BW Confidential - Issue #12 - November/December 2012 - 97

of wine, cosmetics, spare parts, cell phones confiscated in the first six months of the year. “One thing hurting in Vietnam is that there are too many fake products. The government has to be tough on those making or selling fake products and the public has to be educated not to buy these,” observes Alain Khaiat, vice president of the ASEAN Cosmetics Association. The retail road The retail market is growing fast and organized retail is beginning to replace the older style markets. However, much of the new organized retail is in the form of smaller stores which are founded with a modest capital investment (55% of retailers have a capital of less than VND100m /$4,800), according to the Vietnam Retailers’ Association. In addition to the 9,000 traditional

• Beauty sales 2011: $716.3m, +12.9% vs 2010 • Premium beauty sales 2011: VND792.1bn ($38.02m), +12.3% vs 2010 • Premium beauty sales by category: skincare VND300bn($14.40m), +12% vs 2010; fragrance VND170bn ($8.16m), +7% vs 2010; color cosmetics VND130bn ($6.24m), +14% vs 2010; haircare VND80bn ($3.84m), +10% vs 2010 • Main shopping malls: Vincom Center (2 malls, 1 in Ho Chin Minh City and 1 in Hanoi) Parkson (2 Parkson centers; department stores: 9 stores, 6 in Ho Ho Chin Minh City and 3 in Hanoi); Picomall (1 in Hanoi); Crescent Mall (Ho Chi Minh City); Diamond Plaza (departmentstore style mall)
Source: Euromonitor, industry sources

Vietnam beauty market

“

There is all this talk about the BRIC countries, but look at Vietnam: retail revenues are up by 30% in the first half of this year compared to the same period in the previous year and beauty sales growth is in double digits

Independent analyst Nguyen Cao

stores, there are now also supermarkets, shopping malls, and convenience stores. Driving growth is the expansion of malls and department stores in the country. However, it is hard to find large spaces for malls in the inner parts of the country’s main cities, as in around the prestigious and central Hoan Kiem Lake area in Hanoi, and as a result many of the new malls are being built in the suburbs. Beauty sections in the malls are often made up of an entire floor area with standalone branded stores or family owned stores which bring together a selection of premium fragrances. This is in lieu of large

”

perfumery concepts and affords personalized attention and a sense of familiarity to Vietnamese shoppers. Vincom, one of the biggest retailers in Vietnam, which has a market capitalization of VND53,840bn ($2.56bn) is the largest listed real estate and tourism company in Vietnam. Vincom Center, which is located in the heart of Ho Chi Minh City opened in 2010 and is known for its premium brands. Hanoi also got a taste of luxury retail with the opening of Vincom Center Long Bien on December 26, 2011 with total area of 45,000m2 (484,376ft2). Parkson, a 25-year-old Malaysian retailers, which manages malls and runs a department store chain launched in Vietnam in 2005 in Ho Chi Minh City and now has more than half a dozen stores. Two new Parkson stores will open in Ho Chi Minh City by 2013. Premium beauty has been thriving at Parkson. “Vietnam is considered as a promising market for foreign brands and over the past year more foreign brands have come to the market. There are about 500 stores in two Parkson centers in Hanoi. Malls are a good choice to showcase premium products,“ says Hoàng Thi Lê, sales team leader of Parkson Keangnam, Hanoi. Top beauty brands at Parkson include: Estée Lauder, Lancôme, Kanebo, Bobbi Brown, La Mer and Lab Series. Another Malaysian company, WCT Group is planning the Platinum Plaza shopping mall project in Ho Chi Minh City. Meanwhile, Japanese retailer Aeon Group entered the market this March and has plans to open 20 retail centers by 2020. Their first opening, which they say will be the largest department store in Vietnam, is scheduled to launch in Ho Chi Minh City in

2014 with an estimated investment of $100m. “Vietnam is attracting much foreign investment and will become one of developed hubs of Asia,” says Motoya Okada, managing director of Aeon Group. According to the ministry of industry and trade, the retail market will grow at an average of 20-25% until 2015. It is expected that there will be 1.9 million square meters of retail space in Hanoi alone in this time. However, despite this there is a somewhat gloomy environment at the moment when it comes to retail, as there have been lower occupancy rates in some malls, which has seen rents fall. However, in the long term as new retail spaces are built, driven by more premium malls along with supermarket concepts, beauty areas are expected to increase, which could lead to an important growth curve for the category. n

Vietnam top beauty & personal-care players 2010 by market share Company Market share % Unilever P&G L’Oréal Vietnam Johnson & Johnson Beiersdorf LG Vina Cosmetics Shiseido Elizabeth Arden Estée Lauder Clarins
Source: Euromonitor

31.8 11.3 3.9 2.9 2.5 2.4 1.8 0.3 0.2 0.1 97

November-December 2012 - N°12 - BW Confidential

BW Confidential - Issue #12 - November/December 2012

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