Huge market potential, fast growth, low share of domestic brands
According to Statista data, the Vietnamese cosmetics market ranks sixth in the ASEAN region in terms of revenue. Its turnover is estimated at $341 million this year. USD and USD 102 million in the skin care segment. Beauty sector dollars. Over the next 5 years, 2019-2023, these two segments are expected to grow at an annual rate of 2.9% and 6.1%, respectively; the color cosmetics segment is expected to be the fastest growing segment in the region.
The main drivers of this market are rapid economic growth and the emergence of the middle class (people with a purchasing power parity of at least $15 per day). According to the World Bank, this class will double to approximately 31.2 million people by 2026, which could mean continued market growth.
There are several Vietnamese manufacturer brands on the brand map. The most popular are Saigon Cosmetic, Thorakao and Lan Hao, often known for catering to the lower end of the market. Now more and more cosmetics are being imported into Vietnam. South Korea (22%), Japan (13%), France (12%), Thailand (12%), and the United States (12%) are the top five major importers. Especially in Vietnam because of their good quality and affordable price. In the impression of Vietnamese people, Korean products are trendy and have heavy makeup, while Japanese products are famous for skin care.
LG VINA Cosmetics can be considered the most famous Korean manufacturer in Vietnam, offering a wide range of skincare and makeup products. It has many brands, such as OHUI, Lacvert Essance… Also, there are diversified Korean brands distributed in Vietnam that are well known among many Vietnamese, especially young people. Some telling examples are Innisfree, Nature Republic, Missha, Laneige, The Face Shop…
As for Japanese brands, currently only 03 such as Rohto Mentholatum, Kao, and Shiseido have factories in Vietnam. Some popular Japanese brands that are not made in Vietnam are Menard, SK-II (P&G) (high end market), DHC, Kose, Shu Uemura (mid end market).
A simple makeup bag, Vietnamese now prefer natural products
In 2019, B&Company conducted a survey on Vietnamese women’s use of cosmetics. The results showed that facial cleanser is a must-have for skin care and lip balm is a must-have for makeup. In fact, more than 90% of the women surveyed use both products. On the other hand, all other cosmetic or skin care products are primarily used by about two-thirds of women. From this, it can be seen that the makeup bags of Vietnamese people are relatively simple; even many people do not have all the products for basic makeup and skin care routine.
The top three most commonly used skin care products are cleanser (94%), sunscreen (70%), facial mask (68%), and skin care cleanser (68%); lipstick (98%) and foundation (88%) for makeup %) and eyebrows (71%).
Cosmetics most commonly used by Vietnamese women (%)
The current trend is the increasing attention and use of natural cosmetics and skin care products. These are defined as products whose ingredients are derived from flavors, vitamins and mineral nutrients available in nature, with little or no use of additives or chemicals. According to the B&Company survey mentioned above, 66.6% of women use natural makeup products, 9.6% do not use them, and 23.8% do not know whether the products they are currently using are natural or not. 73.2% of women use skin care products, 7.8% don’t use them, and 19.0% don’t know. It can be said that there is still a certain number of Vietnamese who do not understand the concept of nature.
However, natural products still have dissatisfaction for consumers, among which the top 03 are “short shelf life”, “high price” and “difficult to store”.
Dissatisfaction with using natural cosmetics (%)
Overall, the young and dynamic Vietnamese cosmetics market in the developing stage can open up many promising business opportunities, especially considering that consumers are now light-hearted about cosmetics and are interested in natural products.
Reference:
- WorldBank Official Website, Vietnam Overview; https://www.worldbank.org/en/country/vietnam/overview#1
- JETRO research 2017, ベトナムにおける化粧品・パーソナルケア商品市場調査, https://www.jetro.go.jp/ext_images/_Reports/02/2017/775d117a65548838/rpvn201701.pdf
- B&Company online survey, Survey on actual cosmetic usage of Vietnam women, conducted in 2019 with sample N = 332 women in Hanoi, HCM and other cities
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