Việt Nam's Health & Beauty Market Boasts Excellent Growth
The personal care sector has enjoyed strong growth of 7 per cent a year on average, higher than the fast moving consumers goods (FMCG) market, thanks to the skincare and make-up segment.
Rapid economic growth and higher living standards are shaping changes in Vietnamese lifestyles and needs.
Urbanites now spend not only on basic products but also on aspirational demands.
Besides being able to afford advanced beauty products, Vietnamese women are not hesitant about paying more for premium products that are capable of bringing about significant skin improvements.
The cosmetic market has been offering a wide range of beauty products, welcoming new brands, new variants, and new formats every day, which effectively stimulates consumer spending.
Also, the current digital world has opened a new door for new players entering the market.
Health and beauty stores, including cosmetic stores and pharmacies, continue growing in importance thanks to the entry of new players like Pharmacity, Watsons and Hello Beauty.
Easy access to the internet, especially via mobile phones, enables Vietnamese consumers to keep abreast of beauty trends faster, research product information more easily and shop conveniently online.
Noticeably, 80 per cent of incremental spending on beauty products comes from online shopping.
Potential for Growth
Việt Nam fully opened its retail market to foreign companies in 2009, three years after joining the World Trade Organization.
Its growing ranks of millennials and rising incomes have convinced foreign retailers including cosmetics distributors that it is time for them to foray into the market.
It is estimated that around 90 per cent of cosmetics firms in Việt Nam are distribution agents for foreign brands.
According to experts, there is enormous room for growth in many beauty categories, which are still underdeveloped.
Two out of five Vietnamese households have never bought beauty products. But following the global beauty trend, Vietnamese are more willing to stretch their budget for advanced beauty solutions such as skincare devices and beauty supplements.
The rising need for self-indulgence has led to a great opportunity for beauty care beyond facial care. Professional hair care products, hand and body care, nail styling are all emerging, and have great potential to attract spending in the years to come.
Trần Quang Thắng, director of the HCM City Institute of Economics and Management, said, “The middle class, who spend a lot on cosmetics, is set to grow to 33 million by 2020.”
Nguyễn Văn Minh, deputy chairman of the Việt Nam Association of Essential Oils, Aromatherapy and Cosmetics, said many famous foreign cosmetic brands had entered by opening representative offices, companies and factories and through agents and distributors, including high-end brands like Esteé Lauder, Lancome, Shiseido, Fendi, Clairins, and L'Oreal.