Vietnam's rapidly growing middle-class and even faster-growing affluent population are eager to splurge on luxury beauty products, reflecting their rising social status and increased disposable income.
“In comparison to other developed luxury markets in South East Asia, Vietnamese consumers are more brand conscious and actively seek out international, especially European and American brands,” said Nguyen Ngoc Phong Dinh, country manager, Vietnam, LUXASIA, which recently launched its escentials store in the country.
“In particular, niche fragrances are growing in popularity as they provide an avenue for consumers to find a unique product or brand which suits their individual taste,” he told CosmeticsDesign-Asia.
Against this backdrop, beauty brands are eager to enter the market, but proper retail infrastructure has been a hurdle.
However, the country is now seeing significant developments in premium mall infrastructure.
“Vietnam, as a whole is undergoing premiumisation resulting in growing modern and luxury retailing spaces between 2024 and 2025. This will provide more avenues for international luxury brands to play in and drive greater visibility with consumers,” said Karen Kwek, head of consumer experience and retail excellence, LUXASIA.
In May, LUXASIA celebrated the launch of escentials, its flagship omni-retail concept, in Ho Chi Minh City’s prestigious Crescent Mall.
The 112sqm space houses a curated selection of renowned fragrance brands such as Acqua di Parma, Frederic Malle, Killian Paris, Maison Francis Kurkdjian, and Penhaligon’s, as well as skin care and hair care brands like POLA and Olaplex.
According to LUXASIA, this latest opening marks the official debut for many of these brands in Vietnam.
Kwek, who also leads the regional escentials business, noted the importance of physical touchpoints in Vietnam’s luxury beauty market, despite the high penetration of e-commerce.
“The Vietnamese consumer likes to visit brands' physical retail outlets, where they can take advantage of personalised consultations and try out multiple products before making a purchase decision.
“In addition to enhancing the overall shopping experience, it also justifies the premium price tag on the goods to the consumer. Vietnamese consumers have exhibited a preference to shopping in an omnichannel way which arose due to COVID-19 but has since stuck post-COVID.”
LUXASIA began its regional expansion in 2021, stepping out of Singapore for the first time with a boutique in Kuala Lumpur, Malaysia. Since then, the boutique has expanded to Bangkok, Thailand.
Vietnam potential
The launch of escentials Vietnam further cements LUXASIA’s commitment to the country.
“Vietnam’s GDP has been relatively resilient, outperforming regional peers and growing slightly above 6%. Despite short-term global headwinds, Vietnam has strong potential for even greater growth in the luxury beauty market,” said Nguyen.
Vietnam is projected to enjoy a rapid growth in income levels over the next five years, propelled by the substantial increase in Foreign Direct Investment (FDI).
“This surge in FDI is anticipated to create a plethora of job opportunities, providing individuals with enhanced avenues to earn income and boost the country's economic development,” said Nguyen.
“With rising levels of disposable income and improvement in the quality of life, Vietnamese consumers are becoming more globalised in their daily consumption and lifestyle choices, engaging in premiumisation of their beauty routine as a symbol of their status and sophistication.”
As previously reported by CosmeticsDesign-Asia, SK-II launched in Vietnam in partnership with LUXASIA, which represents the brand across six markets in Asia Pacific: Australia, Indonesia, Malaysia, Singapore, Thailand, and Vietnam.
“We’ve had great success with our recent entry of SK-II in Vietnam last year. To date, the brand has consistently ranked as one of the top-performing brands in the Takashimaya Department Store,” said Nguyen.
He added that premium skin care continues to dominate the beauty market, accounting for approximately 62% share in 2023.
“Local consumers are attracted to the use of prestigious ingredients such as ginseng and rare botanicals, claiming to carry superior moisturising properties coupled with anti-ageing benefits. They prioritise not just efficacy but also the narrative and the storytelling behind beauty products.”
However, premium fragrances are now the best-performing category in terms of growth and the firm expects this trend to continue