Vietnam’s supplemental food market grows by 9-10% per annum
The things of universal interest in Vietnam, if put in order of importance, according to market research firm Nielsen, are general economic information, bills for basic needs, job stability, food price increases and health.
This explains why the functional food market in Vietnam is hot. A search on Google for ‘thuc pham chuc nang’ (functional food) gets 1.3 million results after just 0.43 seconds. Numerous links to ad pieces are displayed.
The heavy investment in ads show the great potential of the functional food industry in Vietnam.
According to Tran Dang, chair of the Vietnam Functional Food Association, export of the products can bring US$1 million a year, while the domestic market has been expanding by 9-10% per annum.
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In 2010, Vietnamese enterprises made up 66% of the domestic functional food market. But now, the market is being controlled by foreign companies, such as Amway and Tiens Vietnam, Herbalife and Unicity Vietnam.
Amway, just after five years of operation in Vietnam, reported revenue of US$90 million in 2013. One year later, the company started construction of its second factory in Vietnam.
Herbalife, after setting foot in Vietnam in 2009, has been expanding its network in Vietnam with the growth rate of 50% per annum. The fact that Vietnam ranks 16th in the group’s global ranking in business index showed how Vietnam is attractive in manufacturer’s eyes.
Nu Skin, which joined the Vietnamese market in 2013, has also reported a high growth rate of 30-50% per annum.
Pakapin Leevutinun, president of Nu Skin Thailand & Vietnam, confirmed revenue of US$15 million in Vietnam in 2013.
Vietnamese companies, which enjoy the advantage of operating in the home market, have also been trying to enlarge their networks.
Hau Giang Pharmacy, Traphaco, Hoa Thien Phu, Nam Duong and Sao Thai Duong have been spending big money on developing material growing areas and building factories to make healthcare products from herbs.
However, while the Vietnamese functional food market promises great opportunities, it is challenging because of the existence of counterfeit goods.
A report of Moore released in 2014 showed that two out of every 10 ads about functional food on TV were unlicensed, while five out of every 10 licenses ads had problems in content.
