Young population and increasing middle class have made Vietnam one of the most attractive emerging retail markets.
According to a recent report by global real estate service firm JLL Vietnam, investors from Japan, Thailand, France and South Korea have flocked to find opportunities in Vietnam. Thai firm, Berli Jucker Plc bought Metro Cash and Carry Vietnam for EUR655m, making it the biggest merger and acquisition transaction in 2014. Not long later, another big player from Thailand, Central Group also acquired Nguyen Kim electronics chain and then the Big C Supermarket.
In 2015, South Korea's top retailer Emart discount store chain was opened in Ho Chi Minh City. Meanwhile, another supermarket brand from South Korea, Lotte, has successfully opened 11 supermarkets and aims to increase the number to 60 by 2020.
After two years joining the retail market, Japan's Aeon Mall now owns four shopping malls, nearly 50 shops and said it expected to open 20 shopping centres in Vietnam by 2020. France's AuchanSuper also decided to expand the business by opening 17 supermarkets in Ho Chi Minh City and 20 shops in the northern region by 2020 after the success of its three Simply Mart stores and assessing the potential growth of local retail market.
As incomes per capita increases, locals now can afford to spend more, and Gap, Mango and Topshop are becoming more familiar with young people. In early September, Zara opened its first flagship store in Ho Chi Minh City and H&M is said to be completing procedures to enter Vietnam early next year.
The report pointed out that Vietnam's retail market has lots of room for growth with people aged 15-64 accounting for 70% of its 90 million population. From 2015 to 2020, its urban population is predicted to growth by 2.6%, one of the highest growth rates in the region.
Trang Bui from JLL Vietnam said, "Vietnam is the most dynamic emerging economy in South East Asia thanks to its increasing disposable incomes, rapid urbanisation and rising living standards."
American consulting firm Boston Consulting Group also assessed that the middle and upper classes will double in size by 2020. People with monthly incomes of over USD714 are the main target of retailers. In addition, credit cards have become familiar with the public and consumers are less worried about spending more. Increasing international tourists and better infrastructure are also important factors to attract investors.
"The competition has become increasingly fierce and only retailers with right strategies to meet market demand will gain greater market share," JLL wrote in its report.
Source: Vietnam Net Bridge
Exhibitors from different countries exhibit in Cosmobeauté Vietnam.
With tax reductions for beauty industry products included in free trade agreements (FTAs), Vietnam is seen as a promising market for cosmetics firms and foreign suppliers of beauty-care machines and equipment.
According to Dao Thu Huong from the Ministry of Finance, under the Vietnam-Republic of Korea FTA, Vietnam committed to cut tariffs on 200 products imported from the Republic of Korea (RoK), including cosmetics.
This would pave the way for RoK cosmetics to flock to Vietnam in the time to come. In early 2010, the RoK could only export seven product lines to Vietnam. However, even with the restriction, the cosmetics import turnover from the market was high at US$12.7 million. During that time, preliminary statistics showed that with the high growth rate of 10-20% per annum and nearly no rival, foreign cosmetics companies dominated the market worth US$150 million a year.
Beauty salon chains have been thriving in Vietnam. Guardian, a brand of Dairy Farm Group, has 39 shops after five years of presence in Vietnam. Orient Beauty Corp, which has distributed SkinFood’s products in Vietnam since 2011, now has 20 shops. Body Shop has developed 20 shops in Hanoi and HCM City since 2009.
Analysts predicted that from 2017-2018, when the import tariff is cut to 20%, RoK cosmetics would be even more commonly used in Vietnamese beauty industry. Not only products from the RoK, but cosmetics from Japan, Thailand and Malaysia would also have opportunities to conquer the Vietnamese market as Vietnam has also signed FTAs with many other countries.
This explains why the number of cosmetic firms attending Cosmobeauté, a well-known exhibition event, has been increasing steadily over the last nine years.
CP Saw, president of Cosmobeauté, said many businesses came to the exhibition to look for clients because they saw great potential in the Vietnamese market.
