Market research on Vietnamese Cosmetics_Final_Light versio…

Agenzia per la promozione all’estero e l’internazionalizzazio l’internaziona lizzazione ne delle imprese italiane (in gestione transitoria)

Ufficio di Hochiminh City

MARKET RESEARCH ON COSMETICS INDUSTRY IN VIETNAM

by Pham Hoang Tiet Truc, Trade Analyst of ICE Hochiminh November 2012

Copyright Agenzia per la promozione all’estero e l’internazionalizzazione delle imprese italiane

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TABLE OF CONTENTS 1. Market Market overview overview ...................... ................................. ...................... ....................... ....................... ...................... ...................... ....................... ..................3 ......3 2. Cosmetics consumption in Vietnam...........................................................................4 3. Domestic Domestic production production ...................... ................................. ...................... ...................... ...................... ...................... ...................... ......................5 ...........5 4. Export value..................................................................................................................6 5. Import Import value.......................... value..................................... ...................... ....................... ....................... ...................... ...................... ....................... .....................7 .........7 6. Category analysis.........................................................................................................9

6.1. Perfumes...................................................................................................................9 6.2. Hair care care ....................... .................................. ...................... ...................... ....................... ....................... ...................... ...................... .......................10 ............10 6.3. Skin care.................................................................................................................13 6.3.1. Body care............. care .......................... .......................... .......................... .......................... ......................... ......................... .......................... .................. .....14 14 6.3.2. Facial care...........................................................................................................15 6.3.3. Baby skin care.....................................................................................................15 6.4. Toil Toilet etrries ies (Deod Deodor ora ants, Bat Bath and and Show Shower) er) .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ....1 ..15 5 6.5. Colour Cosmetics....................................................................................................18 7. Distributio Distribution n ....................... .................................. ...................... ...................... ....................... ....................... ...................... ....................... .......................20 ...........20

7.1. Channels.................................................................................................................20 7.2. Margi Margins ns ....................... .................................. ...................... ....................... ....................... ...................... ...................... ....................... ....................... .............21 ..21 8. Regulation on cosmetics...........................................................................................21

8.1. P rodu roduct ct proclam proclamat ation ion............. .......................... .......................... .......................... .......................... .......................... .......................... ................ ...21 21 8.2. P rodu roduct ct inform informat ation ion dossier .......................... ....................................... .......................... .......................... .......................... ................... ......22 22 8.3. S afet afety requir requirem ement ents s .......................... ....................................... .......................... .......................... .......................... .......................... .................. .....23 23 8.4. P rodu roduct ct labelin labeling g ......................... ...................................... .......................... .......................... .......................... .......................... ......................... ............23 23 8.5. Impor Importt regula regulattion............. ion .......................... ......................... ......................... .......................... .......................... .......................... ........................ ...........24 24 8.6. Custom ustoms s proced procedur ures es........... ........................ .......................... .......................... .......................... ......................... ......................... .................... .......25 25 8.7. Tax... Tax..... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ...26 .26 9. Market Market data ...................... ................................. ...................... ....................... ....................... ...................... ...................... ....................... ....................... ............28 .28 10. Three-year forecast by category...............................................................................34 11. Import Import rates rates by HS Codes ..................... ................................ ...................... ...................... ....................... ....................... ...................... ............36 .36 12. List of major importers and distributors of cosmetics in Vietnam ........................ ............ ............ 38

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TABLE OF CONTENTS 1. Market Market overview overview ...................... ................................. ...................... ....................... ....................... ...................... ...................... ....................... ..................3 ......3 2. Cosmetics consumption in Vietnam...........................................................................4 3. Domestic Domestic production production ...................... ................................. ...................... ...................... ...................... ...................... ...................... ......................5 ...........5 4. Export value..................................................................................................................6 5. Import Import value.......................... value..................................... ...................... ....................... ....................... ...................... ...................... ....................... .....................7 .........7 6. Category analysis.........................................................................................................9

6.1. Perfumes...................................................................................................................9 6.2. Hair care care ....................... .................................. ...................... ...................... ....................... ....................... ...................... ...................... .......................10 ............10 6.3. Skin care.................................................................................................................13 6.3.1. Body care............. care .......................... .......................... .......................... .......................... ......................... ......................... .......................... .................. .....14 14 6.3.2. Facial care...........................................................................................................15 6.3.3. Baby skin care.....................................................................................................15 6.4. Toil Toilet etrries ies (Deod Deodor ora ants, Bat Bath and and Show Shower) er) .... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ....1 ..15 5 6.5. Colour Cosmetics....................................................................................................18 7. Distributio Distribution n ....................... .................................. ...................... ...................... ....................... ....................... ...................... ....................... .......................20 ...........20

7.1. Channels.................................................................................................................20 7.2. Margi Margins ns ....................... .................................. ...................... ....................... ....................... ...................... ...................... ....................... ....................... .............21 ..21 8. Regulation on cosmetics...........................................................................................21

8.1. P rodu roduct ct proclam proclamat ation ion............. .......................... .......................... .......................... .......................... .......................... .......................... ................ ...21 21 8.2. P rodu roduct ct inform informat ation ion dossier .......................... ....................................... .......................... .......................... .......................... ................... ......22 22 8.3. S afet afety requir requirem ement ents s .......................... ....................................... .......................... .......................... .......................... .......................... .................. .....23 23 8.4. P rodu roduct ct labelin labeling g ......................... ...................................... .......................... .......................... .......................... .......................... ......................... ............23 23 8.5. Impor Importt regula regulattion............. ion .......................... ......................... ......................... .......................... .......................... .......................... ........................ ...........24 24 8.6. Custom ustoms s proced procedur ures es........... ........................ .......................... .......................... .......................... ......................... ......................... .................... .......25 25 8.7. Tax... Tax..... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ...26 .26 9. Market Market data ...................... ................................. ...................... ....................... ....................... ...................... ...................... ....................... ....................... ............28 .28 10. Three-year forecast by category...............................................................................34 11. Import Import rates rates by HS Codes ..................... ................................ ...................... ...................... ....................... ....................... ...................... ............36 .36 12. List of major importers and distributors of cosmetics in Vietnam ........................ ............ ............ 38

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1. Market overview

In 2011, Vietnam cosmetics posted strong current value growth. Over the review period, manufacturers launched vigorous marketing activities to compete with each other to stimulate consumer demand. There was also greater availability of new brands targeting different consumer segments. Colour cosmetics, skin care, hair care and perfumes performed very well over the review period. Consumers showed great interest in premium brands. As Vietnamese consumers enjoyed higher disposable income and standard of living, they were more willing to spend on premium products, which they believed to have better quality compared to domestic ones. Greater exposure to premium brands and higher availability of premium products also helped in changing consumer preference. preference. International players outperformed domestic players in all product categories. Foreign brands were well represented in both mass and premium product segments, gaining consumers due to their active marketing activities, strong brand awareness and good product quality. Meanwhile, local manufacturers continued to struggle due to the fierce competition. They tended to focus on low-income segments, or consumers in rural areas to drive sales. Modern retail channels continued to outperform traditional channels such as independent small grocers and outdoor markets. Supermarkets or hypermarkets continued to post healthy growth in terms of facilities, numbers and coverage. This channel offered a better and more convenient shopping experience, with easy accessibility, competitive price, wide range of products and reliable product origins. Vietnam is predicted to continue its robust development in beauty and personal care over the forecast period. The country has great potential for growth with the young population and the untapped market in rural areas. Consumers, especially those living in urban areas, are expected to have more exposure to the products’ benefits and usage and therefore have more sophisticated demand for beauty and personal care products. Value growth and product availability are both expected to be strong.

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2. Cosmetics consumption in Vietnam

In the last four years, the value of Vietnam cosmetics consumption has increased steadily with an average rate of 7%, equal to 372 million USD annually. In 2011, the consumption reached a record of 410.4 million USD which is 21.8% higher than the 2008’s value. This steady growth is mainly driven by younger professionals, who have an increasing expendable income that they want to spend on good quality but affordable products.

Source: ICE Hochiminh processing of General Statistics Office of Vietnam (GSO)’s data

In details, products for skin and body (156.9 million USD) and haircare (157.5 million USD) made up a major share of 76% of total consumption in the year of 2011. Meanwhile, toiletries products e.g. shaving cream, deodorants, bath preparations held a stable position of 12%, equal to 46.4 million USD per year. For the rest, including perfumes, make-up and nail products, their share was 10% totally.


