Agarwood Chip Market

Agarwood Chip Market Outlook (2024 to 2034)

Fact.MR, in its newly published study, says that the global agarwood chip market is pegged at US$ 7,046.1 million in 2024. The global market is forecast to increase at a 7.6% CAGR and reach a market value of US$ 16,562.1 million by the end of 2034.

The agarwood chip market size is expected to experience growth opportunities in emerging economies, attributed to e-commerce platforms and online sales, which have significantly impacted the agarwood market by providing easier access to agarwood products for consumers worldwide. The trend has the potential to expand market reach, connect producers with a global audience, and drive sales.

E-commerce platforms break down geographical barriers, allowing consumers from different parts of the world to access agarwood products. The increased accessibility expands the market reach beyond traditional retail channels, enabling producers to tap into a global customer base.

E-commerce platforms provide a versatile and dynamic marketplace where a variety of agarwood products, including essential oils, incense, chips, and finished goods, can be showcased. Consumers have the flexibility to explore different types and grades of agarwood, fostering a diverse product offering that caters to varying preferences and budgets.

Agarwood producers can leverage e-commerce to engage in direct-to-consumer sales, eliminating the need for intermediaries. The direct approach allows producers to establish a closer relationship with their customers, gather feedback, and adapt their offerings based on market demands. It also provides an opportunity to communicate the unique qualities of their products directly to the consumer.

Report Attributes	Details
Agarwood Chip Market Size (2024E)	US$ 7,946.1 million
Forecasted Market Value (2034F)	US$ 16,562.1 million
Global Market Growth Rate (2024 to 2034)	7.6% CAGR
North America Market Share (2034F)	18.3%
Demand Growth in Japan (2024 to 2034)	8.5% CAGR
China Market Value (2034F)	US$ 3,001.8 million
Demand for Conventional (2034F)	US$ 11,832.0 million
Revenue Share of Incense Sticks Segment (2034F)	42.7%
Key Companies Profiled	Grandawood Agarwood Australia Binh Nghia Agarwood Co., Ltd Hoang Giang Agarwood Ltd. Aalam Ul Oud KAB Industries Duy Hai AGARWOOD. Thien Phu agarwood Co.,Ltd Asia Plantation Capital Pte Ltd. Ori Oud Asia ASSAM AROMAS Sadaharitha Plantations Limited

Which Market Trends are Opening New Opportunities for Manufacturers?

“Increasing Demand for Agarwood Products to Fuel the Market Growth”

The increasing demand for agarwood products can be attributed to several factors that have contributed to its rising popularity in various industries. Agarwood, also known as oud or aloeswood, is derived from the Aquilaria tree when it undergoes a specific type of fungal infection.

The resinous heartwood formed as a result of this infection is highly valued for its distinctive fragrance and is a crucial component in the production of various high-value products, including perfumes, incense, and traditional medicines.

Agarwood is renowned for its unique and complex fragrance profile. The scent is often described as rich, deep, and woody, with hints of sweetness, earthiness, and sometimes a touch of spiciness. The distinctive aroma makes it a sought-after ingredient in the fragrance industry, particularly in the production of high-end perfumes and colognes.

Agarwood has a long history of cultural and religious significance in various regions, including the Middle East, Southeast Asia, and parts of South Asia. It is often used in religious ceremonies, cultural rituals, and traditional medicinal practices. The deep-rooted cultural connections contribute to the sustained demand for agarwood products.

“Culture and Religious Significance to Accelerate the Growth Prospects”

Agarwood has a long history of use in traditional medicine systems, such as Ayurveda in India, Traditional Chinese Medicine, and traditional healing practices in Southeast Asia. The resin and oil extracted from agarwood are believed to possess medicinal properties. It is used to treat various ailments, including digestive issues, respiratory problems, and skin conditions. The incorporation of agarwood in traditional medicine reflects a holistic approach to health and well-being deeply ingrained in these cultures.

Agarwood is often an integral part of cultural practices and festivals in many Asian societies. Its use can range from crafting traditional artifacts and carvings to incorporating it into cultural performances. The aroma of agarwood is associated with auspiciousness and is believed to enhance the overall experience of cultural events and celebrations. The cultural significance of agarwood is often passed down through generations, contributing to its sustained demand.

Agarwood holds symbolic value in various cultural and religious contexts. In some traditions, it is seen as a symbol of prosperity, luck, and divine blessings. The resinous heartwood, formed through the natural process of infection, is considered a transformative element, symbolizing the beauty that can arise from adversity. The spiritual symbolism associated with agarwood enhances its appeal in religious and cultural practices.

“Growing Awareness of Health Benefits to Contribute Significantly”

Agarwood is valued in aromatherapy for its unique and calming fragrance. The aromatic compounds present in agarwood are believed to have stress-relieving properties, making it a popular choice for individuals seeking natural remedies for relaxation and mental well-being. The demand for natural stress relief solutions, including agarwood-based products, has increased as stress-related health issues become more prevalent.

