Currently, there are about 137,000 businesses doing business in this industry. Worth mentioning, that while the market is fertile, Vietnamese enterprises only account for about 10% of the market share.
An overview report of the Beauty industry in 2023 on 5 e-commerce platforms in Vietnam (Shopee, Lazada, TikTok Shop, Tiki, Sendo) from Metric shows that the total industry revenue is 37,700 billion VND, with sales reaching 341 million products. products, growing over 50% compared to 2022. The revenue growth rate of the Cosmetics industry through e-commerce is predicted to maintain at 20-30% in the next 5 years.
According to statistics from the General Statistics Office, Vietnam is currently in a golden age of population, with women accounting for 50.1% of the total population of 100.3 million people. Of these, the age group from 15 to 59 years old will account for 62.2% by 2023. In a developing country like Vietnam, the demand for beauty products always accounts for a significant proportion. This is evident in 2023 even though Vietnam's economy is facing many difficulties due to the global economic recession.
According to Statista's report, Vietnam Cosmetics industry revenue is expected to reach 2.66 billion USD this year 2024, with e-commerce channels accounting for 20.2% and increasing to 24% by 2027. However, with the Actual growth rate, this rate may be even higher due to the growth of livestream activities and multi-channel sales. The percentage of women using beauty products increased from 76% to 86% from 2018 to 2022 and is expected to continue to increase in the coming years.
Forecasts from Euromonitor International also show that the scale of the Vietnamese cosmetics market is growing larger with an average growth rate of 6%/year. It is predicted that by 2026, the total revenue of the cosmetics industry will reach 3.5 billion USD and the Vietnamese beauty care market may find growth opportunities thanks to this trend.
Currently, there are about 137,000 businesses doing business in this industry. Worth mentioning, that while the market is fertile, Vietnamese cosmetics businesses only account for about 10% of the market share. However, the good news is that this number is predicted by industry insiders to continue to grow strongly in the future, a representative of DKSH Vietnam shared at the recent Beauty Show 2024.
There are many reasons for the rise of Vietnamese businesses. Firstly, businesses are currently actively investing in upgrading production lines and searching and selecting raw material sources with guaranteed quality.
In this aspect, Vietnamese businesses will have the advantage of better understanding the nature of the skin as well as the needs of domestic customers. This is also what an emerging cosmetics company, M.O.I Cosmetic - founded with Lam Thanh Kim and singer Ho Ngoc Ha - has taken as a guideline since its inception and has existed until today.
Second, Vietnamese consumers tend to use products with natural, environmentally benign ingredients, aiming for sustainability. This is opening up huge opportunities to help domestic businesses regain their position. DKSH added that the trend of safe and benign green ingredients, such as sulfate/detergent-free products that can prevent potential damage to sensitive skin, is very popular in Vietnam.
A recent survey from the Ministry of Industry and Trade shows that the demand for green products in Vietnam will grow by an average of 15% per year from 2021 - 2023. Up to 72% of Vietnamese consumers are willing to pay more. for green products, they show consumers' growing awareness and interest in protecting the environment.
Nielsen's market report also notes that the global green and sustainable technology market size is expected to expand at a high compound annual growth rate (CAGR) of about 24% during the forecast period (2021-2027). ). This trend is also affecting the beauty and personal care industry as the global market for green products is growing faster and more profitable than other products in the same category.
Resonating with consumer behavior, this trend has become widely popular globally, including in Vietnam. Thereby, brands have been making efforts to meet criteria such as environmentally friendly and user-friendly materials in their products.
On the contrary, DKSH representatives also emphasized that the Vietnamese cosmetics market is requiring businesses to pay more and more attention to packaging design, brand communication, and product distribution methods. When Vietnam has joined a series of free trade agreements and brought import taxes on this type of goods to 0-5%, it is expected that the Vietnamese cosmetics market will be even more vibrant. This is also the reason why Vietnamese brands need to focus on product development.
(markettimes.vn)
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