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According to Vietnam’s Chemical Cosmetic Association’s data, there are over 430 leading cosmetic brands on sale in the Country, of which 90% is “well-known foreign brands”. Well-known international brands such as L’Oreal, Clinique, Estee Lauder and Clarins are all proving very popular and are continuing to build on an exciting brand recognition and association with good quality products. In the recent years, many international brand owners have chosen to invest in production and distribution facilities in Vietnam, with names such as Unilever, P&G, Beiersdorf, Avon, Shiseido, all building facilties in Vietnam. In the other hand, the domestic brands only cater to the lower segments, with cheaper less sophisticated brands that tend towards simple formulations and basic packaging. However, their advantages lie on well understanding of the market and consumers’ needs and applying natural ingredients extracts into production. In summary, the market opportunity is still available and there is significant room for the expansion and further development of both domestic and foreign brands. 3. Domestic production

In Vietnam, the supplies of cosmetic products are divided into three categories, which are domestic products, legally imported products, and hand-carried and illegally imported products. It is estimated that 70% of the cosmetics distributed through traditional retail stores and market, are illegally imported. Since there is not official data of hand-carried and illegally imported products, this research only focuses on the first two categories. During 2008 – 2011 period, the production value of local manufacturers went up slightly with annual rate of 10.4%. The output went through the roof with 381.7 million USD in 2010 before holding back with 0.5% decrease in the next year on the ground that local consumers started tightening their expenditure under the Country’s economic crisis. This year, it is forecasted that the output value will decline a little bit, owing to the fact that the business conditions are still negative.


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Most of cosmetic products supplied by local manufacturers are skin care, body care, hair care and oral hygiene products. These products mainly have simple formulation and affordable prices to many types of consumers. On the contrary, sophisticated products e.g. perfumes, nail, make-up, only make up a minor share and in some extent, compensated by the imported products.


4. Export value

From 2008 to 2011, Vietnamese cosmetic producers exported 16 percent, or 59 million USD, of their annual output into neighboring countries such as J apan, India, Korea, China and ASEAN countries. The export structure is quite unbalanced, in which toiletries and hair care product hold the major proportion of 85.8 percent.

Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data 6



In 2008, the export value was 33.13 million USD. However, the value has soared dramatically to 104.3 million USD in 2011, with annual grow rate of 49.3%. This dramatic increase is solely contributed by foreign-invested companies. For example, Procter & Gamble (P&G) Indochina and Shiseido Vietnam are the two largest exporters, which occupied 36% of total export revenue in 2011.

Value share of cosmetics export in 2011 Procter & Gamble Indochina Co,. Ltd 23% Others 47%

Kao Vietnam J SC 8%

Win Mart J SC

Shiseido Vietnam Co,. Ltd 13%

Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

5. Import value

Due to the lack of domestic production, sophisticated and high level cosmetic products have to be imported. From 2008-2011, imports grew at a relatively rapid pace of 34.7% yearly. In 2008, the total import value was 80.4 million USD, but has soared significantly to 182.4 million USD in 2011. Specifically, this significant growth was solely driven by the increasing demand of high quality skin and body care and make up products, from 15.4 million USD in 2008 to 75.6 million in 2011. In the meantime, perfumes, hair care, toiletries and bath preparation still went up gradually with growth of 17.6%, 13.4% and 22.6% respectively. Local importers and distributors forecast that demand will likely increase between 10-15% in the next several years due to the increasing need of the young professionals.

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Market share of Asian-made cosmetic products have increased significantly since 2008. Currently, four out of five largest exporters into Vietnam are neighboring Countries, with Thailand and Malaysia leading the market with 42.5% and 10.5% market shares in 2011 respectively. Italy’s share of cosmetics exports into Vietnam was 3.2% (9th rank) in 2011, soar from 2.4% in 2009 and 2.8% in 2010. Whereas, France, a direct rival of Italy, stabilized at 3rd rank, with 10.5% market share with 0.3% increase, compared to 2009’s. Comparison of cosmetics import value in 2009 and 2011 Country of origin

1 2 3 4 5

Value 2009 (USD)

7 8

Thailand Malaysia France Korea (Republic) China United States of America Philippines J apan

9

Italy

3,362,888

10

Indonesia

2,365,034

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52,766,879 20,423,598 12,363,821 8,126,249 4,832,697 10,574,232 6,316,571 4,579,947

Market share

37.6% 14.5% 8.8% 5.8% 3.4% 7.5% 4.5% 3.3% 2.4% 1.7%

Value 2011 (USD)

Market share

2009 -2011 Mkt. Share

∆

77,591,365 19,147,716 19,094,317 10,642,006 9,502,363

42.5% 10.5% 10.5% 5.8% 5.2%

4.9% -4.0% 1.7% 0.0% 1.8%

9,365,018

5.1%

-2.4%

6,228,562 5,957,819

3.4% 3.2%

-1.1% -0.1%

5,832,667

3.2%

0.8%

2,806,421

1.5%

-0.2%

Total value 140,334,719 182,396,807 Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data *Note: the 2009 and 2011’s data was chosen to show the differency in the last 3 years.

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6. Category analysis 6.1.

Perfumes

Throughout 2008 - 2011 period, perfumes displayed a robust current value growth of 18.8% annually. This was due to the rising demand and greater availability of products. Perfumes were regarded as luxury products by most Vietnamese and were used during special occasions such as parties and weddings. During the reviewed period there was a significant increase in frequency of perfumes usage, mostly among the younger and fashionable generation. They employ perfumes as an essential component when going out and socializing, rather than limiting it for special occasions only.


In 2011, France remained in the leading position in perfumes with a 51.7% value share, due to its outstanding performance in mass segments. A strong presence, at major luxury department stores in the whole Country, is a large advantage to reach the major potential consumers. Philippines stabilized at the second position with 13.7%. This value was mainly contributed by Avon Products Inc and J ohnson & J ohnson Consumer Asia P acific whose manufacturing facilities located in Philippines. Italy held the third position with 7.9% value share with 23.8% growth rate during the review period. Italian perfume brands, popular to local market, are Bulgari, Gucci, Armani and Versace, of which Bulgari took the second leading position brand with over 1 million USD import value in 2011. Perfumes are expected to see a constant annual growth rate (CAGR) of 17.8% over the forecast period, due to growing demand from consumers and more international brands officially entering Vietnam market. The main consumers will still be young adults with middle to high-incomes.

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Comparison of perfumes’ import value in 2009 and 2011 Country of origin

1 2

France Philippines

3

Italy

4 5 6 7 8

United States of America Indonesia United Kingdom Spain China

Value 2009 (USD)

Market share

Value 2011 (USD)

Market share

2009 -2011 Mkt. Share ∆

5,368,303 1,219,098

54.0% 12.3%

8,531,734 2,259,835

51.7% 13.7%

-2.28% 1.43%

569,707

5.7%

1,310,038

7.9%

2.21%

5.9% 4.8% 3.2% 2.4% 2.3%

-1.20% -3.88% 0.00% 0.28% 1.37%

706,785 867,364 321,131 207,900 92,747

7.1% 8.7% 3.2% 2.1% 0.9%

975,350 798,644 532,722 391,109 380,121

Total value 9,947,455 16,506,996 Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

Major brands with large import value in 2011 No.

Brands

1 2 3 4 5 6 7 8 9 10

Chanel Bulgari Christian Dior Lancome Gucci Armani Burberry Givenchy Versace CK

Import value (USD)

2,398,671 1,034,700 832,471 426,008 248,265 247,784 210,669 171,244 151,510 142,684

Value share

14.5% 6.3% 5.0% 2.6% 1.5% 1.5% 1.3% 1.0% 0.9% 0.9%


6.2. Hair care

In 2011, hair care saw a 10% drop of import value, on the ground that multinational corporations such as Procter & Gamble, Unilever, J ohnson & J ohnson reduced their imported products from neighboring countries e.g. Thailand and Malaysia and diversified their product ranges in the local market. Generally, imported products still went up with 14.8% annual growth in the last four years. This growth rate was driven by non-traditional hair care products such as perms and relaxants, salon hair care and styling agents. The increasing use of these products was due to consumer demand, mostly from urban consumers who wanted to look fashionable.

