Vietnam’s health supplement market is seeing a rapid increase due to the country’s demand for health-related and personal care products.
Vietnamese health products have started to see a rapid increase recently compared to their regional peers.
Over the last two decades, there have been substantial changes in Vietnam’s health supplements (also known as dietary foods or functional foods). Based on a report from the British Chamber of Commerce in August 2021, the total market value of the local health supplement market reached US$562.9 billion, with a growth rate of 13 per cent. And the year-on-year (y-o-y) average growth rate of the market is expected to be 20 per cent in the next 10 years.
Growing personal disposable income and increased health awareness
Vietnam possesses one of the fastest-growing middle-income and affluent classes in Southeast Asia. According to the World Bank, in 2020, Vietnam’s GDP per capita was US$2,785 while the government will attempt to reach GDP growth of up to 6.5 per cent in 2022. This is expected to have a positive effect on consumer spending and drive the demand for products that can cover the nutritional deficit.
Further, with a population of approximately 97 million people, more than 8 million of whom are over the age of 65, the demand for healthcare supplements in Vietnam has expanded significantly in recent years. The local population is becoming more aware of health risks, and prevention through the use of dietary food products to alleviate diseases such as high blood pressure, diabetes, obesity, and cardiovascular disease which have increased.
Self-medication has been recognized as a common issue in Vietnam. The self-medication rate has ranged from 40 per cent to 60 per cent in rural areas and up to 76 per cent in urban areas. This practice is favoured due to the lax management of over-the-counter medications and the increasing cost of healthcare services.
The cost of paying for medical examination and treatment services from the pocket of individuals is 43 per cent, quite high compared to many countries in the world. This is related to the fact that health insurance funds have not yet covered the full range of health care needs and services while the level of financial coverage is limited.
Foreign brands are trusted more than domestic ones
The growing demand for health supplements has resulted in increased usage of imported products as people tend to trust these brands more than domestic ones. Foreign brands tend to be positioned in the premium segment to attract mid-to-high-end consumers, while local brands generally concentrate on the mass market.
Further, foreign players are more active in non-herbal or traditional dietary supplements, while local players are more active in herbal/traditional/curing items. Imported goods account for 40 per cent of the market, indicating that locals are more open to trying foreign brands.
Herbal health supplements preferred
In Vietnam, herbal, traditional, and curing supplement products accounted for more than 70 per cent of the market in 2021. It has been forecast that herbal supplements will continue to dominate the health supplement market.
Ginseng is the most popular herbal dietary supplement in Vietnam, and it is expected to increase rapidly since it boosts the immune system, which is a major issue in the context of the pandemic.
Domestic players dominate
Herbalife, Trafaco JSC, Amway Vietnam Ltd, Nu Skin Vietnam Co Ltd, and Hau Giang Pharmaceutical JSC are the top five health supplement companies in Vietnam. However, the majority of the top corporations own less than 5 per cent of the market, which demonstrates that the Vietnam supplement sector is highly competitive as the number of establishments increased to 3,108 with 11,127 products in