Slowdown in Japan sees brands looking for new opps in Vietnam

By Michelle Yeomans contact

- Last updated on GMT

Slowdown in Japan sees brands looking for new opps in Vietnam

Related tags: Cosmetics market, Trademark

Following a slowdown in its’ domestic market, Japanese manufacturer Naris Cosmetics has expanded its' business into Vietnam’s market. 

Following a slowdown in Japan's cosmetics market, beauty players have started to look elsewhere to balance out business, and analysts say Vietnam is now being regarded as lucrative. 

Deflation, the growth of multi-functional products, the rise of drugstores and a declining population are all noted as having encouraged a downward trend that marketers have been unable to reverse.

Cosmetics manufacturer Naris makes about JP¥22bn in products which it has invested in taking it's door-to-door, mail order and in salon business to that of an international company distributing its products in the US, China, Russia, Hong Kong, Malaysia, Singapore, Indonesia, Thailand, Kazakhstan and now Vietnam.

Is Vietnam really a market worth investing in?

According to Vietnam’s Chemical Cosmetic Association; average revenue from the cosmetics sector in the country reached US$130-150 million, of which more than 90% is said to have come from foreign companies, due to widespread distribution channels.

Although having established many cosmetics brand names of its' own, Vietnam's cosmetics market has been overshadowed by multinational brands due to a lack of innovation and promotional strategies.

The quality of Vietnamese-made cosmetics are not far from that of foreign-made ones but rather that manufacturers are not investing in strategies to develop their products as well as advertising campaigns that local consumers can relate to.

Meanwhile, it is regional newspaper, ‘Sai Gon Giai Phong’ that reckons in that same timeframe (2009-2011) there were up to 430 Vietnamese companies and units that produced and traded cosmetics, but merely accounted for 10% of the market share.

The government run publication further pointed out that at one stage, brands like Da Lan and P/S toothpaste were trademarks that accounted for up to 95% of market share in Vietnam but have disappeared from the market, due to 'strategic moves' by foreign companies.

It highlights for example the deal between Unilever offering $5 million to franchise the P/S toothpaste trademark as being one of the biggest business deals of the time, yet the personal care brand lost its foothold in Vietnam as a result. 

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