Hair Care in Vietnam Analysis [PDF]

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HAIR CARE IN VIETNAM - ANALYSIS Country Report | Jun 2019

HEADLINES

Market Sizes

Current value sales of hair care rise by 5% to reach VND14.9 trillion in 2018

Sales of Hair Care

Natural and organic products become product trends

Retail Value RSP - VND billion - Current - 2004-2023

Salon professional hair care sees highest unit price increase and second-highest value growth in 2018

14,960

Forecast

20,000

Unilever Vietnam International maintains its lead with a value share of 36% in 2018 Hair care is predicted to increase at a current value CAGR of 5% (1% 2018 constant value CAGR) over the forecast period to reach VND19.2 trillion in 2023

15,000

PROSPECTS 10,000

Natural and herbal hair care becomes a trend in 2018 In 2018, both manufacturers and Vietnamese consumers paid great attention to herbal and naturally positioned products due to consumers’ increasing interest in health and wellbeing. Moreover, since air and water pollution has become more serious in Vietnam, more and more consumers are willing to spend on natural and herbal products for hair care treatment such as for dandruff and moisturising. Following this trend, many new brands offering natural or herbal ingredients were launched, such as shampoos Thai Duong 3 and Thai Duong 7 (Sao Thai Duong), which Vietnamese consumers eagerly welcomed due to their containing traditional herbal ingredients specifically for dandruff treatment. Indeed, Sao Thai Duong was listed amongst the top 10 most reliable local brands in 2018.

Sales Performance of Hair Care

Environmental pollution and higher awareness will invite further demand

4.6%

5,000

0

2004

2018

% Y-O-Y Retail Value RSP Growth 2004-2023

Forecast

20%

Over the forecast period, demand for natural and herbal hair care is predicted to keep growing gradually due to increasing environmental pollution and Vietnamese consumers’ higher awareness. Despite its higher price, more people will prefer natural and herbal hair care products to traditional ones because they strong believe in the benefits that herbal properties can bring. Unilever and other major players are expected to launch new product lines containing natural and herbal ingredients such as grapefruit or multiflorous knootweed over the forecast period in order to respond to higher demand from Vietnamese consumers.

Unauthorised products have negative effect on performance of hair care In the review period, the volume of unauthorised products entering the Vietnamese marketplace increased considerably, together with higher demand for hair care products in the country. Although there is a plethora of hair care products available in the legitimate retailing market, a significant number of Vietnamese consumers prefer purchasing the unauthorised products due to their strong belief in the quality of imported products from developed countries such as US, Korea or Japan. In Vietnam, this trend has had a negative effect on value growth of hair care for several years. However, as the government succeeds in controlling the volume of unauthorised imports and requires small online companies or individuals to pay taxes if they want to continue doing business, value sales of legitimate products will likely improve.

2023

15%

10%

5%

0%

2004

2018

2023

COMPETITIVE LANDSCAPE Unilever Vietnam International maintains its leading position In 2018, Unilever Vietnam continued to hold the leading retail value share in hair care. The company is noted for its leading hair care brands such as Clear, TRESemmé, Sunsilk, Dove and Lifebuoy. These brand names have been in Vietnam for a long time and most Vietnamese consumers consider them reliable. Although hair care is experiencing a slower growth pace than before, the company expects to maintain its position in the category by investing in dynamic marketing activities and developing new products. For example, the company organised a music festival named Ravolution to advertise its Clear brand and had welcomed over 40,000 people to the festival by the end of June 2018. Over the forecast period, the company is predicted to witness healthy growth with the launch of its new brand named Bountique, which contains natural and herbal

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ingredients following the trend mentioned above.

Sales of Hair Care by Category Retail Value RSP - VND billion - Current - 2018

Premium brands are gaining its market share In the review period, Vietnamese consumers, especially amongst the middle- and highincome segment and particularly amongst white-collar workers, seemed to turn from buying mass brands to premium ones. Indeed, although hair care has not been performing as well compared to the previous years, the sales value of premium brands such as Amway and Nu Skin saw healthy value and volume growth in 2018. It was mainly thanks to huge efforts of these companies to expand their distribution networks to new markets and maintain relationships with retailers. Besides that, high product quality is the most important factor driving the demand for premium brands. Over the forecast period, value sales of premium brands such as Nu Kin are expected to grow gradually thanks to an even brighter economic outlook and higher living standards.

Growth Performance

2-in-1 Products -

Colourants 574.6

Conditioners and Treatments 1,255.5

Hair Loss Treatments -

Perms and Relaxants 10.1

Salon Professional Hair Care 497.1

Shampoos 12,349.2

Styling Agents 273.3 -10%

HAIR CARE

14,959.8

CURRENT YEAR % GROWTH

0%

15%

% CAGR 2013-2018

% CAGR 2018-2023

Competitive Landscape Company Shares of Hair Care % Share (NBO) - Retail Value RSP - 2018 Unilever Vietnam Interna...

35.8%

Procter & Gamble Vietnam...

12.2%

Unza Vietnam Co Ltd

4.9%

International Consumer P...

4.5%

L'Oréal Vietnam Co Ltd

2.1%

Sao Thai Duong Cosmetics...

1.8%

Hoyu Corp

0.9%

LG Vina Cosmetics Co Ltd

0.9%

Dai Viet Huong Trading M...

0.5%

Mascolo Ltd

0.4%

Creative Nature Group

0.4%

Henkel Vietnam Co Ltd

0.4%

John Paul Mitchell Syste...

0.3%

Amway Vietnam Ltd

0.3%

Oriflame Vietnam Ltd

0.3%

Colgate-Palmolive (Vietn...

0.1%

Janssen-Cilag Ltd

0.1%

Mandom Vietnam Co Ltd

0.1%

Revlon Inc

0.1%

Others

33.8%

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Brand Shares of Hair Care % Share (LBN) - Retail Value RSP - 2018 Clear

11.5%

Sunsilk

9.5%

Dove

7.6%

X-Men

4.5%

Pantene

4.3%

Head & Shoulders

4.1%

Clear Men

3.7%

Romano

3.7%

Rejoice

3.5%

Lifebuoy

2.0%

Thai Duong

1.8%

L'Oréal Professionnel

1.8%

TRESemmé

1.4%

Enchanteur

1.3%

Bigen

0.9%

Double Rich

0.9%

Ramus

0.5%

TIGI

0.4%

Davines

0.4%

Others

36.2% Increasing share

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Decreasing share

No change

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