Vietnam has emerged as a lucrative destination for Japanese cosmetics manufacturers, who are looking outside Japan to balance out business following a low gear in their domestic market, an industry website reported Tuesday.

The Japanese cosmetics market is on a downward trend that marketers “have been unable to reverse,” a report on CosmeticsDesign-Asia.com said.

The website, one of the most-read newswires on the cosmetics industry in the Asia-Pacific region, attributed the slumping market to deflation, the growth of multi-functional products, the rise of drug stores, and a declining population.

Beauty firms have thus started to look for alternative markets, and Vietnam is now considered lucrative, the newswire said, citing analysts.

Naris, a cosmetics company based in Hyogo Prefecture, currently  distributes products to the U.S., China, Russia, Hong Kong, Malaysia, Singapore, Indonesia, Thailand, and Kazakhstan.

Vietnam will be the firm’s next destination, according to CosmeticsDesign-Asia.

Naris reported 21.9 billion yen (roughly US$201 million) in consolidated net sales in the fiscal year ending March 31, 2013, according to the company website.

CosmeticsDesign-Asia said Vietnam is a market worth investing in for Japanese beauty firms, as foreign enterprises dominate the country’s cosmetic market.

The average revenue of Vietnam’s cosmetics sector reached $130-150 million between 2009 and 2011, and more than 90 percent of this figure came from foreign companies, the website said, citing data from the country’s chemical cosmetics association.

International firms outplayed Vietnamese businesses on the latter’s home soil thanks to their widespread distribution channels, compared to the lack of innovation and promotional strategies of the domestic rivals, according to CosmeticsDesign-Asia.