Nearly $700mil. cosmetics market still out of reach for Vietnamese firms

Vietnamese manufacturers have found it difficult getting a foothold in the cosmetics market, valued at VND15 trillion (nearly $700 million) with a high growth rate of 20 percent per annum. 

The market survey last September by Asia Plus found that 30 percent of Vietnamese make up everyday, while 23 percent only make up for special occasions and 25 percent rarely make up.

Most Vietnamese woman (90 percent) own at least one tube of lipstick and 80 percent said they use lipstick regularly.

Besides, powder and foundation cream are also commonly used as 63 percent of women have them and 29 percent use them regularly. It is estimated that women spend VND200,000-500,000 a month on cosmetics. Many women are willing to spend money on many other cosmetics, even though they don’t use the products very often.

The manager of a company specializing in importing and distributing European cosmetics in Vietnam said that the market has been witnessing a stable growth rate of 30 percent for many years.

Reports all show that 95 percent of the Vietnamese cosmetics market share is held by foreign manufacturers, especially brands from South Korea, Japan, Europe and the US.

According to Euromonitor, LG Vina Cosmetics (The Face Shop), Revlon Inc, Estee Lauder Vietnam and Skin Food Vietnam are the major players in the market. Of these, LG Vina holds the biggest piece of the cake with 16 percent of the color cosmetics market share in 2015.

Analysts said that Vietnamese, affected by ad campaigns, believe that foreign made products are better than Vietnamese items, and therefore, are much more expensive.

With powerful financial capability, foreign manufacturers and suppliers can spend big money on ad campaigns and expand their distribution networks.

A survey by Asia Plus showed that the origin, price, brand and components affect consumer shopping behavior.

Director of Phan Nu Hoang Cung (Royal Powder), a Vietnamese brand, said her business receives 2-3 partners from Japan every month.

She said Japanese and South Korean brands have shown interest in the Vietnamese market because the products are suited to the Vietnamese climate and skin.

Vietnamese choose Japanese cosmetics because they believe in ‘Japanese quality’, while they like South Korean products for their modern makeup style.

However, Nguyen Phuong Khanh, the owner of Phan Nu Hoang Cung, still believes that with natural herbs, the Vietnamese brand will still be favored internationally.

US$1 = VND22,500
 
Kim Chi / vietnamnet