At the end of 2019, the owner of FPT Shop – FPT Retail (FRT) chain launched F.Beauty – cosmetic retail chain, with the first store located in Hanoi.
Rong Viet Securities Joint Stock Company (VDSC) acknowledged: After the Long Chau drug chain, F.Beauty is the second step in FRT’s diversification strategy in the context of the current saturated smart mobile market.
Long Chau and F.Beauty, each targeting a segment of the beauty and health care market. While Long Chau follows a traditional pharmacy model focusing on medicines and functional foods, F.Beauty focuses on beauty products.
VDSC quoted Euromonitor’s report as saying that the market of beauty and health care products in Vietnam is worth USD 10 billion (2018) and will grow by 7% per year in the period of 2018-2023. The market is extremely fragmented when the 14 largest chains account for only 1.4% of the market.
The growth in disposable income and the rise of the middle / wealthy class create abundant demand for beauty products, which now comes not only from women but also men.
According to Nielsen, Cosmetic spending per capita in Vietnam is only 4 USD, while that figure in Thailand is 20 USD, showing great potential. Moreover, consumers are also shifting from portable and unknown cosmetics sold online to shop at professional and reputable retailers to avoid counterfeit and fake goods.
“The retail market of cosmetics has many similarities with the retail of pharmaceuticals: a fairly large market with extremely high fragmentation and no dominance.“, VDSC admitted.
“However, compared to drug retail, where FRT mainly competes with small and medium private pharmacies, with cosmetics, FRT will have to compete with many foreign cosmetic chains such as Watson, Guardian, The Face Shop. …, these are businesses with great experience and potential in the industry “.
In addition, if before being acquired by FRT, Long Chau was one of the leading pharmacies with sales per store superior to other drug chains, FRT is building F.Beauty from the beginning.
“Therefore, we have a cautious view on the prospects of the F.Beauty chain“, VDSC analysis said.