC is estimated to contribute 63% to the growth of the global market during the forecast period
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Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. The APAC market is expected to witness steady growth owing to the increasing application in pharmaceuticals, cosmetics, furniture, and aromatherapy across China and India. APAC is the leading producer and accounts with India, Australia, China, and Indonesia are the leading consumers of sandalwood oil in APAC. Favorable economic conditions are expected to contribute to the growth of the APAC market. China, India, and Indonesia are the key emerging economies that will propel the rapid growth of the market. Hence, such factors are expected to drive market growth in this region during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market forecasting growth and analysis.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Aditi Essentials, Blossom Kochhar Beauty Products Pvt. Ltd., CLIARA ESSENTIAL OILS, doTERRA International LLC, Eden Botanicals, Essential Oils Co, Essentially Australia, Givaudan SA, Kanta Enterprises Pvt. Ltd., Karnataka Soaps and Detergents Ltd., Katyani Exports, Khadi Natural, MEENA PERFUMERY, PerfumersWorld Ltd., Plant Therapy Inc., Quintis Pty Ltd., Santanol Group, and Vedic Vaani
The market analysis and report of 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 market 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.
The market is diverse, spanning personal care like body washes, face washes, lotions, and creams, geranium oil due to its skin benefits and natural antibacterial properties. It is integral to natural aromatic products and fragrance goods, offering an exotic aroma sought after in premium spa products and boutique cosmetics. Used in spiritual and cultural practices, sandalwood oil aids in meditation and calming emotions, reflecting its spiritual significance. Despite competition from synthetic alternatives, its authenticity and minimal environmental impact appeal to conscious consumers. From medicinal formulations to food grade edible oil, it addresses health concerns like skin ageing, skin infections, and stress relief. As urbanization grows, demand rises for this preservative in fragrance and household items, maintaining its allure in perfumery and aromatherapy for its woodsy scent and holistic benefits.
In addition, the market is thriving amidst rapid urbanization and increasing awareness of fragrant essential oils' benefits. Sandalwood oil, known for its anti-inflammatory properties, is in demand across various industries due to its natural ability to soothe and heal. Its unique fragrance makes it a preferred choice in perfumery and aromatherapy, blending aromatic odours seamlessly. As consumers seek alternatives to chemicals, sandalwood oil stands out for its natural composition and therapeutic qualities. The market's growth is driven by its versatile applications in skincare, cosmetics, and pharmaceuticals, catering to a discerning consumer base focused on wellness and sustainability.
Market Scope |
|
Report Coverage |
Details |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.49% |
Market Growth 2024-2028 |
USD 505.75 million |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.54 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 63% |
Key countries |
US, China, India, Australia, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aditi Essentials, Avi Naturals, BASF SE, Blossom Kochhar Beauty Products Pvt. Ltd., CLIARA ESSENTIAL OILS, doTERRA International LLC, Eden Botanicals, Essential Oils Co, Essentially Australia, Givaudan SA, Kanta Enterprises Pvt. Ltd., Karnataka Soaps and Detergents Ltd., Katyani Exports, Khadi Natural, MEENA PERFUMERY, PerfumersWorld Ltd., Plant Therapy Inc., Quintis Pty Ltd., Santanol Group, and Vedic Vaani |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the market forecast period. |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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