The market is worth some 86 trillion Vietnamese dong (3.7 billion U.S. dollars) a year, but according to market research firm Nielsen, on average, Vietnamese spend only 20 U.S. dollars per person per month on cosmetic products compared to 38 U.S. dollars in Thailand, local daily newspaper Vietnam News on Wednesday quoted the association's vice chairman Nguyen Van Minh as saying.
Minh said products such as perfumes, facial cleansers and shampoos made by local brands were of very good quality, but they focused exclusively on quality and paid less attention to packaging, design and marketing, leading to low brand identification.
According to Tran Quang Thang, director of the Ho Chi Minh City Institute of Economics and Management, the middle class, who spend a lot on cosmetics, is set to grow to 33 million by 2020, which points to huge potential for growth.
Realizing this, many foreign companies are looking for partners to distribute their products in Vietnam.
Suky Lim, chief executive officer of South Korea's Threedayslove Co Ltd, said her company, which focuses on exporting products to China due to its large population, has recently studied the Vietnamese market and realized it was growing fast, so it has decided to enter the market.
According to the association, Vietnam has 400 cosmetics businesses, of which 100 are foreign but account for 90 percent of sales.