Total value of Vietnam’s health supplements is estimated at US$738.5 mn (2022) and is growing at around 13% per annum. The herbal/traditional product category is heavily dominating the market with 79% market share while the non-herbal/traditional product category is taking up the rest of 21% market share. Despite that, the herbal/traditional product segment is still expanding at a higher pace than the non-herbal/traditional, given the local people’s consistent preferences for the former.

The market is rather competitive with top 5 players accounting for less than one third of total market share. 7 out of top 10 players have a market share of less than 5% of total market share.  Top 5 players include Herbal Life, Traphaco, Amway, Nuskin, and DHG (Traphaco and DHG are locally-owned manufacturers; however, they are listed companies and the foreign ownership has kept increasing, being 46.2% and 54.1% respectively). This suggests there are in fact no leading players that are truly “local”.

Key Characteristics and Trends

• Consumers, especially the elderly, are consuming more and more health supplements. People are more aware of preventing illnesses with health supplements rather than treating with drugs.
• Consumers prefer products that contain mixture of ingredients rather than one single ingredient. Herbal/traditional and probiotic ingredients are most favored among various kinds of ingredients.
• Top demand in terms of product functions are: general health (eg. assorted vitamins and minerals), beauty (eg. skin heath, anti-aging), mental health/ neuroleptics (eg brain enhancement, memory boost, sleep bills). Next major products are joint health, eye health and digestive health.

Distribution Models

Brick-and-mortar (physical-store-based) distribution channel account for 70% of total sales of health supplements. This includes: i) pharmacies; ii) drugstores; iii) beauty and health specialist retailers. More pharmacies are becoming drugstores when they try to diversify their product offerings. Beauty and health specialist retailers, mostly foreign-owned chains (Guardian, Medicare, Watson,), are becoming a trend with aggressive expansion.

Electronic retailing accounts for the remaining 30% market share, in the following formats: e-commerce platforms  (Tki, Lazada, Shoppee, etc.) , beauty specialist website (Watson, Hasaki, Chiaki, Sieuthilamdep), Personal social media channels of individual merchants on social media platforms: Zalo, Facebook. TikTok, Youtube.

Market Dynamics or Drivers

• A gradually aging population: Vietnam is gradually transforming from a golden to an aging population, with the ratio of people aged 65 and above in 2040 being 20%.
• The increasing disposable income: More affluent people translate to more demand for health supplement products
• Increasing awareness of health enhancement/ illness prevention with the effects of internet and social media.

Key Challenges

• Fierce competition with upcoming new key players: There are so many players in the marketplace, including a large number of importers. 7 out of the top 10 players have a market share of less than 5%. Local giant companies or conglomerates such as Vinamillk or Vingroup are planning to enter the market in the near term.
• Major, compliant players have to compete with much smaller players with sub-standard, counterfeit, and illegal products that are offered at much cheaper prices.

Other Industries