Vietnam’s Health Supplement Market: Trends, Opportunities, Market Entry

Vietnam’s well being complement market is seeing a fast enhance because of the nation’s demand for health-related and private care merchandise. On this article, Vietnam Briefing offers an outline of the well being complement market together with business drivers, challenges, and market entry choices and necessities for traders.

Vietnamese well being merchandise have began to see a fast enhance not too long ago in comparison with its regional friends.

Over the past 20 years, there have been substantial adjustments in Vietnam’s well being complement (also called dietary meals or useful meals). Primarily based on a report from the British Chamber of Commerce in August 2021, the full market worth of the native well being complement market reached US$562.9 billion, with a progress fee of 13 p.c. And the year-on-year (y-o-y) common progress fee of the market is predicted to be 20 p.c within the subsequent 10 years.

Rising private disposable revenue and elevated well being consciousness

Vietnam possesses one of many fastest-growing middle-income and prosperous lessons in Southeast Asia. In line with the World Financial institution, in 2020, Vietnam’s GDP per capita was US$2,785 whereas the federal government will try to succeed in GDP progress of as much as 6.5 p.c in 2022. That is anticipated to have a optimistic impact on shopper spending and drive the demand for merchandise that may cowl the dietary deficit.

Additional, with a inhabitants of roughly 97 million individuals, greater than 8 million of whom are over the age of 65, the demand for healthcare dietary supplements in Vietnam has expanded considerably in recent times. The native inhabitants is turning into extra conscious of well being dangers, prevention by means of using dietary meals merchandise to alleviate ailments comparable to hypertension, diabetes, weight problems, and heart problems which have elevated.

Self-medication

Self-medication has been acknowledged as a standard challenge in Vietnam. The self-medication fee has ranged from 40 p.c to 60 p.c in rural areas and as much as 76 p.c in city areas. This follow is favored because of the lax administration of over-the-counter medicines and the rising value of healthcare providers.

The price of paying for medical examination and therapy providers from the pocket of people is at 43 p.c, fairly excessive in comparison with many international locations on this planet. That is associated to the truth that medical health insurance funds haven’t but lined the total vary of well being care wants and providers whereas the extent of economic protection is restricted.

International manufacturers trusted greater than home ones

The rising demand for well being dietary supplements has resulted in elevated utilization of imported merchandise as individuals are inclined to belief these manufacturers greater than home ones. International manufacturers are usually positioned within the premium section to draw mid-to-high-end customers, whereas native manufacturers typically think about the mass market.

Additional, international gamers are extra energetic in non-herbal or conventional dietary dietary supplements, whereas native gamers are extra energetic in natural/conventional/curing gadgets. Imported items account for 40 p.c of the market, indicating that locals are extra open to attempting international manufacturers.

Natural well being dietary supplements most well-liked

In Vietnam, natural, conventional, and curing complement merchandise accounted for greater than 70 p.c of the market in 2021.  It has been forecast that natural dietary supplements will proceed to dominate the well being complement market.

The excessive prevalence of natural dietary supplements within the magnificence and private care sector has additionally pushed the well being dietary dietary supplements market in Vietnam. It is because individuals assume that natural or conventional merchandise have much less or no negative effects than commonplace merchandise created from pure elements.

Ginseng is the preferred natural dietary complement in Vietnam, and it’s anticipated to extend quickly because it boosts the immune system, which is a significant challenge within the context of the pandemic.

Home gamers dominate

Herbalife, Trafaco JSC, Amway Vietnam Ltd, Nu Pores and skin Vietnam Co Ltd, and Hau Giang Pharmaceutical JSC are the highest 5 well being complement firms in Vietnam. Nevertheless, the vast majority of the highest companies personal lower than 5 p.c of the market, which demonstrates that the Vietnam complement sector is extremely aggressive because the variety of institutions elevated to three,108 with 11,127 merchandise in 2021.