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In 2011, Thailand maintained its leading position in hair care with value share of 42.6% with a drop of 6.7 percent, compared to 2009’s. Italy still held the second rank with 11.1% and followed by the America’s 8% market share. However, Italian products have achieved a remarkable 30.9% annual growth during the last four years, due to their increasing availability in domestic market. Comparison of hair care’s import value in 2009 and 2011 Country of origin

1

Thailand

2

3 4 5 6 7 8 9 10 11

Value 2009 (USD)

Market share

Value 2011 (USD)

Market share

2009 -2011 Mkt. Share ∆

16,412,812

49.3%

14,194,914

42.6%

-6.7%

Italy

2,037,167

6.1%

3,706,805

11.1%

5.0%

United States of America Malaysia China Korea (Republic) Germany J apan Spain Indonesia France

3,052,708 2,510,117 2,186,609 1,508,232 527,282 961,111 1,364,682 395,689 372,430

9.2% 7.5% 6.6% 4.5% 1.6% 2.9% 4.1% 1.2% 1.1%

2,667,276 2,539,245 2,422,059 2,063,588 1,367,025 1,190,899 684,372 594,401 589,352

8.0% 7.6% 7.3% 6.2% 4.1% 3.6% 2.1% 1.8% 1.8%

-1.2% 0.1% 0.7% 1.7% 2.5% 0.7% -2.0% 0.6% 0.7%


The leading imported brands were Pantene and Head & Shoulder with anti-hair loss product line. Although they were priced higher than others in the same segments, Pantene was known for its high quality. Furthermore, Procter & Gamble had a wide range of standard products, e.g. shampoos and conditioners, which helped the company satisfy consumer groups with different needs and income levels. 11



Major companies with large import value in 2011 No.

1 2 3 4 5 6

Country of origin

Import value (USD)

Importers

Brands

Procter & Gamble Vietnam Nature Creative Group F.C Co,. Ltd Nam Dao Co,. Ltd

Pantene, Head & Thailand Shoulder

6,748,027

19.4%

Davines

Italy

2,157,858

6.2%

Bigen

Thailand

1,357,076

3.9%

Wella

Thailand

1,323,546

3.8%

Thailand

1,267,075

3.6%

1,143,301

3.3%

Unilever Vietnam An Thinh Phat Trading Co., Ltd

Clear, Sunsilk, Dove Artego, Livegain

Italy, Korea

Value share


Meanwhile, Italian brands occupied the professional product segment. In 2011, its largest exporter is Davines Spa with 6.2% of total hair care import value. Other companies with growing export revenue are Rolland Snc, Tricobiotos Spa, Artego, OneTech Srl, Beauty & Business Srl and Pidielle Srl.


Hair care is predicted to decline marginally in constant value terms over the forecast period. The market for standard shampoos and conditioners is saturated, therefore growth is driven by other segments such as styling agents or perms and relaxants products. Product development may focus on added benefits of hair care products, such as added moisturizers, scalp nourishments, UV protection or anti-ageing.

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6.3. Skin care

Skin care saw a strong current value growth of 15% during 2009-2011 period, as it became more diversified. Since consumers became more knowledgeable about the skin care process, companies continued to launch more diversified products targeting special needs to drive sales. In 2011, the market witnessed a 2.7% slight drop in the total import, as a result local consumer tightened their expenditure on high-priced imported cosmetic and started looking for more affordable ones. Except for Thailand with 25.8% growth rate, other countries had an average decrease of 20.3%. Italy, J apan and the USA, with growth rates of minus 42.65%, 38.97% and 35.25%, were the three countries with the largest drop in their export revenue.


Comparison of skincare’s import value in 2009 and 2011 Country of origin

1 2 3 4 5 6 7 8 9

Thailand France Korea (Republic) J apan United States of America China HongKong Malaysia Philippines

Value 2009 (USD)

Market share

26,239,969 5,659,447 6,278,299 3,013,591

43.5% 9.4% 10.4% 5.0%

5,424,929 1,027,146 12,978 1,340,810 1,373,080

9.0% 1.7% 0.0% 2.2% 2.3%

Value 2011 (USD)

37,332,516 8,799,434 7,878,272 3,895,387 3,702,125 2,009,328 1,439,945 1,379,488 1,241,614

Market share

2009 -2011 Mkt. Share ∆

49.4% 11.6% 10.4% 5.1%

5.8% 2.2% 0.0% 0.1%

4.9% 2.7% 1.9% 1.8% 1.6%

-4.1% 1.0% 1.9% -0.4% -0.6%

16 Italy 589,802 1.0% 555,240 0.7% -0.2% Total value 60,258,637 75,640,401 Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data 13



Italy held the 16th rank among the major skin care exporters into Vietnam with less than 1% value share. Italian skin care products is still on the first stage of market penetration with few names such as Histomer, Dibi, Comfortzone, Erbario Toscano, and Dr. Taffi. 6.3.1. Body care

Beiersdorf AG held the leading position in skin care with 23.7% value share in 2011. Its strongest brand, Nivea Visage, was among the first international skin care brands to enter Vietnam. Since then, the brand established its presence in the market, with high product quality and innovative marketing activities on various media channels, such as television, newspapers and numerous promotional campaigns. Beiersdorf also had a diversified skin care products portfolio, which satisfied all consumers segments. Its products ranged from body, lip and facial to hand care, targeting different trends such as firming, anti-acne, whitening and men’s grooming. Major importers of skincare products in 2011 No.

1 2 3 4 5 6 7 8 9 10 11

Importers

Beiersdorf Vietnam Co,. Ltd Procter & Gamble Vietnam AA Pharmaceutical Co,. Ltd LG Vina Co,. Ltd L’Oreal Vietnam Co,. Ltd Unilever Vietnam Phytopharma Co., Ltd J ohnson & J ohnson Vietnam Co,. Ltd Shiseido Vietnam Co,. Ltd Thuong Xuan Cosmetics Viet Lotus Co,. Ltd

Brands

Country of origin

Nivea

Thailand

17,960,457

23.7%

Olay

Thailand

7,212,398

9.5%

Clean & Clear

Thailand

4,917,630

6.5%

Ohui

Korea

3,300,671

4.4%

Maybelline

USA

2,748,293

3.6%

Hazeline

Thailand

2,563,906

3.4%

Cetafil

France

2,122,570

2.8%

Thailand

2,025,024

2.7%

J ohnson & J ohnson (Baby)

Import value (USD)

Value share

Shiseido

J apan

1,732,864

2.3%

Oriflame

Poland, Sweden, Italy

1,117,847

1.5%

Korea

1,100,962

1.5%

The Face Shop


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6.3.2. Facial care

Procter & Gamble Vietnam retained its second position with 9.5%. Their strongest brand, Olay, was the leading brand in facial care segment, which is targeted to mid-high income consumers. Their direct rival, Hazeline, held the sixth rank with 3.4%. Meanwhile, East Asian products, from J apan and Korea, also maintained their lion share in the market. Their major brands, such as Ohui, Shiseido and The Face Shop, made up 8.2% value share, are all targeting high-income customers. Beside traditional products, Vietnamese consumers were more interested in medicated skin care products in conjunction with rising consumer awareness towards appearance and beauty. Furthermore, manufacturers continued to spend their efforts to educate consumers about the benefits of medicated skin care products to increase consumer awareness of such products in the Country. Major imported medicated skin care products are Clean & Clear, Cetafil and Vichy. They made up 10.2% of total value imported skin cares. Their success is attributed to its extensive distributing network and especially its good relationship with chemists/pharmacies. Furthermore, the company usually has point-of-sale advertisements to attract consumer attention to its products and brands. 6.3.3. Baby skin care

Demand for baby care products continued to grow in recent year, with the increase in disposable income and an improving standard of living, parents were more willing to spend on baby care products. Responding to consumer demand, baby care saw rising availability and variety of products and brands. Consumers also became more demanding in choosing the best products for their babies. J ohnson & J ohnson Vietnam continued to lead baby care segment with a value share of 49% or 2.7% of total imported skin cares in 2011. Skin care is expected to grow at constant value CAGR of 10.4% over the forecast period. The rising demand is driven by consumers’ greater awareness of skin care. Growth is also due to the expansion to outside urban areas, with basic low-priced skin care products. Features such as sunscreen, anti-smoke and dust are becoming essential for every skin care product. Nourishers or anti-aging, body firming and natural skin care products are expected to be the main trends to drive growth in the forecast period. 6.4. Toiletries (Deodorants, Bath and Shower)

During the review period, toiletries were very dynamic with many promotions and advertising activities. Similar to other beauty and personal care, consumers were in favor of international brands. Prices and advertisements were two measures of product quality. Therefore, manufacturers were facing fierce competition on price and promotions in the market.

