- Beauty and personal care experienced a healthy retail value growth in the first half of 2017 although it was slower compared to 2016. This is due to high maturity in most product categories.
- There has been a rising demand for chemical-free skin and hair care products as a result of increased personal income and changing lifestyles.
- Vietnam has more than 1,700 craft villages which serve as the base of operations for suppliers offering handcrafted ceramic, rattan, bamboo and wooden home decor.
- The home décor and furniture industry in Vietnam is mostly export-oriented while the domestic market of furniture consists of mainly imported products. (EVBN, 2016)
BEAUTY AND PERSONAL CARE
The rapid expansion in most personal care categories including body care, colour cosmetics, facial care, soap, fragrances, bath, hair care and sun care has increased its market value to US$1.78 billion. This is expected to rise considerably even in the short term. Regarding the beauty services, a survey conducted by Q&Me Vietnam Market Research showed that hair treatment (72%) and facial treatment (52%) are the most popular.
On-going domination of international brands
With strong financial capabilities, extensive distribution networks and dynamic marketing activities, international brands have continued to dominate the market in Vietnam.
Regarding cosmetic products, Korea remains in the lead holding 30% of market share and is followed by those from EU (23%), Japan (17%) and Thailand (13%). For personal care, key players such as Johnson & Johnson, Unilever and Procter & Gamble Vietnam have successfully linked their products to domestic perception of highquality brands.
On the other hand, the lack of research and development investment has put many domestic manufacturers in a competitive disadvantage and reduced their market share, which opened the door for more international players
Green oriented consumers
Natural and organic products continue to follow an upward trend despite the higher price.
A series of scandals relating to toxic chemicals in skin care has played a role in diverting consumer’s attention to “greener” products. They have started to recognise the positive influence of natural ingredients in anti-oxidation and skin immunity. This, alongside an increase in disposable income, has allowed customers the more natural and luxury organic products whilst shifting away from the petroleum based ones.
In response to this trend, many manufacturers, especially those from Korea and Japan, have developed and intensively promoted new natural product lines. Oriflame Vietnam, LG Vina Cosmetics and The Face Shop are good examples. International brands could also make use of Vietnam’s indigenous agriculture. Their skin care products can be manufactured locally using Vietnam-grown aloe, citronella, saffron, grapefruit and soapberry.
Threat from unauthorised imports
Since 2015, the purchase of beauty and personal care products from unregistered online sellers has developed significantly. This behaviour could be explained by the large gap in pricing and quicker arrival of new products, in comparison to the stock in legitimate stores. In addition, lack of regulation in this area makes it an obvious challenge to minimise the damage caused by unregistered online sellers to authorised sales.
HOME DECOR AND FURNITURE
With the recent forecasted annual growth rate of 9.5%, household expenditure on home décor, furniture and services is estimated to reach €16 billion by 2020.
Ceramic products for Home Decor made up USD 543.8 million of imported value in 2016, led by tableware, kitchenware, other household articles and toilet articles of porcelain and china. Viet Nam shared 10.7% of the whole world’s imports of these products, ranking number 01. China remains the dominant exporter to Vietnam for all types of ceramic products. Other significant exporters are from Europe and include Czech Republic, Germany, France and United Kingdom, which are well preferred for high-standard and luxury lines.
On the other hand, bathroom supplies and ornamental articles domestically manufactured are key exports from Vietnam to partners such as Japan, USA, Thailand or United Kingdom.
Utilising Vietnam’s vast natural resources in agriculture and forestry, furniture with natural origins have generated a significant trade surplus of USD 4.4 billion, exporting mainly to USA, Japan and United Kingdom. However, Vietnamese distributors also import luxury furniture of brands such as Hafro, Bianchini, Barazza, Cubo Rosso, Geda, Jolynox or Gicinque. In 2017, new tactic for interior layout is seeing more green materials such as wood, rattan and bamboo indoor, combining with glass and transparent materials to utilise sunlight and natural wind. In addition, households have started including the use of natural elements such as brass, copper, wood and marble in their decoration and furniture, reflecting the simplicity and applicability.
Euromonitor International. (2017). Beauty and Personal Care in Vietnam.
EVBN. (2016). Vietnam’s Furniture and Home Decor 2016. Ho Chi Minh, Vietnam: EVBN.
International Trade Centre. (2016). TRADE MAP. Retrieved from http://www.trademap.org/Product_SelProductCountry.aspx?nvpm=1|704||||69|||4|1|2|1|1||1|1|1 Q&Me Vietnam Market Research. (2015, April). Survey on Vietnamese usage of beauty services. Survey on Vietnamese usage of beauty services. Vietnam.
The Hinrich Foundation. (2017, May 26). Vietnam Sourcing Report: Home decor 2017 . Ho Chi Minh, Vietnam: GlobalSources.com.
Vietnam Building Materials Portal. (2017). HL Distribution. Retrieved from http://hldgroup.vn/nhung-xu-huongnoi-that-nam-2017-n13456.html
VIETNAMNET Bridge. (2017, February 05). Vietnam’s beauty and cosmetics industry needs green makeover. Vietnam’s beauty and cosmetics industry needs green makeover. Vietnam: VIETNAMNET Bridge.
Voice of Vietnam. (2017, May 19). Transnationals dominate Vietnam personal care market. Transnationals dominate Vietnam personal care market. Vietnam: VIETNAMNET Bridge.
Voice of Vietnam. (2017, February 05). Vietnam’s beauty and cosmetics industry needs green makeover. sVietnam’s beauty and cosmetics industry needs green makeover. Vietnam: VIETNAMNET Bridge.