THE STEPS OF COSMETIC BUSINESSES IN VIETNAM BEFORE THE ‘ONCE IN A THOUSAND YEARS’ OPPORTUNITY
Recently, the number of Vietnamese brands participating in the market has been increasing day by day and gradually asserting their position in the domestic market.
With diverse products, attractive packaging, affordable prices, and emphasis on product quality research along with appropriate communication strategies.
The advantage of local raw materials and low cost.
According to the Traditional Medicine Management Department, annually, the total amount of medicinal materials used in the Vietnamese medical industry is estimated at about 100,000 tons, with a total market value of over 400 million USD per year.
According to statistics from the Ministry of Agriculture and Rural Development, Vietnam has more than 10,000 plant species, including about 1,000 species that can be used in cosmetics.
According to information from Tuoi Tre newspaper, establishing production lines directly in Vietnam also brings significant price competitiveness advantages for international brands, due to the significant difference between value-added tax (about 10%) and import duties for cosmetics (about 10% – 27%).
Multinational corporations with factories in Vietnam such as Unilever, Kao, P&G… also quickly utilize Vietnam’s natural ingredients such as avocado, green tea, cucumber, turmeric, seaweed, aloe vera, honey… to launch new products. Soap types using extracts from avocado, cucumber, olive oil, sunflower oil, and bitter gourd… are not only popular among Vietnamese consumers, achieving high revenue, but also successfully applied by Unilever in other countries such as China, Malaysia, Thailand.
ARE VIETNAMESE COSMETIC BRANDS CAPABLE OF BECOMING ‘THE DARK HORSE IN THE RACE’?
Are the Vietnamese brands neglecting the domestic market?
The current situation in Vietnam sees up to 90% of the market share in the beauty industry belonging to foreign brands. According to data provided by the Ho Chi Minh City Association of Cosmetics, South Korea holds the largest proportion of foreign cosmetics sales in Vietnam with 30% market share, followed by the EU with 23%, then Japan (17%), Thailand (13%), and the US (10%), with the remaining countries contributing 7%.
Many Vietnamese cosmetic brands have been successful in exporting to international markets such as Europe, the US, and Asia. However, the value of cosmetics exports only reached about 302 million USD, still low compared to the potential and strengths of the industry.
In addition to leading ASEAN in cosmetic imports, Vietnam also ranks fifth among ASEAN countries in terms of cosmetics export value. Exported cosmetic products are quite diverse: SKIN CARE PRODUCTS, HAIR PRODUCTS, ORAL HYGIENE PRODUCTS, PERSONAL HYGIENE PRODUCTS, … including some high-end market segments such as perfumes (2%), makeup (3%). According to Euromonitor
To go further, Vietnamese cosmetic companies can seize opportunities and improve product quality, research and develop new technologies, build partnerships with distributors and online sales channels globally.
Recognizing the current situation, the Vietbeauty x Cosmobeauté Vietnam exhibition also hopes to accompany MADE IN VIETNAM brands closer to distributors, agents, spas… domestically and internationally with the expectation of over 10,000 potential customers attending the exhibition with special support programs for businesses.
To learn more about booth booking information, please contact: Ms. Phuong Pham (Emily Pham) via email: [email protected]
