Vietnam cosmetics market overview
Due to the higher standard of living, there are an increasing number of people using cosmetic products, including skincare products as a daily necessity. According to Mintel, a market research company headquartered in London, the Vietnamese cosmetics market is worth 2.3 billion USD by the end of 2018. The cosmetic market’s revenue has continuously increased over the past two decades, making Vietnam a potential destination for many foreign cosmetic brands.
According to the Kantar Worldpanel Insight Handbook 2019 report, the largest segment of the Vietnamese cosmetics market is skincare. Average expenditure on skin care products such as makeup removers, toners, moisturizers, and serums all increased. This market is expected to reach 2-digit growth in the short-coming future.
Source: VIRAC, GSO
Stability in Body & facial creams and liquids products consumption growth
Skincare as an essential health care routine
According to a survey from Q&Me survey, the proportion daily using skin care products is quite popular these days. More than 86% respondents have used certain skin care products. The same skincare frequency patterns happen for different age groups, different location groups and different income groups. About 40% of women over 23 take care of their skin every day. The most used skin care products are cleansers, sunscreens, moisturizers, toners, serums.
The reason for not using beauty personal care products is mostly that people do not know what to choose or they are too busy to take care of their skin. In general, the number of people aware of using skincare products are increasing day by day.
Source: VIRAC, Q&Me
Spending on skincare products increased in major cities
The report from Q&Me shows that the most popular budget pattern for skincare products is between 101,000 to 200,000 VND; the second popular one is from 200,001 to 300,000 VND. This could be a positive fact for skincare performance when monthly income per capita in Vietnam is about 5,000,000 VND.
Source: VIRAC, GSO
In terms of age, the group having the highest budget for skincare is in the age of 23-29; In terms of location, HCM is far ahead of others with an average expenditure on skincare products of 299,000 VND. The people with the monthly income of above 20m are the key consumers.
The increasing influence of South Korean culture on Vietnam is causing a surge in demand for beauty products, especially serum or essence. Most skin care tips shared by Korean beauty bloggers often emphasized the impressive effect on Asian skin after a short time of using. The hot and humid weather of Vietnam could be an important driving factor in making decisions about which products to purchase. Even in the summer, Vietnamese women faced the problem of dehydrated skin and that is the reason why demand for facial moisturizer has increased.
Consumption situation on distribution channels
According to Euromonitor, more than 68% of cosmetic products are distributed through physical channels, followed by non-store channels. The main distribution channel is retail stores such as Sammi Shop, Coco Shop, Guardian… or stores in the mall.
With the general trend of e-commerce, it is predicted that the popularity of these channels could decrease due to the appearance of new channels such as: authorized online shops; online shops utilizing social media and spa/skin doctors.. According to Omnichannel report, more than 80% of the growth of skin care products comes from the online channel. It is the fact that one in two FMCG Online shoppers has bought at least one beauty product in the urban area. Online buyers are willing to spend more money when there are promotions on online sites or many positive reviews from previous users.
Source: VIRAC, Q&Me
Vietnamese consumers often searching for cosmetics information through Facebook accounts for 69%, followed by friends 48%, and then on websites of cosmetics brands or news sites for women. More than half of cosmetic users have ever bought cosmetics online once or twice a month. And 72% of these people have bought cosmetics through social networks. The number of people who shop online is still on the rise and Facebook is the most popular social networking site to buy cosmetics.
Trends in skin care products consumption
Demand for high-end brands
The increased demand for premium brands: Premium brands such as Shiseido, Estée Lauder, Nu Skin continue to see strong value growth, mainly thanks to the stronger economy, gradual increase in average incomes, higher living standards and strong development of social networks.
Source: VIRAC, GDVC
Over the review period, people with a strong belief in the quality of premium brands were more willing and better able to spend money on expensive premium skin care products. Demand is expected to remain particularly strong among 20-35 year-olds living in main cities across Vietnam.
Products of natural origin
Cosmetic products with ingredients that reflect aspirations for a healthy lifestyle and youth ethical and environmental standards will be preferable. Not only do people look for transparency and traceability of product ingredients, but they are also curious about where ingredients originate and how products are made. Natural brands most selected are: The Body Shop, L’occitane, Innisfree… with natural plant-based ingredients. Asian consumers are turning towards organic products and against animal testing.