According to the "Vietnam Cosmetics Market 2023" report by the global market research company Mintel, the cosmetics market in Vietnam is experiencing robust growth, with an average annual growth rate of 15-20%. Among these segments, the mass-market cosmetics segment holds the largest market share, accounting for 75%. Concurrently, the premium cosmetics segment is also experiencing significant growth, representing 25% of the market.
Together with OCM let's delve into the exploration and market research of the Vietnamese cosmetics industry in this article.
Overview of the Vietnamese Cosmetics Market in 2023
The cosmetics market in Vietnam is expected to grow from its 2022 valuation of 2.3 billion USD to 3.2 billion USD by 2027, according to a study conducted by Euromonitor International. In 2023, the population's growing income levels and growing health and beauty consciousness will fuel the demand for cosmetics and personal hygiene products.
The imported products are present in the cosmetics industry market.
Since 2023, the cosmetics market in Vietnam has witnessed the emergence of several well-known brands from abroad. Not only do imported goods have a wide range of varieties, but they also give customers a multitude of options.
Foreign cosmetic brands such as Dior, Chanel, Estee Lauder, still dominate the largest market share, accounting for 75% of it. These brands possess advantages in terms of brand recognition, product quality, and widespread distribution networks.
The variety of imported cosmetic products available in the Vietnamese market is extensive. These products range from skincare, haircare, and makeup items to personal care products and beauty accessories. They are imported from various countries worldwide, including Europe, the Americas, and Asia, among others.
Vietnamese cosmetic brands are gradually asserting their position in the market
However, it doesn't stop at the dominance of imported products, Vietnamese cosmetic brands are also gradually asserting their positions.
Brands such as Cocoon, Thái Dương, Lagumi, M.O.I Cosmetics, etc., have experienced significant growth in recent times. This growth can be attributed primarily to the expansion of the domestic cosmetics industry and a strong emphasis on research and development of high-quality products.
Furthermore, Vietnamese cosmetic brands are witnessing remarkable breakthroughs. Brands such as M.O.I Cosmetics and Lemonade have garnered the attention of consumers, not only for the quality of their products but also for their harmonious blend with the beauty and culture of Vietnam.
Furthermore, the trend of using organic and natural cosmetics is becoming increasingly popular. This is exemplified by the success of Cocoon cosmetics. Consumers are placing more emphasis on natural and skin-friendly ingredients, while also showing concern for products that do not harm the environment.
A notable point to mention is that the Vietnamese cosmetics market is also witnessing new trends. Businesses need to adapt quickly and meet the increasingly high demands of the market. At the same time, this is an opportunity for Vietnamese brands to enhance the quality of their products and services to compete with foreign brands.
Exploring Further 5 Dominant Skin Care Trends in 2023
The Opportunities of the Vietnamese Cosmetics Market
The Vietnamese cosmetics market has attracted a wide range of both large and small businesses, presenting a significant opportunity.
The rapid growth rate
The growth rate of the Vietnamese cosmetics market is one of the remarkable and noteworthy aspects. With an average annual growth rate of 15-20%, this market is demonstrating strong momentum and clear development potential.
This is driven by several factors, including:
- Economic Growth and Income of the Vietnamese People have led to higher spending on personal care products and services, including cosmetics.
- Vietnamese citizens are increasingly desiring to enhance their appearance and improve their quality of life. Vietnamese consumers are becoming more and more attentive to skincare, haircare, makeup, and other personal care products.
The development of cosmetic distribution channels has also contributed to driving market growth. Currently, cosmetics are distributed through various channels, including retail stores, shopping centers, supermarkets, e-commerce platforms, and more. The diversity of distribution channels has made it easier for consumers to access cosmetic products.
The abundant source of materials at a reasonable price.
Furthermore, Vietnam also enjoys advantages in abundant sources of raw materials and reasonable production costs. As an agricultural nation, Vietnam boasts various crops and herbs that can be utilized in the cosmetics industry.
According to the statistics from the Ministry of Agriculture and Rural Development, Vietnam has more than 10,000 plant species, with approximately 1,000 of them being suitable for use in cosmetics.
These ingredients are reasonably priced and of high quality, meeting the needs of cosmetics businesses. Some common cosmetic ingredients in Vietnam include:
- Fruits and Vegetables: Oranges, lemons, pomelos, aloe vera, cucumbers, tomatoes, ...
