Domestic market ample opportunity for Vietnamese cosmetics producers

Vietnam possesses abundant natural resources, offering great potential for the development of the cosmetics industry

Strong market growth

According to a report by Statista - a German market research company, the Vietnamese cosmetics industry is expected to reach a revenue of US$2.66 billion in 2024, 20.2 percent of which comes from e-commerce, with the rate expected to rise to 24 percent in 2027. Meanwhile, research by the UK-based Euromonitor International shows that from 2018 to 2022, the percentage of Vietnamese women using beauty care products increased from 76 to 86 percent, with the rate forecast to grow by 15-20 percent in the future.

This shows that the demand for cosmetics in Vietnam is skyrocketing, with an incredible consumption volume. However, alongside this dazzling development, there is growing concern over the proliferation of counterfeit, fake, and low-quality cosmetics, which threatens consumer health.

According to Ta Manh Hung, Deputy Director of the Ministry of Health’s Drug Administration of Vietnam, there are some cosmetics production and trading facilities that do not operate at the registered addresses. Some change their production and business locations without notifying the regulatory authorities, do not fully comply with the required cosmetics production conditions, or sell substandard cosmetics that have not been certified by the competent authorities. Some cosmetics products are even advertised as they are medicines.

The explosive growth of e-commerce, including online platforms like Facebook, TikTok, Zalo, Shopee, and Lazada, has created a market rife with potential risks. Registering to sell products online is very simple, making it easy for fake, low-quality cosmetics to infiltrate the market, often accompanied by flashy advertisements that deceive consumers.

Attributed to these are businesses that are driven by improper profit motives, and moderate consumer awareness.

Vietnam is endowed with rich natural ingredients, an advantage for domestic companies to create unique, distinctive and high quality products at reasonable prices

Made-in-Vietnam cosmetics

Improving market management and encouraging the production and use of Vietnamese cosmetics is important. The Vietnamese cosmetics market remains highly dependent on imported goods. Meanwhile, Vietnam has abundant natural resources, offering great potential for the development of the domestic cosmetics industry. Developing this industry would not only help create high-quality, affordable products suited to Vietnamese consumers but also enhance the competitiveness of the Vietnamese economy.

Vietnam is endowed with rich natural ingredients, an advantage for domestic companies to create unique, distinctive and high quality products at reasonable prices.

High-quality cosmetics that embody Vietnamese cultural identity and are exported abroad would help build the country’s image, attract tourists, and draw foreign investment. Moreover, the success of Vietnamese cosmetic brands in international markets would help promote Vietnamese culture and improve the country’s position.

Vegetarian, organic and environmentally friendly Vietnamese cosmetic products, such as Cỏ Mềm Homelab, Cocoon, Sao Thái Dương, and Lemonade, have gained the trust of numerous Vietnamese consumers due to their good quality. This is likely a long-term, sustainable direction for Vietnamese cosmetic manufacturers, allowing them to capitalize on abundant agricultural resources while developing a circular economy. Most importantly, this approach strengthens the presence of made-in-Vietnam cosmetics in foreign markets.

Vietnamese cosmetic companies need to invest heavily in research and the development of modern production technologies to improve product quality. Simultaneously, branding and effective marketing development, and strengthening quality control to ensure consumer safety are crucial for them to penetrate foreign markets.

The government should provide supportive policies such as offering preferential loans, helping businesses access advanced technologies, improve production capacity, and promote product research and development to boost domestic production of cosmetics. Tax and land incentives should also be provided. Conditions should be created for Vietnamese businesses to participate in domestic and international trade fairs and exhibitions. It is necessary to develop high-quality human resources, including technicians, managers and salesmen, among others, for the cosmetics industry. The Government should assist Vietnamese cosmetics companies in branding development and gaining consumer trust./.