In traditional medicine, agarwood is believed to possess anti-inflammatory and analgesic properties. The properties make agarwood a potential candidate for addressing issues such as pain management and inflammatory conditions. Consumers are exploring agarwood as part of their holistic approach to health as awareness of natural alternatives to conventional medications grows.

Some traditional medicinal practices attribute anti-asthmatic properties to agarwood. Inhalation of agarwood smoke or the use of agarwood oil is believed to have positive effects on respiratory health. The perception has led to an increased interest in agarwood-based products among individuals looking for natural remedies to support respiratory well-being.

Which Factor is Restraining the Demand for Agarwood Chip?

“Illegal Logging and Poaching to Restrain the Market Growth”

Illegal logging and poaching pose serious threats to agarwood-producing trees, particularly those belonging to endangered species within the Aquilaria genus. The illicit activity not only jeopardizes the biodiversity of these valuable trees but also undermines legal and sustainable agarwood production.

Several species within the Aquilaria genus, such as Aquilaria malaccensis, are listed as endangered due to overharvesting and habitat destruction. Illegal logging exacerbates this endangerment by targeting these specific species for their high-value agarwood. The loss of these trees not only threatens their survival but also disrupts ecosystems where they play a crucial role.

Illegal logging often targets specific trees with desirable agarwood-producing characteristics, leading to a reduction in the genetic diversity of the Aquilaria species, which can make these species more susceptible to diseases, pests, and environmental changes, further compromising their ability to survive and reproduce.

Illegal logging undermines conservation efforts aimed at protecting and preserving endangered agarwood species. Governments and conservation organizations invest significant resources in initiatives to safeguard these trees and their habitats. Illegal activities, driven by the lucrative market for agarwood, counteract these efforts, making it challenging to ensure the long-term sustainability of agarwood-producing ecosystems.

What Strategy Should Start-ups Incorporate to Enhance Their Market Presence?

“Technological Advancements in Agarwood Cultivation is Key to Gaining Competitive Edge”

Technological advancements in agarwood cultivation, particularly in the area of inoculation methods, play a crucial role in increasing both the yield and quality of agarwood. The advancements contribute significantly to agarwood chip market growth by addressing challenges related to the natural formation of agarwood and opening up new opportunities for sustainable production.

Traditionally, agarwood is formed as a response to a fungal infection in the heartwood of Aquilaria trees. The natural formation process is unpredictable and time-consuming. Technological advancements have led to the development of controlled inoculation methods, where specific fungi or compounds are introduced to the trees to induce agarwood formation. The methods allow for more reliable and efficient production of agarwood, contributing to increased yield and improved quality.

Controlled inoculation techniques enable producers to manage the agarwood formation process, resulting in a higher yield of resinous heartwood. The ability to regulate the process allows for the production of agarwood with consistent quality in terms of fragrance profile and resin content. Predictability is essential for meeting the demand for high-quality agarwood in various industries, including perfumery and traditional medicine.

Country-wise Insights

Fact.MR, a market research and competitive intelligence provider, asserts in its newly published study that North America is predicted to hold an 18.3% share of the global market by 2034.

Expanding the presence of agarwood chips on various e-commerce platforms and leveraging digital marketing strategies can help reach a broader audience and facilitate direct-to-consumer sales.

What is the Scenario of the Market in the United States?

“Rising Interest in Aromatherapy to Augment the Growth”

Attribute	United States
Market Value (2024E)	US$ 1,086.2 million
Growth Rate (2024 to 2034)	6.9% CAGR
Projected Value (2034F)	US$ 2,111.8 million

The United States is predicted to account for 69.6% of the North American market by 2034. The increasing awareness of aromatherapy and holistic wellness practices in the United States contributes to the agarwood chip market share, which is often used in aromatherapy products.

Agarwood is perceived as a luxury and exotic fragrance material. The market in the country, with its affinity for premium and niche products, may see increased demand for agarwood chips in high-end fragrances and incense.

The multicultural landscape in the United States, along with the popularity of various spiritual practices, may drive the demand for agarwood chips used in cultural and religious ceremonies.

What is Projected to Propel Demand for Agarwood Chip in China?

“Traditional Chinese Medicine in China to Fuel the Demand”

Attribute	China
Market Value (2024E)	US$ 1,458.7 million
Growth Rate (2024 to 2034)	7.5% CAGR
Projected Value (2034F)	US$ 3,001.8 million

China is forecast to hold a 72.2% share of East Asia market revenue by 2034. Agarwood is valued in traditional Chinese medicine for its perceived health benefits. The use of agarwood chips in TCM formulations can contribute to the growth of the market.

Agarwood plantations and processing facilities offering tourism and cultural experiences may attract both domestic and international tourists, creating additional revenue streams.