- Plants: Turmeric, green tea, chrysanthemum, roses, aloe vera, ...
- Seeds and Vegetable Oils: Coconut oil, olive oil, cashew oil, grape seed oil, ...
These ingredients are used in the production of skincare, haircare, makeup, and other personal care products. Having abundant and cost-effective sources of ingredients is a significant advantage for the cosmetics industry in Vietnam.
Vietnamese cosmetics businesses can leverage this advantage to create high-quality cosmetic products at competitive prices.
Exploring Further What is the difference between natural, organic, and vegan cosmetics?
The rise of vegan cosmetics in Vietnam
In recent years, vegan cosmetics have been becoming increasingly popular in Vietnam. According to a report by Nielsen, Vietnam is one of the fastest-growing markets for vegan cosmetics in the world, with an average annual growth rate of 30%.
The rise of vegan cosmetics in Vietnam can be attributed to several factors, including:
- Vietnamese consumers are increasingly concerned about health and environmental issues. They tend to opt for vegan beauty products because these products do not contain animal-derived ingredients, are not tested on animals, and are environmentally friendly
In recent years, the emergence of vegan cosmetic brands has played a significant role in promoting vegan beauty products and making them more accessible to consumers.
The trend of green and sustainable living is becoming increasingly popular in Vietnam. Vietnamese consumers are becoming more concerned about using environmentally-friendly products, including vegan cosmetics.
The Vietnamese government has implemented policies to encourage The Vietnamese government has implemented policies to encourage the development of the cosmetics industry in general and vegan cosmetics in particular. This has contributed to the growth of the vegan cosmetics market in Vietnam.
In summary, the rise of vegan cosmetics in Vietnam brings numerous opportunities for cosmetics businesses. Companies need to seize this trend to grow and succeed in the market.
Opportunities for foreign cosmetic brands
The Vietnamese cosmetics market is opening up widely and presenting many enticing opportunities for international cosmetics brands. Below are some of the opportunities that international cosmetics brands can leverage in Vietnam:
- The market is experiencing strong growth
- Consumer trust in foreign brands
The increasing demand for high-quality cosmetics: Vietnamese consumers are increasingly emphasizing the use of high-quality and trustworthy cosmetic products.
The diverse product market: Vietnam boasts a highly diverse cosmetics market, ranging from basic skincare products to premium items and organic product lines. This diversity opens up numerous opportunities for foreign cosmetics brands to offer a wide array of skincare solutions
Diverse Distribution Channels Cosmetic brands have the flexibility to utilize various distribution channels such as retail stores, online platforms, or collaborating with local agents and distributors. This approach enhances opportunities to reach consumers
Challenges in the Vietnamese Cosmetics Market
The Vietnamese cosmetics market is experiencing robust growth, yet it also faces several challenges, including:
The Vietnamese cosmetics industry lacks stability in the market.
The cosmetics market in Vietnam is currently witnessing intense competition between domestic and foreign brands. This has led to rapid changes in trends, pricing, and product quality.
The instability of the cosmetics market poses challenges for businesses in developing and implementing their business strategies. Companies need to quickly adapt to market changes to maintain their competitiveness.
Sensitivity to product pricing
Vietnamese consumers often have a tendency to compare prices before making a purchase. Therefore, businesses need to pay attention to controlling the cost of their products to compete effectively.
Furthermore, Vietnamese consumers also tend to opt for products with reasonable prices and good quality. Businesses should focus on improving product quality to meet the demands of consumers.
In addition to the two main challenges mentioned above, the cosmetics market in Vietnam also faces several other challenges, including:
- The competition from counterfeit, fake, and imitation products
- The shortage of high-quality human resources
- The regulations regarding the management of the cosmetics market are not yet well-defined
- Businesses need to have a clear understanding of these challenges in order to devise appropriate solutions.
The potential market offers numerous opportunities for cosmetics businesses, encompassing both domestic and international brands. Nevertheless, businesses must also be mindful of several market challenges, including intense competition, price sensitivity of products, and various other challenges.
If you want to overcome the challenges and seize opportunities for developing high-quality cosmetic products don't hesitate to contact OCM We provide detailed consultation and support for cosmetic manufacturing by our experienced team of experts.
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