The Vietnamese cosmetics industry needs a makeover

Cosmetics made locally are unable to compete with products made cheaply by Vietnam’s near neighbors never mind more exclusive western brands.

According to Nguyen Thi Kim Thoa, chairwoman of the HCM City Cosmetics Association, 90 percent of cosmetics products on the domestic market are imports.

Domestically made products can’t even compete on sale price, since Chinese and Thai made products are cheaper still.

Phan Thi Viet Thu from the HCM City Customer Protection Association also says Vietnam’s cosmetics cannot compete in the high grade market segment which is dominated by imports from Japan, Europe and the US.

Most of domestic producers focus on competing on the popular lower end of the market. However, the problem remains that production costs of domestic products are nearly the same as that of big brand names.

Besides, as Vietnamese enterprises do not have budgets for big advertising campaigns, they still cannot target more affluent customers.

With 20 year of experience in trading cosmetics at Pham Van Hai Market, Luu Thi Lien Huong said domestic products are not chosen by customers because producers do not pay attention to the packaging and do not make sufficient investment in assisting retailers.

Huong also said counterfeit goods are killing domestic products. Counterfeit products can appear on the market very quickly, especially skin and shower cream.

In the first 10 months of 2009, the HCM City Market Control Sub-agency discovered 91 cases of violating laws in producing and trading cosmetics. A lot of counterfeit goods have been discovered entering the country from China and Thailand.

According to the HCM City Cosmetics Association, the quality of made in Vietnam cosmetics is in no way inferior to imports. Saigon Cosmetics products, Da Lan toothpaste and Thorakao skin cream, for example, have been exported to the Middle East, Japan, the US, China and Cambodia.

Therefore, experts believe that the key to helping domestic producers to compete with imports is to settle problems in the distribution and improve marketing skills.

VietNamNet/SGTT

Tags: Vietnamese cosmetics industry