The widespread adoption of e-commerce platforms in China provides an efficient channel for the distribution and sale of agarwood products, reaching a vast consumer base.

What is projected to Propel Demand for Agarwood Chip in Japan?

“Tea Ceremony Culture to Enhance Market Prospects”

Attribute	Japan
Market Value (2024E)	US$ 357.2 million
Growth Rate (2024 to 2034)	8.5% CAGR
Projected Value (2034F)	US$ 808.6 million

Japan is anticipated to hold a 19.5% share of East Asia market revenue by 2034. Agarwood chips are sometimes used in the Japanese tea ceremony to enhance the sensory experience. The association with traditional tea ceremonies can drive the demand for agarwood in Japan.

The growing awareness of wellness and holistic health practices may lead to an increased demand for agarwood chips, valued for their potential calming and therapeutic effects. The Japanese appreciation for craftsmanship and artisanal products may create opportunities for agarwood chips, especially in unique and handcrafted items.

Category-wise Insights

Based on nature, the global agarwood chip market share is projected to rise significantly in the conventional segment. Conventional cultivation and processing methods may be perceived as preserving distinctive flavor and aroma profiles in agarwood chips, attracting consumers who appreciate these characteristics.

Which Nature to Contribute Significantly in the Sales of Agarwood Chip?

“Conventional Segment is expected to Accelerate the Demand for Agarwood Chip”

Attribute	Conventional
Segment Value (2024E)	US$ 5,898.0 million
Growth Rate (2024 to 2034)	7.2% CAGR
Projected Value (2034F)	US$ 11,832.0 million

The conventional segment of agarwood chips is forecast to hold 71.4% of the market share by 2034. This may be preferred for their adherence to traditional cultivation and processing methods, aligning with cultural practices and religious ceremonies that have historical significance.

Some consumers may prefer products labeled as conventional due to a perception of authenticity and a belief that traditional methods result in higher-quality agarwood chips. Conventional methods often have established practices and a history of stability, which can lead to a perception of reliability in the supply chain, which may be attractive to both producers and consumers.

Conventional methods may be associated with a heritage of craftsmanship in agarwood cultivation and processing. Conventional agarwood cultivation practices may receive support and endorsement from cultural and religious institutions, contributing to their acceptance and demand in the agarwood chip market.

Which End Use of Agarwood Chip is Set to Occupy a Leading Market Share?

“Incense Sticks Segment is Expected to be the Dominant End Use”

Attribute	Incense Sticks
Segment Value (2024E)	US$ 3,567.0 million
Growth Rate (2024 to 2034)	7.1% CAGR
Projected Value (2034F)	US$ 7,082.0 million

The incense sticks segment is predicted to occupy a 42.7% share of the global market by 2034. Agarwood is renowned for its distinct and aromatic properties. The rich and unique fragrance of agarwood chips is highly valued in the production of incense sticks, contributing to the popularity of these products.

Agarwood is often associated with therapeutic and meditative properties. The use of agarwood chips in incense sticks can be linked to practices such as aromatherapy, where the aroma is believed to have calming and soothing effects.

The global interest in aromatherapy and holistic wellness has been on the rise. Agarwood-infused incense sticks are sought after for their potential to create a tranquil environment, contributing to the growth of this segment.

Agarwood is considered a luxury ingredient, and incense sticks made from agarwood chips are often positioned as premium products. The appeal of luxury items and unique fragrances can drive demand in upscale markets.

Competitive Landscape

Key players in the agarwood chip industry are employing diverse strategies to achieve their goals. The approaches encompass the promotion of innovation, the implementation of stringent quality control measures for their products, the establishment of strategic partnerships, the optimization of supply chain management systems, and the ongoing enhancement of their products and technologies.

Company Portfolio :

• Asia Plantation Capital: Asia Plantation Capital is known for its sustainable agarwood cultivation practices. The company offers agarwood chips as part of its product line.
• Agarvina Co., Ltd.: Agarvina is a Vietnamese company involved in agarwood products, including chips. The companies offer a range of agarwood chip varieties.

Grandawood Agarwood Australia, Binh Nghia Agarwood Co., Ltd, Hoang Giang Agarwood Ltd., Aalam Ul Oud, KAB Industries, Duy Hai AGARWOOD, Thien Phu agarwood Co.,Ltd, Asia Plantation Capital Pte Ltd., Ori Oud Asia, ASSAM AROMAS, and Sadaharitha Plantations Limited, are key players in the market.

Segmentation of Agarwood Chip Market Research

• By Nature :

  • Organic
  • Conventional

• By End Use :

  • Incense Sticks
  • Fragrances
  • Retail/Household

• By Region :

  • North America
  • Europe
  • East Asia
  • Latin America
  • Middle East & Africa
  • South Asia & Oceania