The Vietnamese beauty industry presents significant opportunities for foreign companies wishing to tap into the growing demand for international beauty products.
“With a compound annual growth of 30% in the beauty product market, Vietnam has become a prospective hub for foreign companies, including those from the Republic of Korea and Japan. New players from Thailand and China are also rolling out their products to the local market,” said Nguyen Van Minh, vice chairman of the Vietnam Essential Oils, Aromatherapy, and Cosmetics Association (VEACA).
“It is good timing for foreign beauty companies for penetrate the Vietnamese market, as consumers are becoming more aware of and getting familiar with international brands,” Minh said, adding that last year, Vietnamese consumers spent US$6 billion on imported cosmetics and beauty products, triple the figure of 2016.
According to a report by The Nielsen Vietnam, Vietnam’s market is an emerging opportunity for the beauty industry, driven by a few key trends. Specifically, modern trade is growing rapidly in Vietnam and is more likely to welcome international and regional brands in its network. Key chain stores selling beauty products, such as Medicare, Guardian, and Pharmacity, have been expanding quickly in 2017.
Moreover, Vietnam’s middle-class population is going to reach 33 million by 2020. Currently, 30% of the population is made up of millennials, who are generally better educated on beauty regimes and more likely to look out for healthier and higher quality brands. The willingness to try new products in Vietnam is much higher than in Thailand, Indonesia, the Philippines, and other countries in Southeast Asia.
“There is now a growing trend towards organic and premium products. Vietnamese consumers are ready for more international brands that make use of new, innovative technology,” read the report.
Medicare, Vietnam’s leading health, beauty, and well-being retailer, has benefited from the rapidly growing beauty market. Bart Verheyen, commercial director of Medicare, said that the official number of 30% growth in the domestic consumption is quite conservative. Medicare has seen faster growth than the market average for the past few years.
Since its establishment in 2001, Medicare has established a network of 70 stores nationwide. It has a plan to reach 100 stores by the year’s end.
“Medicare covers a whole range of items including food supplements, pharmaceutical goods, skin and personal care products, and cosmetics, with over 6,000 stock-keeping units. We are constantly looking for distributors and partners to expand our product offerings and introduce new beauty brands to local consumers,” Verheyen added.
On the same note, Dominic Oh, general director of the Korea International Exhibition Centre, said Vietnam was ranked first on the list for the Republic of Korea’s beauty companies to present their products and services. Many South Korean brands are looking to expand their operations in Vietnam, seeing the fresh demand among young Vietnamese consumers.
“In 2017, around 100 South Korean companies visited Vietnam to explore the market. This year, a delegation of 150 South Korean companies will continue to showcase 400 beauty brands in the Mekong Beauty Show in Ho Chi Minh City on June 14-16,” he said.
According to the organizer, the Mekong Beauty Show will pave the way for foreign firms to enter the local market. Aside from South Korean beauty firms, the expo will also host international brands from Italy, Russia, Japan, Taiwan (China), Thailand, and China. More than 150 buyers from Vietnam, Cambodia, Laos, and Myanmar will be visiting the show to source products and seek new partnerships.