The cosmetics industry is one of the biggest businesses in the world. As the industry continues to expand, it has led to fierce competitiveness and rising consumer expectations. Thus, consumer behavior plays a fundamental role in creating marketing strategy. The Vietnamese cosmetics market is not an exception to this fact. Cosmetics brands in Vietnam have to understand their consumer to satisfy their demand and build a strong market standing. This articles aims to discuss Vietnamese consumers in the cosmetics market and provide marketing practices based on consumer behavior for foreign brands.
Authors: Thi Kim Khanh Nguyen, Thanh Thao Nguyen and Marja Viljanen
Vietnamese consumers in the cosmetics industry
In recent years, Vietnam has seen a lot of changing patterns in buying behaviors, especially in young people who belong to Generation Z and the late of Millennials. Since these generations have been exposed to many development privileges as well as the Internet and globalization effect at earlier ages, there have been a lot of changes in their thinking. The improvement of living standards together with globalization effect has led to a remarkable increase in consumers’ consciousness of quality. This makes them demand for more original products and high-quality customer service. (Oxford Business Groups 2019.)
The usage of cosmetics and makeup products has gradually increased its social values and meanings among Vietnamese consumers, especially among women. The percentage of people who do not wear makeup decreases, from 24% in 2016 to 14% at the beginning of 2019. Vietnamese women also increasingly use skincare products, as 73% of 480 respondents in research done by Q&Me use skincare products at least once a week. (Q&Me 2019.)
Together with the growth of online shopping, online communication and media have affected Vietnamese consumers a lot in shopping behaviors. Recent years have seen rise in beauty blogging and influencing, where individuals express opinions on cosmetics products. According to a survey by Kengo (2018), 91% of people who took part in his survey and usually use makeup products admitted to watching YouTube for cosmetics review and makeup tutorials. A typical Vietnamese spend circa 50USD a month for cosmetics products, among other entertainment products and clothes (Chi 2018). This amount of money is not enough to afford any luxurious brand cosmetics. Therefore, Vietnamese consumers have the tendency to look for price value cosmetics and other related products that last for a long time.
Marketing practices for foreign cosmetics brands
The research was carried out on Shiseido Group, a Japanese multinational cosmetics company. They have been promoting their business in Vietnam from 1997. Because of the growth of the Vietnamese cosmetics market, Shiseido Group wishes to expand its business and strengthen its position in the market. (Vinny 2017.) Although the suggested marketing practices are designed for Shiseido Group Vietnam, it is also applicable for other international cosmetics brands in Vietnam to some degree. The empirical research included three interviews and an online survey with 197 valid responses. (Nguyen & Nguyen 2019.) Based on the empirical data and secondary data, marketing practices were proposed for the case company.
The first proposal concerns the case company’s product. As consumers are environmentally aware, the case company should concentrate on producing cosmetics products with natural ingredients. The packaging should be oriental style to appeal to Vietnamese aesthetics sense. Skincare products are Shiseido’s specialty. Thus, they can focus on promoting high quality skincare products that provide good value. Second, the case company’s prices are quite expensive to Vietnamese consumers. It will be quite challenging for Shiseido Group to lower their price, as they need to take account of other costs. It is suggested that the company should focus on the Millennial generation from 23 to 38 years old, who have stable income to afford the brand’s premium price. The case company should conduct promotion for consumers such as discount events and membership program. (Nguyen & Nguyen 2019.)
Third, to make the company’s product more accessible for consumers, it should open its own independent retail store and showroom in major urban areas in Hanoi and Ho Chi Minh City. This can also assure the consumers of products’ origin because of counterfeit products in the market. Finally, in terms of promotion, the official Shiseido Vietnam Facebook page should be more attentive in responding to users’ questions and comments. Instagram and YouTube page should be opened with the Vietnamese language. Aside from social media, beauty magazines and websites can also be used for advertisement. As YouTube is one of the largest channels for sharing makeup tips amongst Vietnamese consumers, the company can also cooperate with beauty bloggers and celebrities to use its product. If a reputable consumer can provide authentic support for the products, new consumers will be interested in trying out the brand. (Nguyen & Nguyen 2019.)
As Vietnamese market is monopolized by foreign brands, it serves as the driving force to promote business in Vietnam. At the same time, the competition between international brands also becomes more intense. Being able to satisfy consumers’ needs is a factor that put companies in a favorable position. With the rapid development of technology and the Internet, consumers are changing in their behaviors, perceptions, and opinions. Therefore, companies should observe and tailor to the ever-changing consumer behaviors.
Chi, K. 2018. Vietnam’s US$2 billion cosmetics market controlled by foreign brands. Vietnamnet. [Cited 8March 2019]. Available at: https://english.vietnamnet.vn/fms/business/198524/vietnam-s-us-2-billion-cosmetics-market-controlled-by-foreign-brands.html
Kengo, K. 2018. Cosmetics Market in 2018 and the growth of online shopping. Brands Vietnam. [Cited and translated 8 March 2019]. Available at: https://www.brandsvietnam.com/congdong/topic/9223-Thi-truong-my-pham-2018-va-su-bung-no-mua-hang-truc-tuyen
Nguyen, K. & Nguyen, T. 2019. Developing Marketing Practices Based on Consumer Behavior. Case Company: Shiseido Group Vietnam. Bachelor’s Thesis. Lahti University of Applied Sciences, Business Administration. [Cited 14 April 2019]. Available at: http://urn.fi/URN:NBN:fi:amk-201903304042
Oxford Business Group. 2019. Foreign Brands Eyeing Vietnam Due to Growing Young Population and Liberalising Reforms. [Cited 4March 2019]. Available at: https://oxfordbusinessgroup.com/overview/talking-shop-growing-young-population-and-liberalising-reforms-have-foreign-brands-eyeing-vietnam
Q&Me. 2019. Research on Vietnamese cosmetics market 2019. [Cited 8 March 2019]. Available at: https://qandme.net/en/report/research-vietnam-cosmetic-market-2019.html
Vinny, H. 2017. Nars comes to Vietnam. Retail in Asia. [Cited 6 October 2018]. Available at: https://retailinasia.com/in-sectors/health-and-beauty/nars-comes-to-vietnam/
Thi Kim Khanh Nguyen has studied Business and Administration at Faculty of Business and Hospitality Management at Lahti University of Applied Sciences and has graduated and received a BBA degree in April 2019.
Thanh Thao Nguyen has studied Business and Administration at Faculty of Business and Hospitality Management at Lahti University of Applied Sciences and has graduated and received a BBA degree in April 2019.
Marja Viljanen works as a Senior Lecturer at the Faculty of Business and Hospitality Management, Lahti University of Applied Sciences.
Cover image: https://pxhere.com/en/photo/804550 (CC0)
Reference to this publication
Nguyen, T. K. K., Nguyen, T. T. & Viljanen, M. 2019. Vietnamese Cosmetics Market: Consumers’ Expectation from Brands. LAMK Pro. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2019/04/16/vietnamese-cosmetics-market-consumers-expectation-from-brands/