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Vietnam has a tropical climate, with high temperatures and humidity all year round. It is easy for both men and women to perspire and produce unpleasant body odours. As people became more conscious about their appearance and body odour, deodorants, bath and shower products became more essential. Thus, the category recorded a healthy current value growth at 22.6 % in the last four years. Comparison of toiletries’ import value in 2009 and 2011

Country of origin

1 2 3 4 5 6 7 8 9 10

Thailand Malaysia China Philippines United States of America France Australia Indonesia Korea (Republic) J apan

Value 2009 (USD)

Market share

Value 2011 (USD)

Market share

2009 -2011 Mkt. Share ∆

10,108,873 16,572,660 1,526,196 3,712,454

26.7% 43.8% 4.0% 9.8%

26,030,102 15,157,489 4,690,855 2,626,277

45.7% 26.6% 8.2% 4.6%

19.0% -17.2% 4.2% -5.2%

1,389,810 963,641 119,047 466,590 320,166 594,344

3.7% 2.5% 0.3% 1.2% 0.8% 1.6%

2,020,267 1,173,797 772,867 703,593 670,095 602,565

3.5% 2.1% 1.4% 1.2% 1.2% 1.1%

-0.1% -0.5% 1.0% 0.0% 0.3% -0.5%

18 Italy 166,213 0.4% 260,584 0.5% 0.1% Total value 37,845,761 56,962,033 Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

Italy held the 18th rank among the toiletries exporters into Vietnam with over US$260,000 in 2011. Italian skin care products is still on the first stage of market penetration with few names such as Bulgari, Admiranda, Tesori d’Oriente, Denim, Vidal, Erbario Toscano, Comfortzone. 16



In 2011, Beiersdorf AG continued its leading position with a 39.7% value share. Its brand Nivea Deodorant retained its lion share in deodorant segment with roll-ons and sprays formats. The brand was favoured by consumers due to its early entry into the market. The success of Nivea was due to the dynamic and creative marketing activities by Beiersdorf AG, and the fact that its product design and positioning were attractive to both men and women consumers. Beiersdorf introduced brightening deodorants for women, which satisfies female consumer demand to deodorize and brighten under-arm skin at the same time. Nivea also had a masculine design in a grey colour that appeared to be attractive to male consumers. J ohnson & J ohnson continued to be the leading exporter of bath and shower products with a combined 16.8% value share. However, half of this value, equal to 4.63 million USD, was contributed by products for baby. Other major following exporters are Unilever, Procter and Gamble and Leivy. Major importers of toiletry products in 2011 No.

1 2 3 4 5 6 7 8 9 10

Importers

Beiersdorf Vietnam Co,. Ltd AA Pharmaceutical Co,. Ltd J ohnson & J ohnson Vietnam Co,. Ltd Unilever Vietnam Vietnam Australia Trading Co,. Ltd SC J ohnson & J ohnson Vietnam Co,. Ltd Nhan Loc Trading & Manufacturing Co,. Ltd Procter & Gamble Vietnam Song Hang Trading Co,. Ltd Kim Lien Trading Co,. Ltd

Brands

Country of origin

Nivea

Thailand

22,770,165

39.7%

Thailand

4,976,079

8.7%

Thailand

4,638,992

8.1%

J ohnson & J ohnson J ohnson & J ohnson for baby

Import value (USD)

Value share

Rexona, Axe

Australia, Philippines

2,176,072

3.8%

Babycare

China

1,892,874

3.3%

Glade

Thailand

1,453,920

2.5%

Leivy

Malaysia

1,443,425

2.5%

Amby, Gilette

Thailand, USA

1.284,506

2.2%

1,234,364

2.1%

757,018

1.3%

Dial

USA

Monsavon

Philippines


Over the forecast period, toiletries are expected to see marginal growth in constant value terms, mainly contributed by deodorants. Deodorants were inexpensive compared to other products in beauty and personal care, therefore people quickly adopted the use of deodorants in their day-to-day routine. This led to a saturated market. The working 17



professionals are already using deodorants, while manufacturers find it difficult to expand their consumer base to the lower incomes, as they are usually blue-collar workers. Whereas, bath and shower is predicted to see a slow growth in the incoming years on the ground that the market is already mature. 6.5. Colour Cosmetics

Colour cosmetics posted robust growth in 2010 before having a sharp decrease of 29% in the later year, due to local consumers tightening their beauty care expenditure under economy slowdown. It developed to become more diversified, with more products targeting different consumer segments. Consumers with different age, income and profession all had products for their segments. The most popular make-up trend was still the natural look, although the darker look trend was slowly becoming appealing to some. There were more celebrities performing with the darker make-up look. Consumers preferred products with skin protection benefits such as SPF, anti-ageing or skin brightening.


L’Oréal Vietnam led with 12.3% market share in 2011, followed by Chanel and Nivea with 8.7% and 7.5%, respectively. The company owned the L’Oréal Paris, Maybelline and Lancôme brands, which all had high ranking in colour cosmetics value share. The company did most of its advertising in magazines. The majority of its products were sold in department stores, some were sold in supermarkets and beauty retail shops. Since L’Oréal Vietnam was targeting mass to more high-end consumers, the distribution system was effective to position the company’s brands.

18



Comparison of colour cosmetics’ import value in 2009 and 2011

Country of origin

1 2 3 4 5 6 7 8 9 10

Korea (Republic) France Thailand China J apan United States of America Philippines United Kingdom Germany Italy

Value 2009 (USD)

Market share

Value 2011 (USD)

Market share

2009 -2011 Mkt. Share ∆

1,010,134 633,263 711,560 558,227 455,620

19.7% 12.4% 13.9% 10.9% 8.9%

1,465,324 1,255,557 689,499 610,856 606,039

23.9% 20.5% 11.3% 10.0% 9.9%

4.2% 8.2% -2.6% -0.9% 1.0%

543,652 162,761 67,212 226,670 137,746

10.6% 3.2% 1.3% 4.4% 2.7%

400,229 277,040 142,969 124,484 122,928

6.5% 4.5% 2.3% 2.0% 2.0%

-4.1% 1.3% 1.0% -2.4% -0.7%


Italy only made up a minor share with 2%, due to its limited availability in the market. At the present, there is only one Italian brand, named Pupa Milano with US$ 122,928 export revenue in 2011.


Colour cosmetics are expected to see a healthy growth over the forecast period, with a constant value CAGR of 6.1%. There are two reasons for this growth. Firstly, improved living standards and increasing disposable income will allow women to spend more on beauty products. Secondly, there is an increasing growing population of female working professionals, who are becoming more concerned about their looks.

19



7. Distribution 7.1. Channels

The cosmetic industry in Vietnam is supported by several types of distribution channels, which are divided into two categories. − Traditional retail channel: outdoor markets, grocery stores, traditional drug stores − Modern retail channel: convenient stores, specialized stores, supermarkets, hypermarkets, luxury department stores and modern pharmacies

Modern retail channels continued to outperform traditional channels such as independent small grocers and outdoor markets. Supermarkets or hypermarkets continued to post healthy growth in terms of facilities, numbers and coverage. This channel offered a better and more convenient shopping experience, with easy accessibility, competitive price, wide range of products and reliable product origins. Meanwhile, direct selling showed robust growth by the two most famous companies, Oriflame and Avon. Direct selling appealed to consumers as it provided better product information and customer service. Retail structure – Number of stores Channel

2009

2010

2011

537

642

811

89,584

91,515

97,221

Personal store

4,082

3,779

3,785

Market stall - mix business

3,378

3,138

3,207

Market stall - (health & personal care)

3,672

3,223

2,986

577

1,045

1,230

Pharmacy

9,010

10,114

11,119

Maternity & Baby shop

1,791

1,997

2,376

Modern trade (supermarkets, modern markets) Traditional grocery stores

Cosmetic store

Source: Vietnam Pocket Reference Guide 2012 - Nielsen

The modern supermarkets and convenient stores include many foreign stores like as J apan-based Family Mart, Malaysia-based Shop & Go, Germany-based Metro and France-based the Big C group among several others. Metro hypermarket, with its member based systems, is very popular in Hochiminh City and Hanoi. Under this scheme, customers can buy at a cheaper rate if they buy in bulk. Local supermarkets are regional. That is, they may be popular in Hochiminh City, but their operations are not as popular in other cities such as Hanoi. For instance, Fivimart and 20



Intimex are popular in Hanoi, but the Saigon Coop supermarket chain is more popular in Hochiminh City. Modern pharmacies and specialized cosmetic stores such as Medicare and Guardian are present in Vietnam with several outlets in Hochiminh City. There are only a few major distributors of cosmetic and beauty products in the whole of Country. Multinational corporations e.g. Unilever, Procter & Gamble, Beiersdorf distribute their own products. Smaller distributors are normally only strong in the regions that they are based in. They use different methods to distribute their products e.g. wholesaling, setting up stands in the supermarkets, department store or individual shops. 7.2. Margins

Foreign companies entering Vietnam need to be aware that the profit margins differ according their product, brand’s popularity and distributors’ relationship with the supermarkets or department stores. Normally, product margins for supermarket and pharmacies range between 15% to 25% across the board. Some of them demand distributors to provide additional discount budgets on top of the standard margins e.g. 4% as a discount budget every quarter yearly. 8. Regulation on cosmetics

On J anuary 25, 2011, the Ministry of Health issued Circular No. 06/2011/TT-BYT, replaced Decision No. 48/2007/QD-BYT dated 31/12/2007, regulating the management of cosmetic products manufactured in the country, as well as cosmetics imported for circulation in Vietnam. Circular 06 clarifies specific guidelines on the (i) notification of competent authorities on the distribution of cosmetic products, (ii) product information files, (iii) requirements on product safety, (iv) cosmetic labeling, (v) cosmetic advertisements, (vi) export and import of cosmetics, (vii) cosmetic samples for quality controls, (viii) examination, inspection and handling of violations, and (ix) responsibilities of organizations and individuals manufacturing, trading, and importing cosmetics, as well as the rights of consumers. 8.1.