According to Nielsen, the demand for beauty products in Vietnam was still modest in 2014 with each Vietnamese spending US$4 a year on cosmetics, 1/5 of that in Thailand (US$20 per head per annum).
Commenting about the market scale, a representative of Phuong Mai JSC, which distributes water filters made by Mitsubishi Rayon Cleansui priced at VND50 million and higher, said not only spas and beauty salons, but consumers also order products, which shows an improved awareness of Vietnamese about health care.
However, though the domestic market is large, it is not the place for investors to set up factories. Nguyen Thanh Thao, deputy chair of the HCMC Cosmetics Association said that some foreign invested enterprises have stopped production in Vietnam and left for Malaysia and Thailand.
Source: Vietnam Business News
Vietnam Association of Beauty & Development (VNBA) has just launched the first ever and biggest national beauty competition namely Beauty Art Skill Competition Vietnam (BASC). 3 press conferences of the launching of BASC were separately held at Ho Chi Minh City, Da Nang, and Hanoi, Vietnam.
Beauty Art Skill Competition (BASC) press conference at Hanoi, Vietnam.
Beauty Art Skill Competition (BASC) press conference at Da Nang, Vietnam.
Beauty Art Skill Competition Vietnam (BASC) is the first ever largest national beauty competition in Vietnam. It is a potential platform in Vietnam to provide great opportunity and connect all young and talented beautician, make-up artist, hair-stylist, and nail artist to challenge and exchange beauty knowledge and skills.
“VNBA’s vision is to connect all organisations and individuals who are working in the beauty industry, in the hope of providing safe, high-quality, and professional beauty services for people. We hope that we can contribute in improving the quality and capabilities of all members through seminars, vocational training courses and courses in management and soft skills. We truly believe that by holding national and international skill competitions like Beauty Art Skill Competition Vietnam (BASC), and bolstering international cooperation in the field is the most effective way to achieve our goal and vision.” said Assoc. Prof. Nguyen Thi Thuan, chairperson of VNBA.
The vision of BASC is to encourage confidence and professionalism among the beauty practitioners in Vietnam and to translate their vision as a beauty professional through their work, knowledge and skill at an international level. BASC also aims to uplift the standard of Vietnamese beauty professions, and to encourage beauty profession as a professional career, in order to enhance the standard of beauty industry in Vietnam and to bring it to another peak level.
“We are very glad to have this competition with Cosmobeauté Vietnam in 2017, together we celebrate its excellent 10th year anniversary. We believe through this all-rounded beauty competition in conjunction with the biggest beauty trade exhibition in Vietnam, it will definitely help to boost the standards and quality of beauty practitioners locally. Not only that, we aim to assist them in building better confidence and be able to compete at international stage in the future. Most important of all, we also hope that beauty industry can inspire and influence new and younger generation as an aspiring career,” said Assoc. Prof. Nguyen Thi Thuan, chairperson of VNBA.
BASC focuses on 3 main categories of competition, namely Hair Styling & Make Up, Beauty – Body & Spa Treatment, and Nail Art. Individuals who are creative and passionate in beauty industry are welcomed to participate in BASC.
BASC is expecting to welcome almost 200 national beauty talents in the industry to compete among themselves and perform their utmost skills at the competition, in front of a panel of both local and international judges from 5 different countries. This is the first greatest eye-opening opportunity to all professionals from all aspect of beauty industry in Vietnam. Stay tuned for more information!
BASC will be held in conjunction with the largest and most proven beauty trade exhibition in Vietnam, Cosmobeauté Vietnam. Cosmobeauté Vietnam is celebrating its 10th year milestones in year 2017, reaffirming its esteem presence in Vietnam. In accordance to the 10th anniversary, Cosmobeauté is gladly to announce the partnership with VNBA, together in bringing surprises to the beauty industry. Cosmobeauté Vietnam continues not only to provide opportunity to more brand from around the world, also to bring in talented artist from around the world to showcase excited events and competitions. Stay tuned for more information!