New Challenges in the Hair Care Industry

High competition from international brands is one of the biggest challenges in the Hair Care market in Vietnam and globally. Large international brands like Unilever, Procter & Gamble (P&G), L’Oréal, Kao Corporation, and Johnson & Johnson have built strong trust thanks to effective marketing strategies and enormous production scales. This makes it difficult for local businesses and new market entrants to compete in terms of product quality, marketing costs, and production capacity. To create differentiation, companies must invest heavily in finance and technology, which can place financial pressure on smaller businesses (Fortune Business Insights)(StrategyH).

Another challenge is that the cost of natural and organic hair products is often higher than traditional products. Hair care products with natural or organic ingredients tend to have higher production costs due to stringent manufacturing processes and expensive raw materials. As a result, these products are priced higher, making it difficult to reach price-sensitive consumers. In Vietnam, many consumers still lean toward reasonably priced products, creating pressure for businesses to balance quality with cost (IMARC)(Euromonitor).

The risk of changing consumer habits is also a significant challenge. Consumers today have many choices, from international brands to local and organic products. They can easily switch buying habits based on new beauty trends, especially those driven by social media platforms. This makes maintaining customer loyalty more difficult than ever. Businesses need to continuously update and innovate their products and services to meet rapidly changing demands and retain customers (StrategyH).

Sustainable raw material supply is another major challenge for businesses in the Hair Care industry. Producing natural and organic hair care products requires sourcing materials from nature. However, ensuring the sustainability of the supply chain is a significant hurdle. The difficulty in sourcing clean, chemical-free, and environmentally friendly ingredients complicates the process of scaling up production. Companies must invest in developing and maintaining a sustainable supply chain while seeking suitable partners to ensure stable quality and quantity of materials (StrategyH)(Fortune Business Insights).

Finally, legal regulations on products are becoming increasingly stringent, especially for products containing chemicals or those that pose potential risks to consumers. In Vietnam, hair care products must comply with strict regulations regarding ingredients and labeling. This requires companies to invest heavily in testing and adhering to safety standards, leading to increased costs in research and development to ensure compliance with the law (Euromonitor)(StrategyH).