Apparel and Fashion
The Vietnamese clothing sector is experiencing fast paced growth and is estimated to be worth around £26 Billion by 2018. Vietnam has a young population with increasing levels of disposable income, as a consequence they are becoming more brand conscious and consumer orientated. Although the mass market is dominated by established local firms there is still plenty of scope in the the mid to high end market for UK suppliers. The main barrier for UK firms is striking the balance between the portrayal of a luxury lifestyle whilst adhering to local customs and traditions.
Health Supplements
The vitamin and dietary sector has been one of the fastest growing in Vietnam over the previous decade. Local brands have focused on the mass market so UK companies with premium products are better positioned to target mid to high end consumers. Traditionally these products were purchased in chemists and pharmacies however they are now appearing in convenience stores and larger supermarkets. Effective branding will be key to increasing sales in these new distribution channels. The highest priority health concerns are eye, digestive, cardiovascular and mental health care. There has also been an increased emphasis on women and children’s health supplements. A growing middle-class who are becoming more health conscious and demand higher living standards are one of the main drivers for this sector. Self-medication is also popular because of rising health care costs rise and a lack of adequate health clinics.
Household goods
Overall household income is expected to grow rapidly over the next five to ten years therefore this sector of the retail market remains promising. Trends seem to be set around time saving appliances for cooking and washing as working hours are generally becoming longer. Recent rises in electricity prices have created a high demand for energy saving appliances, Vietnamese consumers see these as better long term investments. On average Vietnam has 1.2 children per family so rising incomes are allowing parents to spend lavishly on their children. The safety and quality of children’s products is an increasing concern for affluent and middle-class parents. Opportunities for UK companies lie in the mid-to-high-end segment of toys and children’s wear.
Electronics
Due to the fulfilment of WTO agreements, import tax was eliminated for many consumer electronics at the beginning of 2015. As a result the consumer electronics market is expected to see strong annual growth of 14.42% until 2020. Aggressive internet growth and a government boost for e-commerce efforts has created greater independence on smart devices. This rise in device demand coupled with the abolition of trade tariffs offers UK companies a unique opportunity to enter this market.
Cosmetics and Personal Care
High levels of growth are expected in Vietnam’s cosmetic sector, spending per person in this sector is 80% less when compared with neighbouring Thailand, this demonstrates the enormous potential for growth. In 2009 under WTO agreements the market opened up to foreign companies and imports were allowed to be legally distributed within the country. The market now sees a 90% ownership by foreign companies and some notable names include The Body Shop, L’Occitane, Clarins and L’Oreal. There is a high demand for foreign brands as Vietnamese consumers are drawn to their marketing and innovation. These consumers are willing to pay a premium for value added goods and one key driver is the use of natural products as sensitive skin and allergies play an important role. Cosmetics are becoming a more convenient choice for gifts as they are seen as useful, easy to find and low budget. The male cosmetic market is also set to grow steadily as there is an increasing trend among men to improve their appearance to achieve higher social status.
Food
Food is a high growth but competitive sector referenced by a thriving Vietnamese food processing industry. It is forecast that there will be a 5.1% increase in food consumption in 2016 and the domestic market to be worth £22.5bn. Vietnam’s population is still expanding and eating habits are undergoing noticeable change. Raised incomes levels have led to an increased demand for high quality, hygienic and pre-processed food.