Product proclamation

Organizations or individuals which are responsible of putting the cosmetic product on the market, are only permitted to sell cosmetics when the number of cosmetic product proclamation receiving by the authority agencies as well as responsible for safety, effectiveness, and quality of product, is issued within 03 working days since the receipt of valid registration dossier and of enough fees and charges The relevant authority for import products is the Medicine Management Bureau, the Ministry of Health. The authority agencies shall carry out after-sales inspection when the product has been being sold in the market. The distributing enterprise thereby takes full responsibilities for the safety, effectiveness and quality of the distributed product.

21



The cosmetic proclamation dossier includes the following documents. 1. Cosmetic product proclamation report (02 versions) with the proclamation data

(soft version of proclamation report); 2. Copy of business registration certificate of organizations, individuals who are

responsible for circulating the products in the market (with the enterprise’s signature and seal). In case the cosmetic domestic produced, but organizations, individuals who be responsible for putting products on the market are not the manufacturer must have a copy of business registration certificate of the producer (legally notarized); 3. Original or notarized copy of letter of attorney from the producers or the owners

of products authorized for organizations, individuals are responsible of putting products in the market in Vietnam (applied to the import or domestic cosmetic of which organizations or individuals are responsible of putting products on the market, be not the manufacturer). For the import product, the letter of attorney must be a copy notarized sign and consul legalized as provisions of law, except for being exempted of the consul legalization in regard to international treaties in which Vietnam is a member. The letter of attorney must satisfy requirements regulated at the Article 6 of this Circular. 4. Certificate of free sale (CFS) is only applied for import cosmetic product

proclamation, which satisfies the following requirements. a. CFS which is issued by the current territory must have been original or legally notarized and still in the day of validity. In case CFS is not provided of the expiry day, it must be a certificate, which has just been issued within 24 months. b. CFS must be consul legalized according to provisions of the law, except consul legalization immunity case according to the international treaties in which Vietnam is a member. 8.2.

Product information dossier

Every cosmetic product must get a Product Information File (PIF), when circulated in the market in accordance with ASEAN’s instruction, which is filed at the address of organizations, or individuals who are responsible for putting the products in the market.

22



The Product Information File includes the following parts. a. Part 1: Administrative documents and a summary of product; b. Part 2: Material quality; c. Part 3: Product quality; d. Part 4: Safety and efficiency. 8.3.

Safety requirements

The organizations or the individuals which sell the products in the market must guarantee that their products shall be harmless for people’s health when are used in normal or appropriate instructed conditions, propriety for the composed form, information on the label, instruction, special carefulness, and else which are supplied by the producer or the owner. The producer or owner must evaluate the safety property of every cosmetic product in accordance with the ASEAN safety property norm. The heavy metal limit and the microorganisms in the cosmetic must satisfy the ASEAN’s requirements regulated by the ASEAN Cosmetic Treaty (website: www.dav.gov.vn or www.aseansec.org). 8.4. Product labeling

The product label must be glued on the commodity, package of commercial article on a position, on which the regulated contents has to been seen easily, without disconnecting details or parts of the commodity. In case, the outward package is not permitted or impossible to be opened, there must be a label with the required information on the package. The cosmetic product’s label must be suitable for requirements for the cosmetic label writing set by The ASEAN. The following contents must be presented by Vietnamese or English languages, on the label. a. Product’s name and function b. Usage instruction c. Full formula ingredients d. Country of origin e. Name and the address of organizations or individuals who are responsible for putting products in the market (written fully in Vietnamese according to the business registration certificate or the investment permission certificate) f. Quantification, with weight or volume g. Product lot number

23



h. Date of expiry (for products with the stability below 30 months, the writing of expiry day is compulsory) i. Warning about safety for usage In case, the size, form, or packaging material cannot be printed with fully required information, the required contents have to be printed on the auxiliary label, attached with the product. The original label must figure out the position in which these contents are printed. The following information is compelled to be printed on label of the original product‘s packaging: a. Product’s name b. Product lot number 8.5.

Import regulation

Cosmetic products are permitted to be imported when having the valid cosmetic product proclamation receipt number by the Medicine Management department – the Ministry of Health. The import procedure is implemented at the Customs agency according to the current regulations. When implementing the import procedure, the product proclamation report has to be showed for the Customs agency. On May 6, 2011, the Ministry of Industry and Trade issued Decree No. 197/TB-BCT, regulating more conditions for the import of cosmetics, wines and mobile phones in Vietnam, with major changes as follows. 

Import document: Beside documents submitted for custom agencies when carrying

out the import procedure under current regulations, traders have to present Assignment Document or Letter of Attorney as the formal distributor and importer for production and business or agency contracts of the producer of those goods. These documents must have consular legalization by Vietnam representative of overseas diplomatic agencies. 

Import borders: Traders are only allowed to conduct import and clearance procedures

at international seaports of Hai Phong, Da Nang and Ho Chi Minh City. Import of cosmetics in some special situations is not obligated to implement the cosmetic product proclamation according to this Circular’s regulation. a. Organization or individual who imports cosmetic in order to study and experiment must send the cosmetic import bill used for studying and experiment to the Medicine Management department – the Ministry of Health. The maximum amount for each product is 10 patterns.

24



The cosmetic import bill, which is used for studying and experiment, is made into 03 versions. After approved, 02 versions are saved at the Medicine Management department, 01 version is sent back to the organization. The version which is sent back to the organization shall be sealed with “the version for sending to enterprise” in order to present to the customs agency when make customs clearance procedure. The cosmetic products, which are imported for studying, experiment, have to be used in the right purpose and not to permit to put on the market. b. The organizations, individuals who receive cosmetic as gifts must implement the import procedure at the customs agency as the regulations. The overall value of each gift receiving time is not to exceed the cargo quantum, which is exempted of the imposed tax in the current regulations. The import cosmetic patterns such as gifts shall be not permitted to put on the market. c. The organizations, individuals who imports cosmetic for displaying at fair, gallery and other temporary import for re-export situations must implement procedure of applying for temporary import for re-export license of the Ministry of Industry and Trade in accordance with the current regulations. 8.6. Customs procedures

On August 1, 2008, Ministry of Industry and Trade issued Decision No. 24/2008/QD-BCT on the application of automatic import licensing to some commodity items. Accordingly, cosmetics are products subjected to automatic import licensing and must have automatic import certificate issued by Ministry of Industry and Trade in the form of certification of a trader’s registration of import for each lots of goods. Although the decision was terminated on December 31, 2008, another circular 17/2009/TT-BCT was issued by Ministry of Industry and Trade on December 12, 2008, to provide guidelines for the implementation of automatic import licensing applied to some commodity items. Therefore, the import of cosmetic products and some others has being conformed to this automatic import licensing since 2009. Dossiers (of application for licensing) shall be sent by post or directly submitted to the correspondence bureau of the Ministry of Industry and Trade or to receipt points in Ho Chi Minh City. Within 10 working days after receiving valid dossiers, Department of Import and Export of Ministry of Industry and Trade shall grant trader the automatic import license. Dossier of application for automatic import licensing comprises: a. A written application for automatic import registration b. The business registration certificate (appended with the trader’s true copy mark), for traders that register for the first time c. The import contract: one copy (appended with the trader’s true copy mark) 25



d. L/C, payment document or the bank’s payment certification (appended with the trader’s true copy mark) e. Bill of lading or transportation document for the goods lot (appended with the trader’s true copy mark) f. The report on the import situation of goods lots licensing (if any) by the Ministry of Industry and Trade, enclosed with the customs declarations certifying the actual imported amount of the goods lots (appended with the trader’s true copy mark) In case, the Customs declaration certifies time-based import registration (products imported from non-tariff areas) importers do not have to submit Bill of lading or transportation document but report on the import situation for goods lots of the previous certified application for import licensing. 8.7.

