Green is the new black. Can fashion and luxury really be sustainable, globally?

Is the global fashion and luxury industry becoming more sustainable?
Has sustainability reached the Asian markets?
Is sustainability out of fashion in the US?
Is Europe the pioneer?
Do sustainable brands command higher valuations from investors and in M&A?

The fashion and luxury industry, valued at trillions of dollars globally, stands at a crossroads in 2026. Once synonymous with excess and rapid consumption, the sector is increasingly pivoting toward sustainability amid mounting environmental pressures, regulatory demands, and shifting consumer expectations.

This transformation is not merely cosmetic; it involves rethinking supply chains, materials, and business models to align with circular economy principles. As climate impacts intensify, sustainability has evolved from a niche concern to a strategic imperative, influencing everything from design to investor decisions.

Recent data shows that, while progress is uneven, sustainability is reshaping the industry’s future.

While the sustainable fashion segment is expanding significantly faster than the traditional market—growing at rates up to 10 times higher than the broader industry’s 2%-3%—there is a recent, visible de-prioritization of sustainability in corporate boardrooms due to economic volatility and inflation-squeezed consumers.

In 2025, only 18% of fashion executives ranked sustainability as a top-three risk for growth, a sharp decline from 29% in 2024.

And yet, for the next generation of industry executives, and consumers, sustainability is paramount.

I. Global Market Dynamics: Progress vs. Pressure

The fashion and luxury industry remains one of the world’s most resource-intensive sectors, contributing ~9% of global carbon emissions. Despite this, a fundamental shift is occurring.

The global sustainable fashion market reached US$12.5bn in 2025, with projections suggesting a compound annual growth rate (CAGR) of 9.9% through 2032.

This growth is driven by:

Generational Demand: 65% of Gen Z consumers prefer purchasing from sustainable brands, and are often willing to pay premiums for values-aligned products.
Technological Integration: Emerging technologies such as AI-driven virtual sampling, 3D design tools, and blockchain traceability play an increasing role in reducing waste and improving supply-chain transparency
Circular Business Models: Resale and rental now account for roughly 10% of global apparel sales.

However, a “Sustainability Paradox” exists. While 70% of executives view sustainability as a key growth driver by 2030, two-thirds of brands currently lag behind their 2030 net-zero goals.

II. Regional Leadership: Europe as the Regulatory Pioneer

Europe remains the global regulatory leader in sustainable fashion and luxury, setting the pace not through voluntary pledges but through binding policy frameworks that are reshaping how apparel and luxury goods are designed, produced, sold, and recycled.

At the core of this shift is the European Union Strategy for Sustainable and Circular Textiles, which aims to transform the sector by 2030. The strategy prioritizes durability, repairability, recyclability, and reduced environmental impact across the full product lifecycle, signaling a structural move away from fast-turnover consumption models.

Major brands operating in Europe—including Adidas and H&M—have aligned with these objectives through commitments around preferred fibers, traceability, and circular product design. While approaches vary by brand, Europe has emerged as the testing ground where sustainability moves from aspiration to operational reality.

Crucially, Europe’s leadership lies not only in ambition, but in enforcement. The region is transitioning sustainability from a reputational issue into a compliance requirement, with direct implications for cost structures, supply-chain transparency, and product economics. This regulatory certainty is already influencing global sourcing decisions and accelerating investment in recycling, resale infrastructure, and material innovation.

Regulation	Implementation / Impact
Waste Framework Directive	Requires mandatory separate collection of textiles by January 1, 2025; introduces Extended Producer Responsibility (EPR) schemes.
Ecodesign (ESPR)	Sets minimum standards for product durability and reparability; bans the destruction of unsold goods for large brands starting in 2026.
Digital Product Passport (DPP)	Mandatory by 2027–2028; requires detailed information on material composition and recyclability for all products sold in the EU.
Green Claims Directive	A proposal aimed at preventing unsubstantiated environmental claims.

III. The Asian Market: From Production to Conscious Consumption

Sustainability is gaining traction across Asian markets, particularly in China and India, driven by younger, urban, and increasingly affluent consumers. While rarely the primary purchase driver, it is becoming a meaningful secondary consideration in fashion and luxury—especially among Gen Z and Millennials.

