Vietnam Gdp

Chapter 2: Analyzing external environment

2.1 Macro environment

Vietnam is a potential market with the developing economy after WTO accession, with the policy of expanding and increasing income, leading to the increasing demand for beauty. More and more foreign companies invest in Vietnam, especially the beautiful trend of Vietnamese women after "Korean Wave 2002".

Vietnam’s GDP growth rate is gradually increasing, reached 7.46 % in 2016. The growth was mainly from manufacturing and  foreign investment . As a result, cosmetic  industry  would benefit from the market growth.

Interest rates in Vietnam have decreased slightly in recent years. Enterprises are less likely to borrow. Capital expansion becomes more available. In addition, beauty needs create favorable opportunities for foreign cosmetics companies.

Joining WTO creates a great opportunity for Vietnam to expand the market to the world. This leads to both advantages and disadvantages as the price, quality and design competition become fiercer. Cosmetic businesses have to improve their products’ quality, balance the price and create new designs to compete with others from domestic and international markets.

In 2016, Vietnam officially signed Trans-Pacific Partnership (TPP), along with ten other members. The product’s standard is now stricter from quality to nature  materials. This is an opportunity for businesses, especially cosmetic retailers, to highlight products..

2.1.2        Social, Cultural, Demographic, and Environmental environment

2.1.2 Social, cultural, demographic and environmental dimensions

Social, cultural, demographic and environmental changes affect all products, services, markets and customers. For that reason, businesses must develop different products, services and strategies for different types of customers.

Living conditions of Vietnamese people, especially in urban areas, have improved significantly. This has led to an increase in demand for beauty in busy cities such as Ho Chi Minh City and Hanoi. These areas become the ideal place for many businesses to develop the products.

Distracted distraction also has a significant effect on the buying habits of the Vietnamese. Domestic enterprises must compete with other foreign brands, so the product must be unique and high quality.

Materials used in the cosmetics industry are mainly from nature,. This prompted businesses to consider importing natural cosmetics.

1. Political, governmental, and legal environment

According to Circular 06/2006 / TT-BYT: Cosmetics companies are free to import cosmetic products into Vietnam and need to present original inspection certificates for imported these products. The certificate must be issued by the manufacturer. And these companies are required to be responsible for product quality. Advertising content must comply with the regulations of the Ministry of Culture and Information.

 Taxes: reduced from 50% to 30% ~ 20% depending on the item subject to tax.

2.2 Micro environment

2.2.1 Introduction to distillery and brewery industries:

2.2.1.1 Market size:

The total market of Vietnamese cosmetics is about 201.1 trillion. Ho Chi Minh City accounted for 23% of sales and also the largest market.

2.2.1.2 Market growth:

The market of cosmetics in the country is growing quite fast, with an average growth rate of 30% per year.

2.2.2 Cosmetic  market

         2.2.2.1 Size and segments:

The total of cosmetic market in Viet Nam is  2356 billion VND, domestic market  account for 23% ,  import market is 69% ,  Export 2% .

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2.2.2.2 Consuming and growth trends:

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Through the data , skin care products have the potential to grow well . Import products increase faster than domestic products.  Customers is prefer import cosmetic  than others.