Tax

Both domestic and imported cosmetic products are subject to Value Added Tax (VAT). Besides, imported and exported cosmetic products are also subjected to import and export tax. Value Add ed Tax (VAT)

Pursuant to regulations of the Law on Value Added Tax 2008 and guiding documents, imported cosmetic products in Vietnam are not subject to VAT in the following cases: − Being humanity aid, non-refunding aid; gifts for state agencies, political organizations, socio-political organizations, etc.; − Goods delivered through border gate into Vietnam, or in transit through the territory of Vietnam; goods which are temporarily imported and then re-exported; goods which are temporarily exported and then re-imported; − Materials are used to produce and processe goods for export under contracts of manufacturing and processing for export signed with foreign parties;

Apart from the above-mentioned cases, imported cosmetics in Vietnam are subject to 10% of VAT. Import tax

Imported cosmetic products in Vietnam shall be applied preferential tariff by regions or non-regions: − The CEP T preferential tax rate for ASEAN − The AKFTA preferential tax rate for ASEAN – Korea Free Trade Area − The ACFTA preferential tax rate for ASEAN – China Free Trade Area 26



− The AJ CEP preferential tax rate for ASEAN – J apan Free Trade Area − Preferential import tax rate for non-regions

27



9. Market data Table 1. Export volume by product categories (US$) HS Code

2008

3303

4,351,799

3,715,986

3,844,312

5,354,314

3304

1,331,881

5,758,349

8,813,142

9,415,295

3305

6,633,205

7,617,539

20,705,691

43,717,826

3307

20,820,249

19,573,888

27,428,649

45,806,869

2009

2010

2011

Total 33,137,135 36,665,762 60,791,794 104,294,304 Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

Table 2. Export volume by product categories (%)

HS Code

2009

2010

2011

3303

10%

6%

5%

3304

16%

14%

9%

3305

21%

34%

42%

3307

53%

45%

44%

Total 100% 100% 100% Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

28



Table 3. Import value by Top 10 Countries of Origin (US$) Country

2009

2010

Thailand

52,766,879

58,818,058

77,591,365

Malaysia

20,423,598

23,655,019

19,147,716

France

14,602,487

18,363,912

19,094,317

Korea (Republic)

8,126,249

11,351,268

10,642,006

China

4,832,697

4,013,611

9,502,363

10,574,232

12,865,225

9,365,018

6,316,571

7,874,581

6,228,562

J apan

4,579,947

8,485,362

5,957,819

Italy

3,362,888

4,779,744

5,832,667

Indonesia

2,365,034

3,222,691

2,806,421

14,622,804

18,759,470

16,228,554

United States of America Philippines

Others

2011

Total 142,573,386 172,188,942 182,396,807 Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

Table 4. Import value share of Top 10 Countries of origin (%) Country

2009

2010

2011

Thailand

37.01%

34.16%

42.54%

Malaysia

14.32%

13.74%

10.50%

France

10.24%

10.66%

10.47%

Korea (Republic)

5.70%

6.59%

5.83%

China

3.39%

2.33%

5.21%

United States of America

7.42%

7.47%

5.13%

Philippines

4.43%

4.57%

3.41%

J apan

3.21%

4.93%

3.27%

Italy

2.36%

2.78%

3.20%

Indonesia

1.66%

1.87%

1.54%

10.26%

10.89%

8.90%

100%

100%

100%

Others Total


29



Table 5. HS Code 3303 (Perfumes) Import value by Top 10 Countries of Origin (US$) Country

2009

2010

2011

France

7,606,969

6,677,338

8,531,734

Philippines

1,219,098

2,153,420

2,259,835

Italy

569,707

820,122

1,310,038


706,785

869,917

975,350

Indonesia

867,364

809,226

798,644

United Kingdom

321,131

505,652

532,722

Spain

207,900

307,475

391,109

China

92,747

245,935

380,121

Others

594,421

1,425,475

1,327,444


Table 6. HS Code 3303 (Perfumes) Value share by Top 10 Countries of Origin (%)

Country

2009

2010

2011

France

62.42%

48.34%

51.69%

Philippines

10.00%

15.59%

13.69%

Italy

4.68%

5.94%

7.94%


5.80%

6.30%

5.91%

Indonesia

7.12%

5.86%

4.84%

United Kingdom

2.64%

3.66%

3.23%

Spain

1.71%

2.23%

2.37%

China

0.76%

1.78%

2.30%

Others

4.88%

10.32%

8.04%

Total 100% 100.01% 100% Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

30



Table 7. HS Code 3304 (Skin care, Body care, Facial care) Import value by Top 10 Countries of Origins (US$) Company

2009

2010

2011

Thailand

26,239,969

29,666,383

37,332,516

France

5,659,447

9,753,751

8,799,434

Korea (Republic)

6,278,299

8,535,967

7,878,272

3,013,591

6,382,787

3,895,387


5,424,929

5,717,448

3,702,125

China

1,027,146

1,880,764

2,009,328

12,978

63,787

1,439,945

Malaysia

1,340,810

2,284,104

1,379,488

Philippines

1,373,080

2,043,805

1,241,614

589,802

968,077

9,298,586

10,415,587

J apan

Hong Kong

Italy

Others

555,240

7,407,051


Table 8. HS Code 3304 (Skin care, Body care, Facial care) Value share by Top 10 Countries of Origins (%) Company

2009

2010

2011

Thailand

43.55%

38.17%

49.36%

France

9.39%

12.55%

11.63%

10.42%

10.98%

10.42%

5.00%

8.21%

5.15%


9.00%

7.36%

4.89%

China

1.70%

2.42%

2.66%

Hong Kong

0.02%

0.08%

1.90%

Malaysia

2.23%

2.94%

1.82%

Philippines

2.28%

2.63%

1.64%

Italy

0.98%

1.25%

0.73%

15.43%

13.40%

9.79%

Korea (Republic) J apan

Others

Total 100% 100% 100% Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data

31



Table 9. HS Code 3305 (Hair Care) Import value by Top 10 Countries of Origin (US$) Company

2009

2010

16,412,812

16,054,917

14,194,914

Italy

2,037,167

2,847,380

3,706,805


3,052,708

3,899,489

2,667,276

Malaysia

2,510,117

3,853,970

2,539,245

China

2,186,609

5,611

2,422,059

Korea (Republic)

1,508,232

2,411,095

2,063,588

527,282

784,527

1,367,025

J apan

961,111

1,395,134

1,190,899

Spain

1,364,682

972,085

684,372

395,689

934,424

594,401

1,326,459

3,874,002

1,856,792

37034644.46

33289387.16

Thailand

Germany

Indonesia Others Total

32,282,867

2011


Table 10. HS Code 3305 (Hair care) Value share by Top 10 Countries of Origin (%) Company

2009

2010

2011

Thailand

49.31%

43.35%

42.64%

Italy

6.12%

7.69%

11.14%


9.17%

10.53%

8.01%

Malaysia

7.54%

10.41%

7.63%

China

6.57%

0.02%

7.28%

Korea (Republic)

4.53%

6.51%

6.20%

Germany

1.58%

2.12%

4.11%

J apan

2.89%

3.77%

3.58%

Spain

4.10%

2.62%

2.06%

Indonesia

1.19%

2.52%

1.79%

Others

3.98%

10.46%

5.58%

100.00%

100.00%

100.00%

Total

Source: ICE Hochiminh processing of General Department of Customs of Vietnam’s data 32



Table 11. HS Code 3307 (Toiletries, Shaving and Bath Preparations, Deodorants) Import value by Top 10 Countries of Origin (US$) Company

2009

2010

2011

Thailand

10,108,873

13,076,160

26,030,102

Malaysia

16,572,660

17,207,518

15,157,489

China

1,526,196

1,881,301

4,690,855

Philippines

3,712,454

3,576,340

2,626,277


1,389,810

2,378,371

2,020,267

France

963,641

1,277,879

1,173,797

Australia

119,047

531,692

772,867

Indonesia

466,590

497,621

703,593

Korea (Republic)

320,166

393,799

670,095

J apan

594,344

630,255

602,565

Italy

166,213

144,165

260,584

37,845,761

43,629,243

56,962,033

Total


Table 12. HS Code 3307 (Toiletries, Shaving and Bath Preparations, Deodorants) Value share by Top 10 Countries of Origin (%) Company