Asia-Pacific is widely forecast to be the fastest-growing region for sustainable fashion, supported by high-single-digit growth projections through 2032. This momentum reflects both rising consumer awareness and Asia’s central role in global apparel supply chains, where decarbonization and traceability efforts increasingly originate.

Consulting research, including McKinsey analysis, frames sustainability in Asia as a long-term strategic priority rather than a short-term sales lever. Progress is most visible on the supply side, with collaborative decarbonization initiatives in manufacturing hubs such as Bangladesh, Vietnam, and India becoming essential to meeting global brand requirements.

Adoption remains uneven, however. Recycled polyester continues to dominate sustainable materials due to cost constraints and limited access to next-generation fibers, highlighting ongoing challenges related to price sensitivity, infrastructure, and regulatory diversity across the region.

Key trends in Asia include:

Rise of the Second-hand Market: China’s secondhand luxury market grew by 18% in 2025, supported by livestreaming and a growing acceptance of circularity.
Sustainable Retail Design: Landlords in SE Asian malls are increasingly requiring “green” interior design, focusing on modular fixtures and low-carbon materials to reduce construction waste.
Cultural Connection: The guochao (national tide) movement in China blends heritage and local identity with sustainable craftsmanship.

IV. The US Market: A Resilience Test

Sustainability is not “out of fashion” in the US, but it is under pressure. Younger consumers continue to express strong concern about environmental and social issues, even as inflation, price sensitivity, and the appeal of fast fashion constrain purchasing behavior. The result is a persistent gap between values and action.

Recent analysis from McKinsey & Company highlights that US consumers are prioritizing wellness, experiences, and value over discretionary apparel spending. In this environment, sustainability is increasingly viewed as a long-term brand and loyalty lever, rather than a short-term growth driver.

At the executive level, The Business of Fashion reports that priorities have shifted toward AI, cost control, and operational resilience. However, sustainability has not disappeared from the agenda; instead, it is being reframed around risk management, supply-chain transparency, and regulatory compliance rather than marketing-led initiatives.

Regulation is becoming the primary force sustaining momentum. In California, new disclosure and accountability rules around emissions and supply chains are coming online, increasingly echoing European-style standards. While many US executives remain focused on near-term profitability amid weak demand, the regulatory trajectory suggests sustainability will remain a structural requirement—if no longer a headline ambition.

V. Investment and Valuations: Sustainability as a Core Metric

Sustainability and ESG factors have become “hardwired” into the investment process for mergers and acquisitions (M&A).

Due Diligence: Approximately 22% of corporate and 24% of private equity acquirers now place an emphasis on sustainability during due diligence.
Valuation Impact: Modern AI-powered tools allow investors to surface risks like child labor or human rights violations deep within supply chains, which can significantly damage company valuations.
Sector Growth: Venture capital is heavily flowing into innovative materials companies and resale platforms, as sustainable fashion’s growth trajectory outpaces traditional retail.

VI. Circular Economy Leaders: Six Brand Profiles

Several global brands are shifting from pilot programs to large-scale circular initiatives.

Gucci (Kering Group): A high performer in circularity, Gucci has embedded circular design into its core and offers lifetime repair for many items to extend product longevity.
Stella McCartney: Long a pioneer in material innovation, the brand focuses on bio-based materials and low-impact designs, partnering with venture firms to scale sustainable textiles.
Patagonia: Regarded as a gold standard, Patagonia integrates circularity through its Worn Wear resale program and a senior-level focus on social impact and transparency.
Coach: The brand has embraced circularity at scale through its Coachtopia sub-brand, which utilizes bulk buys of “rescued” leather scraps to create new luxury goods.
Arc’teryx: A recent leader in circularity, this outdoor brand joined the Ellen MacArthur Foundation to focus on mono-materials and garments designed specifically for easy disassembly and recycling.
Lululemon: Beyond its “Like New” resale program, Lululemon is investing in enzymatic recycling technology to turn textile waste back into high-performance recycled nylon.

