Trade between Vietnam and Thailand has increased by 13 per cent annually over the past five years thanks to Thailand's investment in cutting-edge technologies, innovations in cosmetics production and personal care.
Thailand shipped 2 billion USD worth of cosmetics abroad in 2013, 26 per cent of which was delivered to the Southeast Asian region, that figure is projected to climb to 275 billion THB (7.6 billion USD) this year.
In fact, the president of the Thai Cosmetic Manufacturers Association, Ketmanee Lertkitcha, has called for greater cooperation between both cosmetic industries ahead of the establishment of the ASEAN Economic Community (AEC) later this year.
She commented that both countries could benefit hugely from sharing the same development path given their current economic status and could together expand their market share within the AEC and beyond.
About the AEC
The ASEAN Economic Community is tasked with setting simple, harmonised and standardised trade and customs, processes, procedures and related information flows to reduce transaction costs in Indonesia, Vietnam, Brunei, Cambodia, Malaysia, Philippines, Myanmar, Singapore, Laos, and Thailand.
This includes enhancing export competitiveness and facilitating the integration of ASEAN into a single market for goods, services and investments and a single production base.
To date the Authority is on track to eliminate tariffs on almost all goods by the end of the year.
Thai cosmetics popularity is spreading...
While young Vietnamese people are turning towards natural and organic cosmetics, Thailand has an abundant resource of materials and self-contained production chains.
In terms of market breakdown, Thailand and Indonesia are the most lucrative while demand for organic hair care products is anticipated to be the highest segment.
According to Future Market Insights, the organic cosmetics market in Thailand was valued at US$ 755 million in 2014 and is anticipated to be worth US$ 1.2 billion by 2020.
Meanwhile, Indonesia is anticipated to witness a CAGR of 9.2% through 2020 to reach a valuation of 1.06 billion.
"In terms of segments, hair care accounted for a market share of nearly 28% of the total organic cosmetics market in 2013 and is expected to be worth US$1.2 billion by 2020," says the firm's associate consultant, Vipassa Kakroo.