2009

2010

2011

Thailand

26.71%

29.97%

45.70%

Malaysia

43.79%

39.44%

26.61%

China

4.03%

4.31%

8.24%

Philippines

9.81%

8.20%

4.61%


3.67%

5.45%

3.55%

France

2.55%

2.93%

2.06%

Australia

0.31%

1.22%

1.36%

Indonesia

1.23%

1.14%

1.24%

Korea (Republic)

0.85%

0.90%

1.18%

J apan

1.57%

1.44%

1.06%

Italy

0.44%

0.33%

0.46%

100.00%

100.00%

100.00%

Total


33



10. Three-year forecast by category

Table 1. Sales forecast of cosmetics in Vietnam (Million US$) Company

2012

2013

2014

Perfumes

15.0

16.0

17.0

Make-up

17.5

18.6

19.7

166.8

177.3

188.4

15.2

16.1

17.1

Hair care

167.4

178.0

189.1

Toiletries

54.3

57.7

61.3

436.2

463.5

492.7

Skin care & Body care Nail

Total

Source: ICE Hochiminh’s estimates

Table 2. Forecast of cosmetics’ production value in Vietnam (Million US$) Company

2012

2013

2014

Perfumes

26.8

27.9

29.1

Make-up

46.9

48.9

51.0

0.7

0.7

0.7

48.3

50.3

52.5

Hair care

107.3

111.9

116.6

Toiletries

166.0

173.0

180.4

395.9

412.7

430.3

Skin care & Body care Nail

Total


34



Table 3. Forecast of cosmetics’ export value into Vietnam (Million US$) Company

2012

2013

2014

Perfumes

19.1

22.1

25.6

Skin care, body care, facial care

84.2

93.8

104.5

Hair care

33.8

34.3

34.8

68.6

82.6

99.5

205.8

232.9

264.5

Toiletries, bath preparation, deodorants

Total


Table 4. Forecast of cosmetics’ import value from Vietnam (Million US$) Company

2012

Perfumes

2013

2014

6.3

7.5

8.9

Skin care, body care, facial care

11.7

14.6

18.2

Hair care

84.9

153.5

287.6

65.3

93.0

132.6

168.3

268.6

447.2

Toiletries, bath preparation, deodorants

Total


35



11. Import rates by HS Codes Code

1

DESCRIPTION

2 3 4 5

6

A A P A A T I N G T E T T F C F F N F I C J K I U M T A A A A A

7

8

3303 00 00 00 00 Perfumes and toiolet waters. kg 22 3304

A P E J V

A T VAT F Z (%) N A A

9 10 11 12 13 14 15 16 0 25 21

-

26 27 25 10

Beauty or make up perparations and preparations for the care of the skin (other than medicaments), including sunscreen or sun tan prearations; machine or pedicure preparations.

3304 10 00 00 00 Lip make up preparations

kg 30

0 25 28

-

26 36 35 10

3304 20 00 00 00 Eye make up preparations

kg 31

0 25 28

-

26 36 35 10

3304 30 00 00 00 Manicure and pedicure preparations

kg 24

0 25 21

-

26 27 25 10

kg 31

0 25 28

-

26 36 35 10

3304 99 20 00 00 Anti-ance creams

kg 12

0 15 10

-

13 14 15 10

3304 99 30 00 00 Face and skin creams and lotions

kg 22

0 25 21

-

26 27 25 10

3304 99 90 00 00 Other:

kg 22

0 25 21

-

26 27 25 10

3305 10 00 10 00 Anti-mycosis shampoos

kg 15

0 15 10 15 13 14 15 10

3305 10 00 90 00 Other:

kg 25

0 25 10 25 13 14 35 10

3305 20 00 00 00 Preparations for permanent waving or straightening

kg 20

0 25

3305 30 00 00 00 Hair lacquers

kg 20

0 25 21 20 26 27 25 10

3305 90 00 00 00 Other:

kg 24

0 25 21

Other: 3304 91 00 00 00 Powders, whether or not compressed 3304 99

Other:

3305

Preparation for use on the hair

3305 10 00

Shampoos

-

26 32 35 10

26 27 25 10

36



3305 90 00 00 10

kg 24

0

27

10

3305 90 00 00 90 Other:

kg 24

0

28

10

3307 10 00 00 00 Pre-shave, shaving or aftershave preparations

kg 30

0 25 28

3307 20 00 00 00 Personal deodorants and antiperspirannts

kg 27

0 25 28 25 26 36 35 10

3307 30 00 00 00 Perfumed bath salts and other bath preparations

kg 27

0 25 28

3307 90 00 00 00 Other:

kg 20- 0 25 28 25 26 36- 35 10 30 37.5

3307

Pre-shave, shaving or aftershave preparations, personal deodorants, bath preparations, delilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties. -

-

26 36 35 10

26 36 35 10

Notes: − MFN: Most Favored Nation − ATIGA: ASEAN in Trade Goods Agreement − ACFTA: ASEAN – China Free Trade Agreement − AJ CEP: ASEAN – J apan Closer Economic Partnership − AKFTA: ASEAN – Korea Free Trade Agreement − AIFTA: ASEAN – India Free Trade Agreement − VJ EPA: Vietnam – J apan Economic Partnership Agreement − AANZFTA: ASEAN – Australia – New Zealand Free Trade Agreement − VAT: Value Added Tax * On J une 26, 2012, EU and Vietnam launched negotiations for a comprehensive Free Trade Agreement. Both sides seek for a comprehensive agreement covering tariffs, nontariff barriers as well as commitments on other trade related aspects, notably procurement, regulatory issues, competition, services, and sustainable development.

37



12. List of major importers and distributors of cosmetics in Vietnam AN THINH PHAT TRADING COMPANY LIMITED

ATP Building, 56/1 Tran Quang Dieu, O Cho Dua Ward, Dong Da District, Hanoi, Vietnam Tel: (84.4) 3766 5129 – 3766 5169 Fax: (84.4) 3766 5216 E-mail: [email protected] Website: n/a Main activities

Importer and distributors of cosmetic products for hair such as Artego (Italy), Livegain (Korea) and Pola (J apan) Firm profile

Year of founding: Legal form: No. of employees:

2001 Limited Liability 100

Data on contact

Title: Last and first name: Email: Cell phone: Title: Last and first name:

General Director Mr. Hoang Thanh Son

[email protected] +84 903 226 281 Vice General Director Mrs. Nguyen Hong Ngoc

SALONZO COSMETICS COMPANY

192 Mai Anh Tuan Street, Ba Dinh District, Ha Noi Tel: (84.4) 3519 0242 Fax: (84.4) 3519 0243 Web: www.salonzo.com Email: [email protected] Main activities

Importer and distributors of cosmetic products for hair such as Alfaparf Milano, SalonzoOyster (Italy) and Alonzo (Australia) Firm profile



Data on contact

Title: Last and first name: Email: Cell phone:

Director Mr. Tran Hoan Sinh

[email protected] +84 914 383 846

38



GLOBAL IDEA COMPANY LIMITED

16/8 117 Lane, Thai Ha Street, Dong Da District, Hanoi Tel: (84.4) 3537 6626 – 3537 6628 Fax: (84.4) 3537 6625 E-mail: [email protected] Website: www.inebrya.it Main activities

Importer and distributors of cosmetic products for hair, under brand name of Inebrya (Italy) Firm profile



Data on contact


Director Mrs. Vu Ngoc Quyen


PERFECT BEAUTY COMPANY LIMITED

Ngoi Sao Xanh Building, 57 Xa Dan 2 Street, Dong Da District, Hanoi Tel: (84.4) 2246 6407 – 2246 6409 – 2246 6410 Fax: (84.4) 3719 1092 Web: www.perfectbeauty.com.vn Email: [email protected] Main activities

Importer and distributors of cosmetic products for hair, under brand name of Elgon and Brelil (Italy) Firm profile



Data on contact

Title: Last and first name: Cell phone:

Business Director Mr. Tran Binh (Eric)

+84 903 455 571

39



MIRATO VIETNAM JOINT STOCK COMPANY

57 Tue Tinh Street, Hai Ba Trung District, Hanoi Tel: (84.4) 6282 7676 Fax: (84.4) 6282 7711 Email: [email protected] Website: www.mirato.vn Main activities

Importer and distributors of cosmetic products for hair, skincare and toiletries, under brand name of Mirato (Italy) Firm profile


2010 Share holding 20

Data on contact

Title: Last and first name: Email: Mobile:

