Unlocking the Potential of Vietnam’s Cosmetics Market: 7 Key Questions Answered for Importers

Our legal experts answered 7 most common questions on how to import cosmetics and beauty products to Vietnam market. All are summarized in this article.

According to US International Trade Administration research, Vietnam cosmetics market offers the most significant potential for cosmetic product sales. The cosmetics industry in Vietnam is thought to provide effective development potential for businesses that can successfully manage the competitive environment and satisfy the changing demands of Vietnamese customers.

With up to 93% of personal care products imported, Vietnam is a hotspot for international cosmetics brands. The top exporters of makeup to Vietnam are South Korea, Europe, Japan, Thailand, and the US.

Vietnam’s market for skin care products was valued at US$850 million in 2019 and is projected to grow to US$1.9 billion by 2027, representing a Growth of 11.7 percent from 2021 to 2027.

Read About Cekindo’s Cosmetic Product Registration Services

90% of the domestic market share is controlled by major international beauty giants like L’Oreal, Ohui, Estee Lauder, The Body Shop, and well-known competitive Korean names, leaving regional companies battling to contend.

However, the industry is quickly expanding. A thriving market with an expected yearly userbase growth rate of 35% ensures that there will always be chances for international Fast Moving Consumer Goods (FMCG) companies to succeed.

What types of cosmetics should I import into Vietnam?

Baby and Child Care Products

Vietnam currently has a population of  99.6 million. The people of Vietnam are growing by about 1% annually, or about 1 million individuals.

According to this estimation, the infant and childcare goods market will experience fast growth due to rising demand fueled by growing urbanization, increasing incomes, and altering lifestyles. As a result, businesses can take advantage of an expanding client base.

Beauty Products

Regarding market dominance, South Korean products are most widely used in Vietnam, which makes up 30 percent of the market. Local customers identify Korean and Japanese goods as hip, inexpensive, and high-quality. On the other hand, they view European and American cosmetics as “names for grownups” with a reputation, reliability, and high quality.

Vietnamese shoppers typically place a higher priority on skincare items that can shield their complexion from the weather and pollution. This results from the country’s generally humid and muggy weather and the intensity of air pollution in cities. Vietnamese consumers also favor natural-based giids because they think they are better and healthier for their skin.

In addition, they ought to be appropriate for excessive humidity for the corresponding skin and hair kinds. The rising demand from the region’s male population presents opportunities for personal care and hygiene goods.

Green or Natural Cosmetics

Young Vietnamese customers are becoming increasingly interested in organic and natural products. However, little is known about how product understanding and motivating variables affect this new trend.

Following this course, the Natural Cosmetics sector will generate US$57.55m in sales in 2023. The industry is anticipated to expand by 4.02% yearly. By the end of 2023, the Vietnamese Natural Cosmetics eCommerce market, which makes up 8.7% of the country’s overall Cosmetics eCommerce market, is expected to hit US$10.3 million. After that, by 2027, a market value of US$16.2 million is predicted, with a cumulative annual growth rate of 12.1%.

As a result of proactive cooperation between international beauty partners and domestic companies, this figure will only increase.

What are the authorization requirements to import cosmetic products to the Vietnam market?

The ASEAN Cosmetic Directive was created in 2007 and laid out rules and standards for producing, selling, and promoting cosmetic goods. All decorative goods must comply with the ASEAN Cosmetic Directive and be listed with the relevant country regulatory body before being distributed within the area. The order also includes the following set of necessities:

  1. Local legal representation: To import your goods, you must either locate a reputable local distributor or establish a wholly foreign-owned company. Due to widespread fraud and dishonesty in the application system, finding a local dealer with no prior expertise in the Vietnamese market can be challenging.
  2. Product Registration: Including a Vietnamese and English product description file.
  3. Product Specification: Requirements to meet Ministry of Health approval, including Safety Evaluation, Raw Material Registry, and Formula. Preservative Effectiveness, Product Durability, Good Manufacturing Practice, and Indications of Claims.
  4. Labeling
  5. Certificate of Free Sale
  6. Regular notification to local authorities:  The accountable representative must alert national officials.

RELATED: An In-Depth Guide to Vietnam’s Cosmetics Market: Market Analysis, Labeling, Claims, Packaging and Advertising

What is an HS Code and where can I find it?

The HS Code is a system of letters, digits, and titles to categorize traded goods. Its HS Code determines the tax amounts to be applied to an object. Check the national tax director for the relevant HS Codes on the national tariff database.

The Vietnamese government has recently changed the structure of the government to liberalize the economy, which has resulted in frequent updates to the tariff and tax laws and uneven application of those changes.

Contact us to determine what taxes will be levied on your goods and what tax breaks would benefit your company.

Do I have to open a local business to import to Vietnam?

Any company that wants to sell cosmetics must have a legal representative in Vietnam.

Finding a local wholesaler is feasible, but it’s not advised, given the high likelihood of a scam that could put the possession of your product and sales income at risk. You don’t want to depend on a third party to promote your business and handle your goods. Finding a trustworthy associate who can assist you in achieving your company goals can take time and effort.

You should establish a wholly foreign-owned company or look for a trustworthy local associate. The law professionals at InCorp can guide you on both issues, and we’ll respond to your inquiries within 24 hours.

Can I just find local distributors so I won’t have to worry about the licenses?

You can discover a local business or person to serve as the legal representative in charge of marketing the goods and maintaining administrative contact with the Vietnam Drug Administration. In addition, handling the licensing and regulation requirements won’t be a problem.

If you decide to work with a regional wholesaler, InCorp can help locate trustworthy distributors and business representatives in Vietnam.

To assess the dependability of your prospective collaborators, InCorp could also run a background investigation on your potential distributors. Contact us for more information on our service for conducting a thorough study.

What is the duration of the application process required to commence the importation and sales of cosmetics in Vietnam?

The procedure for importing and marketing cosmetics in Vietnam can differ based on several elements, including the nature of the product and the degree of application intricacy. However, starting a business in Vietnam typically takes one to three months. The procedure for registration could take an extra 20 to 25 days.

What kind of taxes will I have to pay?

The tax you must pay depends on where your merchandise is from. You might be charged a variety of duties and expenses when bringing cosmetics into Vietnam, including:

  • Import Tax: The sort of imported cosmetic product determines the import tax percentage.
  • Value-added Tax (VAT): The present VAT rate in Vietnam is 10%
  • Special Consumption Tax (SCT): This levy is placed on specific products viewed as luxuries or non-essentials. SCT may apply to cosmetics based on how they are categorized.
  • Environment Protection Tax (EPT): Environment-harming products are subject to this levy. EPT may apply to some products based on their makeup.

It’s essential to remember that the rules and tax rates could change over time and differ based on the particular sort of imported cosmetic product. Therefore, for the most recent information on taxes and laws about the entry of cosmetics into Vietnam, it is advised to speak with a local tax expert or the Vietnamese customs agency.

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Verified by:​

Thanh (Tim) Ta

Tim Ta is the Head of the Business Consulting Department of Incorp Vietnam. He is a seasoned professional with more than 6 years of consulting experience in Vietnam for market entry, incorporation, and real estate investment.