Vietnam Cosmetic Sector Analysis: Growth Trends and Compliance Requirements

Most Vietnamese consumers are more familiar with South Korean cosmetics because they often associate South Korean brands with youthfulness, good quality and affordable prices.

Local brands are mainly exported to nearby Asian countries. However, several domestic brands are gaining traction in Vietnam namely Lan Hao (Thorakao), JSC Saigon Cosmetic, and JSC Sao Thai Street.

One of the several reasons that explain why Vietnamese brands are performing poorly is because of limited financial capability. As a result, they do not have the ability for marketing, advertisement and most importantly research and development (R&D).  Furthermore, while many of the domestic brands have high-quality products, these companies do not really understand branding and product positioning.

• Increased Potential with Reduced Tax for Imported Cosmetics

Thanks to the rapidly developing cosmetic market in Vietnam, there are tremendous opportunities for foreign investors, particularly in make-up, hair products, perfumes, and essential oils.

On top of that, the government of Vietnam has made considerable efforts to sign trade agreements with many countries. Through these agreements, tax prices of imported cosmetics are to be reduced to between 0%-5%, in hopes of fostering accelerated growth in the sector.

Cosmetics Regulations in Vietnam

Cosmetics are strictly regulated in Vietnam. Under Vietnamese regulations, which follows the ASEAN Cosmetic Directive, you will need to register your cosmetics products before you can import, distribute or sell them in Vietnam.

All cosmetic product registrations are regulated by the Drug Administration of Vietnam (DAV). The DAV is part of the Vietnam Ministry of Health (MOH). Each cosmetic product/SKU that will be sold in Vietnam will need a separate product registration ^[1]. Registration can be done by an organization or an individual, as long as the registrant is the product owner or someone appointed by the owner.

Product Proclamation Number in Vietnam

Once the cosmetic product registration is successful, the MOH will issue a product proclamation number (in receipt) for each of the products. 

A Product Information File (PIF) is also required for every cosmetic product upon its distribution. A PIF should include the following:

1. A product summary and administrative documents

2. Product quality

3. Material quality

4. Effectiveness/Efficiency and safety

Cosmetics Labeling Requirements in Vietnam

According to ASEAN Cosmetic Directive, here are the labeling contents that should be included on the packaging label of the cosmetic products sold in Vietnam:

• Name and functions of the product, unless the presented form of the product has been displayed clearly the product’s function

• Instruction of usage

• Full ingredients of the product formula. All ingredients must be clearly stated in accordance with the latest international nomenclatures

• The country of origin in which the product was manufactured

• Weight and volume in British Imperial System or International System of Units

• Name and instruction of the individuals or organizations that are in charge of the distribution and sale of the products. They should be indicated in Vietnamese in accordance with the investment registration certificate or enterprise registration certificate. Other information on the labeling can be written in English or Vietnamese

• Quantification is presented with weight or volume, with regard to the meter system or the British system

• Manufacturing lot number

• Date of manufacture or date of expiry must be stated clearly and precisely in the format of DD/MM/YYYY or MM/YYYY. Instruction can be included in regards to product stability if necessary

• For products with shelf life fewer than 30 months, the date of expiry is mandatory and must be printed on the label

• Warning statement about the usage safety if required

All cosmetic product labeling must be printed clearly on the packaging, which can be easily seen by consumers. The information on the labeling shall not be blocked or disconnected from the packaging itself.

Cosmetics Claim Requirements in Vietnam

Other than labeling, all cosmetic products manufactured in or imported into Vietnam must have proper claims before it can be distributed or sold in the country.

While individuals or organizations that put the products on the market are responsible for the product’s safety, quality and effectiveness, they will also need the approval of claims from the authority.

Claims are acceptable as long as evidence and reports are available. For medicinal or therapeutic benefits, their approval is subject to individual assessment by the national authority.

Some prohibited claims are:

• Skin products: Eliminates scars; reverses aging

• Hair products: Reverses hair loss; gets rid of dandruff permanently

• Deodorants/antiperspirants: Prevents sweating entirely

Cosmetics Advertising Requirements in Vietnam

All cosmetic advertising on any of these media: radio, television, internet, newspapers, magazines, posters, events, etc. are regulated under Vietnamese Law and must be approved before they are shown publicly. The content of the cosmetic advertisement must be appropriate and not misleading. It should conform to effectiveness, safety and quality of the product based on ASEAN Cosmetic Directive.

The dossiers of cosmetic advertisement required for approval are listed below:

• Filled application of the advertisement.

• A copy of the cosmetic product registration with seal from the product owner or organization.

• A copy of enterprise registration certificate with seal.

• An authorization letter from the product owner for the person or organization that registers for the advertisement.

• The advertisement scenarios with clear descriptions of the music, pictures and contents used.

• The subtitles materials of the product’s properties and utilities in case the advertised content and the presented content at the seminar or the cosmetic introduction event show the cosmetic’s properties and utilities that are outside the presented content in the cosmetic product proclamation report.