Vice General Director Mr. Vu Huu Hung


S-NET VIETNAM JOINT STOCK COMPANY

169B Nguyen Thai Hoc Street, Ba Dinh District, Hanoi Tel: (84.4) 3734 7502 Fax: (84.4) 3734 7501 Email: [email protected] Website: www.cosmart.com.vn Main activities

Importer and distributors of cosmetic products for hair, under brand name of Phytos and Farma Vita (Italy) Firm profile


2008 Share holding 30

Data on contact

Title: Last and first name: Email:

Assistant to Director Ms. Nguyen Huong

[email protected]

40



TITITI COSMETICS COMPANY LIMITED

Office: 66 HOA CUC, WARD 7, PHU NHUAN DISTRICT, HOCHIMINH CITY Tel: (84.8) 3517 2259 – 2228 5427 – 3878 4212 Web: www.affinage.com E-mail: [email protected] Main activities

Distributor of hair care products under brand name of Affinage (Australia) Firm profile


2004 Private Over 20

Data on contact

Title: Last and first name: Email: Mobile:

Director Mr. Le Trong An

[email protected] 84 916 006 006

NAM TRAN PHARMA TRADING COMPANY LIMITED

Office: 21 HA HUY TAP STREET, PHU MY HUNG TOWN, TAN PHONG WARD, DISTRICT 7, HOCHIMINH CITY Tel: (84.8) 5412 1664 Fax: (84.8) 5412 1665 Web: www.namtranpharma.com Email: [email protected] Main activities

Distributor of hair care cosmetic products under brand name of Foltène (Italy) Firm profile



Data on contact

Title: Last and first name:

General Director Mr. Pham Tam Hoang

41



CREATIVE NATURE GROUP

Office: 10A1 LY NAM DE, HOAN KIEM DISTRICT, HANOI Tel: (84.4) 3747 4179 - 37474190 Fax: (84.4) 3747 4178 E-Mail: [email protected] Website: www.davines.com Activity

Exclusive distributor of Davines (Italy) hair care cosmetic products in Vietnam Firm profile

Year of founding: Legal form: Number of employees:


Data on contact


OPERATION DIRECTOR Mr. Pham Trong

[email protected]

NAM DAO COMPANY LIMITED

777 Le Hong Phong Street, Ward 12, District 10, Hochiminh City Tel: (84.8) 3862 6288 Fax: (84.8) 3862 9898 E-Mail: [email protected] Website: www.namdao.com.vn Activity

Exclusive distributor of Wella (United States) hair care products, Systems Professional and Clairol skin care products in Vietnam Firm profile



Data on contact


GENERAL DIRECTOR Mrs. Nguyen Thuy Lieu

42



FOUR SEASONS COMPANY LIMITED

Office: 182 A, NGUYEN VAN TROI, WARD 8, PHU NHUAN DISTRICT, HOCHIMINH CITY Tel: (84.8) 3997 9926 – 3997 9928 Fax: (84.8) 3979 9889 Web: http://fourseasons.com.vn E-mail: [email protected] Main activities

Exclusive distributors for Pevonia Botanica (USA) professional cosmetics for spas and home uses Firm profile


2007 100% Vietnamese limited liability company Over 20

Data on contact


Director Ms Quach Kim Mai

NATURAL JOINT STOCK COMPANY

Office: 234 NGO TAT TO, WARD 22, BINH THANH DISTRICT, HOCHIMINH CITY Tel: (84.8) 3514 2882 Fax: (84.8) 3514 2883 Web: www.spasvietnam.com Email: [email protected] Main activities

Exclusive distributors for Harn & Thann (Thailand) professional cosmetics for spas and home uses Distribution network: retail stores in shopping centers, spas in hotels and resorts and day spas Firm profile



Data on contact


Managing Director Mrs. Nguyen Ngoc Lan

[email protected]

43



PHU THANH COSMETICS TRADING PRODUCTION COMPANY LIMITED

Office: 282/48 BUI HUU NGHIA, WARD 2, BINH THANH DISTRICT, HOCHIMINH CITY Tel: (84.8) 2247 9947 Fax: (84.8) 3551 0540 Web: www.phuthanhdistributor.com E-mail: [email protected] Main activities

Distributor of cosmetic products for baby care, paraffin, looking for skin care, body care and spa products Market coverage: wholesale, retail and department stores Firm profile



Data on contact

Title: Last and first name: Mobile:

Director Mr. Tran Huu Chan

84 903 996 818

VIET LOTUS COMPANY LIMITED

Office: 294 - 296 HAI BA TRUNG, TAN DINH WARD, DISTRICT 1, HOCHIMINH CITY Tel: (84.8) 3829 3105 Fax: (84.8) 3820 9873 Web: www.thefaceshop.com Email: [email protected] Main activities

Exclusive distributor of The Face Shop cosmetic products from South Korea Market coverage: wholesale, retail and department stores Firm profile



Data on contact

Title: Last and first name: Cell phone:

Managing Director Ms Huynh Thanh My

84 909 193 922

44



VINH HANH COMPANY LIMITED

Office: 11 STREET 55A, QUARTER 9, TAN TAO WARD, BINH TAN DISTRICT, HOCHIMINH CITY Tel: (84.8) 3754 5259 Fax: (84.8) 3754 5258 Email: [email protected] Main activities

Distributor of hair care, body care, facial products; looking for a renowned Italian cosmetic brand Market coverage: wholesale and retail Firm profile



Data on contact


Director Mr. Nguyen Tang Vinh

[email protected] 84 903 316 678

KY PHONG IMPORT - EXPORT & TRADING COMPANY LIMITED

Office: 1/24/14A ROAD NO.2, GO VAP DISTRICT, HOCHIMINH CITY Tel: (84.8) 5427 3110 Fax: (84.8) 5427 3110 Web: www.lanopearl.com.au Email: [email protected] Main activities

Importer and distributor of Lanopearl cosmetic products from Australia Market coverage: wholesale, retail store and supermarket Firm profile



Data on contact


Executive Director Mr. Tu Thanh Phong

84 122 475 2812

45



DAICATA INTERNATIONAL COMPANY LIMITED

Office: 88 BA THANG HAI, DISTRICT 10, HOCHIMINH CITY Tel: (84.8) 3868 2994 Fax: (84.8) 3868 2997 Web: www.daicata.com Email: [email protected] Main activities

Distributing cosmetic products from Korea under brand names of IASO and She Spa Market coverage: wholesale, retail store, supermarket and spa Firm profile



Data on contact


Vice-Director Mrs. Pham Phong Lan

84 918 907 336

THUY DUONG TRADING CO., LTD

Office: 240TER TRAN HUNG DAO STREET, NGUYEN CONG TRU WARD, DIST. 1, HOCHIMINH CITY, VIETNAM Tel: (84.8) 3838 5017 Fax: (84.8) 3838 5018 E-Mail: [email protected] - [email protected] Activity

Importer and distributor of cosmetics, salon and spa products under brand names of Avene and Elancy (French) Annual turnover: more than 1.5 million USD Firm profile


1999 Private 52

Data on contact


GENERAL DIRECTOR Ms. DUONG HONG BICH THUY

46



THUY LOC TRADING CO., LTD

Office: FLOOR 8, SAIGON PARAGON BUILDING, 3 NGUYEN LUONG BANG, DISTRICT 7, HOCHIMINH CITY, VIETNAM Tel: (84.8) 5410 2102 Fax: (84.8) 5416 0360 E-Mail: [email protected] Website: www.thuyloc.com.vn Activity

Importer and distributor of cosmetics, salon, spa and hair products and beauty accessories Annual turnover: more than 5 million USD Brands

Shiseido, Cle De Peau Beaute’ (J apan), L’occitane (French), ZA, BPI (Korea) Firm profile


1996 Private Approx. 100

Data on contact


GENERAL DIRECTOR Mrs. LE HOAI ANH

C.T. GROUP

Floor 2, 139 PASTEUR, DISTRICT 1, HOCHIMINH CITY, VIETNAM Tel: (84.8) 2242 8253 Fax: (84.8) 6297 2000 E-Mail: [email protected] Website: www.ctgroupvietnam.com Activity

Importer and distributor of consumer goods, cosmetics and equipments; Brands: Laneige (Korea), Lolita Lempicka, Guess, Police, OPI, Red Earth, Zirh Firm profile


1992 J oint Stock More than 1,044 in 32 branch companies

Data on contact


Assistant to General Director Mr. NGUYEN QUANG HOANG LONG

84 989 309 080

47

Market research on Vietnamese Cosmetics_Final_Light versio…

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