As well as, greater than 70 p.c of the well being dietary supplements consumed available in the market are domestically produced items. The remaining 20 p.c are imported from well-known markets such because the US, Germany, Canada, South Korea, Japan, and so forth.

Whereas home merchandise nonetheless dominate with a 70 p.c market share, a number of massive international manufacturers have invested considerably to increase the market comparable to Cheing Kwan Jang, Pharmaton, IMC, and so forth. With benefits in know-how, product high quality, inspection, and a strict manufacturing course of, these are formidable opponents which might be more likely to rapidly dominate the market within the close to future.

It’s value noting that, beneath Decree No. 15/2018/ND-CP, all useful meals manufacturing institutions should fulfill Good Manufacturing Practices (GMP). GMP is a system that ensures merchandise are produced as per high quality requirements. In 2020, greater than 200 factories met or exceeded GMP necessities.

Alternatives

Moreover excessive demand amongst older adults, the proportion of individuals consuming well being dietary supplements has elevated to 58.5 p.c for the inhabitants over the age of 18, because of the publicity of the advantages of those merchandise by means of the web and health-focused media.

As well as, the Vietnam Affiliation of Purposeful Meals (VAFF) – which is a social occupation group of Vietnamese companies, establishments and entrepreneurs – has not solely signed cooperation agreements with home businesses such because the Meals Security Division (Ministry of Well being), the Division of Competitors Administration (Ministry of Trade and Commerce) however can also be a member of the ASEAN Alliance of Well being Complement Associations (AAHSA) and the Worldwide Alliance of Dietary/Meals Complement Associations (IADSA). 

Such agreements will permit Vietnam entry to in depth regional and worldwide experience attracting traders who can place their regional or international manufacturing and analysis and growth amenities within the nation

VAFF maintains the connection by exchanging info and updating new details about well being dietary supplements with markets such because the US, China, Japan, and the EU, significantly about authorized paperwork, requirements, and new merchandise to maintain up with new traits and high quality for the Vietnamese market.

Challenges

Though the well being complement business has quickly developed, the policing of unlawful merchandise is a problem for the authorities. Native and worldwide firms should compete with substandard and unlawful merchandise which might be extra interesting resulting from decrease costs.

Additional, there are various deceptive claims in adverts on on-line platforms comparable to Zalo, Fb, and Youtube. With excessive demand customers usually don’t trouble to confirm claims or are unaware of the origin of merchandise.

Authorities rules have additionally been unable to maintain up with false promoting campaigns.

Market entry technique

International producers of well being dietary supplements might enter the Vietnamese market by means of an area distributor or by establishing a buying and selling firm.

When it comes to getting into by means of an area distributor, selecting the right companion could make or break an organization’s funding technique, and is understandably a supply of concern for many executives. Due to this fact, the primary and most essential situation to think about is that the native companion have to be granted a enterprise license for buying and selling the investor’s merchandise.

If the investor has arrange buying and selling firm inside Vietnam, they need to pay attention to the dangers and sure necessities. For the reason that well being complement business is a conditional sector, traders ought to pay attention to the next key necessities:

• software for an funding registration certificates;
• software for a enterprise registration certificates; and
• software for a license to promote useful meals.

In each circumstances, to distribute well being dietary supplements in Vietnam, enterprises should perform procedures for product declaration and should be sure that their merchandise adjust to the labeling and well being and security necessities.

As well as, the Certificates on Satisfaction of Requirements on meals hygiene and security have to be obtained, whereas all requirements regarding well being, security, and hygiene have to be maintained so long as the enterprise is in operation.

Takeaways

The well being complement market is a promising subject not just for producers but additionally for customers. However, points about security requirements and commercials are the primary issues for traders. Nevertheless, with an area inhabitants that’s more and more conscious of well being dangers together with a sizeable inhabitants that’s over 65, there are a number of alternatives for traders because the sector is barely anticipated to develop.