Sandalwood Oil Market to Grow with a CAGR of 11.65% through 2029

Global Sandalwood Oil Market continues to thrive due to factors such as increasing demand in fragrance and cosmetics, its versatile applications in medicine and wellness.

According to TechSci Research report, “Sandalwood Oil Market - Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2029F”, the Global Sandalwood Oil Market stood at USD 91.1 million in 2023 and is anticipated to grow with a CAGR of 11.65% in the forecast period. The global sandalwood oil market has experienced steady expansion, propelled by the growing consumer preference for natural and premium personal care products, essential oils, and fragrances. Extracted from the heartwood of sandalwood trees, particularly Santalum album and Santalum spicatum, sandalwood oil is renowned for its rich, woody aroma and diverse therapeutic benefits. It is extensively utilized across the cosmetics, personal care, aromatherapy, and pharmaceutical sectors. The increasing inclination towards organic and natural products, alongside heightened awareness of sandalwood oil’s multifaceted applications, has significantly contributed to the market's growth worldwide.

A major driver of the sandalwood oil market is its widespread application in the cosmetics and personal care industry. Known for its anti-inflammatory, antimicrobial, and antioxidant properties, sandalwood oil is a highly sought-after ingredient in skincare formulations. It is commonly incorporated into moisturizers, creams, lotions, and serums to soothe irritated skin, reduce blemishes, and enhance skin tone. As consumers increasingly prioritize natural ingredients in their skincare routines, the demand for sandalwood oil has surged, particularly within premium product lines. Additionally, its anti-aging attributes have further boosted its appeal in anti-wrinkle and rejuvenating products.

The aromatherapy sector also plays a pivotal role in driving the sandalwood oil market. Aromatherapy, which leverages essential oils to promote relaxation, well-being, and healing, has gained substantial traction as part of the broader wellness trend. Sandalwood oil, valued for its calming and grounding fragrance, is a staple in aromatherapy. It is frequently used to alleviate stress, reduce anxiety, and enhance mental clarity, making it a preferred choice among practitioners and consumers. The rising awareness of mental health and self-care, coupled with a growing preference for natural and holistic treatments, has significantly bolstered the demand for sandalwood oil in aromatherapy.

Despite the robust demand, the sandalwood oil market faces several challenges. A primary issue is the limited availability of sandalwood trees and the extended maturation period required to harvest high-quality oil. Sandalwood trees take decades to mature, necessitating sustainable sourcing practices. Deforestation, illegal logging, and overharvesting have adversely affected sandalwood availability, particularly in India, leading to increased prices and supply chain pressures. In response, many companies are investing in sustainable sandalwood plantations and ethical sourcing practices to ensure a reliable supply of oil while mitigating environmental impact.

Another challenge is the emergence of synthetic alternatives. As natural sandalwood oil becomes more costly and difficult to source, some manufacturers have turned to synthetic substitutes that mimic the scent and properties of genuine oil. Although these alternatives provide a cost-effective solution, they do not offer the same therapeutic benefits as authentic sandalwood oil, potentially limiting their appeal among consumers who prioritize natural and organic products.

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The global sandalwood oil market is segmented into type, end-use, distribution channel, and region.

Based on end-use, the personal care segment emerged as the fastest-growing segment in the global sandalwood oil market, driven by increasing consumer preference for natural and organic beauty products. Sandalwood oil, known for its soothing, anti-inflammatory, and anti-aging properties, has become a key ingredient in skincare, haircare, and cosmetics formulations. Its ability to moisturize, reduce acne, and promote healthy skin makes it particularly popular in premium personal care products, such as moisturizers, facial serums, and anti-aging creams. Additionally, sandalwood oil’s natural, long-lasting fragrance has made it a preferred choice for perfumes, deodorants, and body lotions. With rising consumer awareness about the harmful effects of synthetic chemicals, there is a growing shift toward plant-based, sustainable ingredients. This trend is further accelerated by the clean beauty movement, where consumers prioritize transparency and eco-friendly formulations, fueling the demand for sandalwood oil in the personal care industry.

Major companies operating in global sandalwood oil market are:

• Eden Botanicals, LLC
• Blossom Kochhar Beauty Products Pvt. Ltd.
• Khadi Natural
• Mercer International Inc. (Santanol)
• H-Mark Trading (Pvt) Ltd. (Cliara Essential Oils)
• BASF SE
• PerfumersWorld Ltd.
• Quintis (Australia) Pty Ltd.
• Plant Therapy, Inc.
• Kanta Enterprises Private Limited

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“The sandalwood oil market is witnessing significant growth, fueled by rising demand for natural ingredients in aromatherapy, skincare, and fragrance products. Valued for its calming aroma and therapeutic properties, sandalwood oil is extensively used in both traditional medicine and contemporary personal care formulations. As consumer awareness of its benefits increases, there is a marked shift towards sustainably sourced and ethically produced sandalwood oil. Nevertheless, challenges such as deforestation and illegal logging threaten the market's sustainability. To address these issues, companies are investing in research and development to advance sustainable cultivation practices, thereby ensuring the long-term viability and environmental responsibility of the sandalwood oil market”, said Mr. Karan Chechi, Research Director of TechSci Research, a research-based management consulting firm.

“Sandalwood Oil Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (East Indian Sandalwood Oil, Australian Sandalwood Oil, Others), By End-Use (Cosmetics, Personal Care, Pharmaceuticals, and Others), By Distribution Channel (Online and Offline), By Region & Competition, 2019-2029F", has evaluated the future growth potential of global sandalwood oil market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the global sandalwood oil market.

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