This paper firstly introduced domestic and foreign supply of products processed by aromatherapy plant. On the basis of predicting market demand of aromatherapy plant, it analyzed current development situation of the plant in Yunnan Province. It arrived at the conclusion that the industry has broad market prospect. Then, it analyzed competitive advantages and risk factors of aromatherapy plant in Yunnan Province. There are climate, location and price advantages, but due to lack of product standard, it is difficult to guarantee quality, and there are certain market risks. Finally, it put forward recommendations for development of aromatherapy industry: (1) taking full advantage of preferential policies to set up leading enterprises and realize radiated development; (2) bringing into play of resource advantages and introducing capitals and technologies; (3) Fostering market and driving the industrial development.