Baby Care; Bath and Shower; Colour Cosmetics; Deodorants; Depilatories; Fragrances; Hair Care; Men' s Grooming; Oral Care; Oral Care Excl Power Toothbrushes; Premium Cosmetics; Sets/Kits; Skin Care; Sun Care

Executive summary

Economic rebound promotes growth

In 2009, Vietnam beauty and personal care witnessed better growth in current value terms in comparison to the previous year. Once the negative impact from the 2008 recession began to wear off and the country experienced positive signs of economic rebound, consumer confidence in spending quickly recovered, which in turn boosted consumption for most commodities including beauty and personal care. Vigorous marketing activities employed by manufacturers to compete with each other further stimulated consumer demand over the review period. Colour cosmetics, skin care and fragrances continued show the most outstanding performances, all observing higher value sales growth for the year.

Consumption trend emphasises health and wellness

Product development diverged with intensified product segmentation for different consumers groups of age, gender and income; however at the same time, there was a general focus on health and wellness. Vietnamese consumers have always been concerned about product safety as a result of unpleasant experiences with low-quality products in the past. Now with higher purchasing power and improved knowledge of beauty and personal care, they crave not only safe but also health-beneficial products and often give their judgement based on products' labels and claims. Natural/organic contents are most favoured by consumers, being aligned with their belief of the positive impacts on their health. Similarly, multifunctional products with the added-value of health protection such as SPF also saw their sales increase significantly.

The reign of international players and masstige products

In the competition for sales and value share, domestic companies were left far behind by international players in all beauty and personal categories. Foreign brands flood both mass and premium segments, gaining consumer preference with dynamic marketing activities and good product quality, from no Table players such as Unilever Vietnam Co Ltd and Procter & Gamble Vietnam. Meanwhile, local manufacturers continued to struggle to improve their positions within beauty and personal care. Another remarkable movement in beauty and personal care is the rapid increase in availability and popularity of masstige products. These offer consumers better quality and more sophisticated values with prices only marginally higher than standard mass brands whilst being much cheaper than premium ones.

Modern retail channels continue to grow

Modern retail channels marked their leadership against traditional stores with the dominance of supermarkets/hypermarkets and health and beauty retailers over independent small grocers and outdoor markets. The most important retail channel to beauty and personal care, supermarkets/hypermarkets continued to display robust growth in term of infrastructure, numbers and coverage in 2009. There are more consumers switching to supermarkets which offer a better shopping experience with easy accessibility, competitive price, good control of product origin and sanitary standard. Meanwhile, a non-store retail channel, direct selling experienced a boom period at the end of the review period led by Oriflame and Avon. Although not yet equal in position to compete with store-based retail channels, the channel posted outstanding sales performance and expects further growth in the future.

Great potential for continuous development

Vietnam is expected to maintain its position as a dynamic country for beauty and personal care over the forecast period. There is still much potential to be exploited with the young population consisting of 50% under the age of 30 years and untapped regions such as the developing rural areas. The main consumption force, however, will continue to be people living in urban areas, whose demand is anticipated to become more sophisticated and closer to global beauty trends. Regarding the competitive environment, international companies will meet strong resistance and counter-attack from more domestic players such as International Consumer Products Ltd but will not easily give up their positions.