Source: Taiwantrade | Updated: 06 February 2015
Among the ASEAN markets, Vietnam only occupies 5% the market share after Thailand (30%), Indonesia (23%), Philippines (21%) and Singapore (7%). Vietnam is not yet a major player in the cosmetics market. It is an emerging market with huge potential that has been experiencing impressive growth; growing at a rate of 30% per annum for the past few years, so there is definitely an opportunity for Vietnam to become a major player within Asia. Vietnamese people consume only 4 USD per capita a year while this number for Thai is 20 USD. Therefore, Vietnam is considered as a very potential market for this industry now.
The cosmetic industry in the country has high development and growth potential with an average turnover of 10,500 billion VND a year and an annual sale increase of 30%. However, Vietnamese cosmetic brands only satisfy the popular and lower end market segment currently. While income of people is increasing, consumer tastes and preferences for more sophisticated products are maturing and shifting towards quality brand names. The country’s market has thus become a growing market for well-known brands to exploit like Shiseido, Estee Lauder, L’Oreal, Maybelline… which are now well established in the country. In addition, some foreign brand names also have their production plants in Vietnam like Olay, Pond’s and Avon.
Vietnam has implemented the ASEAN Cosmetics Directive and this has made life for the cosmetic industry much easier. While a reduction in tariffs is financially beneficial, technical obstacles being removed also benefits the cosmetic industry, resulting in more collaboration between companies in member states.
With a population of over 90 million and over half aged between 30 and below, Vietnams an attractive market for the cosmetic industry. Currently the country’s cosmetic and personal care market is estimated to be worth USD150 million/ year and has been enjoying a market growth of 30% for the past several years. Around 90% of cosmetics sold in the country are imported, representing 430 leading cosmetic brands. There are hundreds of locally produced brands and other low prestige cosmetics labels from China, Thailand and Taiwan, targeted towards the mass of low-income consumers. Foreign make-up and skin care products are steadily gaining in popularity among Vietnamese consumers. Sales of skin care products are expected to grow at around 10-15 percent annually over the next three years, as this previously untapped market segment becomes cluttered with more and more foreign and domestic brands. Although Vietnamese consumers still prefer skin care products from Europe and Japan, locally produced products account for more than 50 percent of the market for skin care products.
The demand continues, increasing steadily over the years and a change of government regulations has made it easier for the cosmetic industry to grow. In sum, the market potential for future sales of Taiwan cosmetics is good. Brand awareness is starting to grow and local consumers are steadily spending more on cosmetics and beauty products.
Martina Li (firstname.lastname@example.org)