Fierce Competition in Vietnam’s Paint Market

Vietnam is now home to some 60 paint trademarks like Donasa, A Dong, Hai Phong, Kova, Nippon, ICI Dulux, Spec and 4 Oranges. In general, both domestic and foreign paints have the same formula which consists of liquid, pastel, copolymer and adhesives. Thus, the quality depends on the mixture of the above elements, especially copolymer and adhesives.

According to specialists, the paint market is a fertile land for enterprises because consumers now look at beauty and functions. The wet paint market is divided into three grades: high, middle and low. A large majority of paint producers, about 50, is rated low. Instead of competing in quality, they focus on pricing strategies. High-grade paint is sold at VND56,000 - 68,000 per litre, depending on indoor or outdoor uses, while the middle-class is sold at VND18,300 per litre and the low-grade is offered at VND8,800 per litre. Tran Thanh Nam, a salesman of Levis Paint, said: "Low-grade paint is like covering the wall with white wash 10 years ago". High-grade products use organic colours or synthetic pastels, acrylic and other elements to create durability and brightness. The grade of paints depends on materials used. Nguyen Ngoc Phuong, an architect for TAT Company, said: "Several enterprises think good paints must be made from imported materials. Paint prices have increased by 4 - 5 % because of higher prices of input materials.”

 

Most companies have different types of products for customers, with a wide range of prices and the quality is certainly differently, Phuong added. At present, high-grade paints account for 10 % of market share, medium-grade paints 40 %, and low-grade paints 50 %.

It is quite easy to see the dominance of foreign-branded paints in Ho Chi Minh City. Foreign trademarks like Nippon, 4 Oranges, ICI and Jotun occupy a majority of space in paint shops in the city. Domestic consumers tend to use only foreign wet paints because they are more durable and beautiful. In terms of durability, foreign-made paints come in more categories and specifications like anti-rust, waterproof, fireproof, heatproof, anti-moss, anti-dust and other features. In general, they completely protect the outer face of construction works. In terms of beauty, there are thousands of colours of foreign paints for customers. In addition, rich experience and financial capacity enable foreign paint producers to seek strong foothold in Vietnam.

 

However, domestic consumers do not turn their back on locally made wet paints. The list of Vietnamese paint producers is getting longer. Old names include Bach Tuyet Paint and Dong Nai Paint and newcomers are Hai Phong Paint, Dong Tam Paint and Hoa Binh Paint. The increasing presence of paint manufacturers is resulted from the strong expansion of the real estate market. And, paint is a construction material.

 

However, according to paint distributors, domestic producers only focus on internal and external wet paints but they do not have many types. They do not know how to win the trust of consumers. Thus, the Vietnamese market is a very fertile market for foreigners like Nippon, 4 Oranges, ICI and Jotun.