As Vietnam’s economy continues to expand (7.7 percent GDP growth in 2004), the country’s middle class population is growing, and spending is on the rise. More and more women are willing to purchase affordable, and occasionally, higher-end cosmetics. Vietnam’s cosmetic industry is valued at $65-70 million, boasting around a 15 percent increase last year and a 25 percent increase the year before.
On average, Vietnamese spend around $3-4 per capita on cosmetics each year, significantly lower than many other countries in the region, such as Taiwan ($40), Thailand ($18) and China ($10). Foreign cosmetic sales make up about 2/3 of all sales in Vietnam, though U.S. sales remain low, at around 10 percent. Currently, Korea holds about 30 percent of the foreign cosmetics market in Vietnam, while Japan and the E.U. each hold about 20 percent.
Currently, there are around 100 domestic and foreign cosmetic brands are available in Vietnam, though an increased number of foreign companies are entering the market. Last year, Avon set up a $3 million cosmetic plant in Binh Dong province. Within the first six months, the company had established more than 8,000 customer contacts in the country. Following the opening of the new plant, Avon set up a second facility – a sales center in Ho Chi Minh City – to sell products to sales representatives.