For new cosmetic brands which remain little known, it is not easy to make money.
Can cosmetics manufacturers make money in Vietnam?
However, according to one businesswoman, the Vietnamese market is ‘easy in terms of customers’.
At the Mekong Beauty Show, an exhibition on make-up, beauty care and spas held recently, TVR, a foreign invested cosmetics and food manufacturer, introduced a new biological skin-care mask, made of Ben Tre coconut extract.
The product attracted the attention of many visitors. However, analysts say it’s early too say if the product can sell well in Vietnam, where more and more organic beauty-care products have appeared.
A survey by Nielsen found that the demand for make-up made of natural materials or organic products in Vietnam is 40 percent higher than in other regional countries. The market analysis firm believes that the products made of chemicals are not the cosmetics Vietnamese are looking for.
Commenting about Vietnam’s market, Bui Ngoc Quynh Giao, branding director of Ilahui Vietnam, said doing business in Vietnam is not easy.
Explaining this, Giao said the average income of people is on the rise, leading to an increase in spending on cosmetics. Vietnamese favor foreign made products, but not all of them can go abroad to buy cosmetics or buy foreign products here.
Meanwhile, each product fits a certain market. Therefore, buying cosmetics in Vietnam with consultancy from Vietnamese officers is still a prevailing trend.
Also according to Giao, it is difficult for businesses to implement regulations. As Vietnam-made products are not favored by customers, enterprises want to import products for domestic sale. However, it takes time and money to obtain documents proving the quality of import products.
However, Claudia Bonfiglioli from Informa Beauty commented that the Vietnamese market is full of potential, with extremely high demand for natural and organic products.
More and more world famous brands are available in the market.
The problem is that the market still lacks connections between distributors and manufacturers.
Meanwhile, customers tend to be choosier. Therefore, transparency is the factor that cosmetics manufacturers need to observe.
According to Huynh Bich Tran from Nielsen Vietnam, 43 percent of Asians will pay for high-end products, but 60-72 percent of customers seek products made of natural materials.
The market segment of high-end products with natural materials in Vietnam is still large enough for manufacturers and distributors to exploit.
Asia Plus in September 2016 announced the results of its survey, reporting that 44 percent of surveyed people spent at least VND200,000 a month on cosmetics and 80 percent of women aged below 29 spent VND300,000.
Kim Chi report on VNN