Conclusion

The global fashion industry is no longer treating sustainability as a marketing trend but as a structural necessity for long-term viability.

While economic headwinds in 2025 caused some tactical retreats, the combination of aggressive EU regulation, high consumer demand in Asia, and the increasing role of ESG in M&A valuations suggests that circularity is becoming the new industry blueprint.

If you want to win in fashion and luxury – you must look forward, and you must act responsibly.

BDA Partners successfully hosted its 7th annual Private Equity Conference in October 2025 in Singapore, bringing together 30 high-growth private companies, and senior professionals from 100 leading private equity firms.

The BDA PE Conference remains a premier, invitation-only platform for the Asian private equity community. It offers a unique forum for companies and investors to engage in high-quality one-on-one meetings.

This year, we proudly featured private companies spanning six sectors: Industrials, Healthcare, Consumer, Technology, Services, and Sustainability.

We welcomed attendees from sponsors including: 65 Equity Partners, ADV, Advantage Partners, Advent, Affinity, Affirma, AGIC, AIF, Apollo, Ares, Bain, BlackRock, Blackstone, Boyu, Brookfield, Capital Square Partners, Carlyle, CDH, Celadon, Cerberus, ChrysCapital, CLSA, Cool Japan Fund, Cornell Capital, Creador, CVC, DAOL, DCP Capital, DBJ, Dymon Asia, EastBridge, EQT, Everstone, Falcon House, GIC, Goldman Sachs Asset Management, Growtheum, Gulf Capital, Hillhouse, HongShan, HOPU, ICG, IMM, Investcorp, InvestIndustrial, Khazanah Nasional, KKR, L Catterton, Longreach, Macquarie, Marubeni Growth, MBK, Morgan Stanley Global PE, Navis, Nexus Point, Novo Tellus, OTPP, PAG, Partners Group, Permira, Platinum Equity, Primavera, QIA, Quadria, SeaTown, Shaw Kwei, Stonebridge, TA Associates, Temasek, TPG, Vitruvian, Warburg Pincus.

We orchestrated 300 one-on-one meetings between presenting companies’ CEOs, Chairmen, founders, CFOs, and senior private equity investors. These interactions enabled in-depth discussions of potential partnerships, identification of strategic opportunities, and the cultivation of future relationships.
Sector & region panel discussions featured leading industry experts, providing actionable insights:

Models for Successful Specialty Healthcare Providers in Asia, moderated by Andrew Huntley, Managing Partner & Global Head of Healthcare, BDA Partners.
- Panelists were Ewan Davis, Partner at Quadria Capital, alongside CEOs and founders of presenting healthcare companies.

The panel explored innovative growth strategies and sector trends.

Korea Wave: Investment Opportunities in Korean Businesses Going Global, moderated by Euan Rellie, Co-founder & Managing Partner of BDA Partners. Featured insights from:
- Jonghyun (Elliott) Tcha, Founding Partner & CEO, Tcha Partners Asset Management;
- Chulmin Lee, Managing Partner, VIG Partners;
- Hae-Joon (Joseph) Lee, Partner, IMM Private Equity;
- Brian Um, Managing Partner & CEO of DAOL Private Equity; and
- Howard Lee, Partner & Head of Seoul Office at BDA Partners.

The panel examined cross-border buyouts, platform strategies, and the worldwide expansion of K-Food and K-Beauty brands.

PE Opportunities in Asian Industrial Technology and EMS Businesses, moderated by Simon Kavanagh, Partner & Head of Industrials at BDA Partners. Panelists were:
- Haide Hong, Senior Managing Director at Blackstone;
- Goh Soo Jin, Founder & CEO of Prime Movers Equity; and
- CEOs and CFOs of industrial presenting companies.

The panel discussed investment opportunities in technology-driven industrial platforms and scaling strategies.

Paul DiGiacomo, Managing Partner and Head of Financial Sponsors at BDA Partners, said: “The conference showcased a market full of promising opportunities ahead – for portfolio companies and for private equity investors. BDA’s role is: trusted advisor to our clients, across industries, connecting visionary management teams with the right investors. We help turn strategic ambition into tangible growth. The 2025 conference reinforced BDA’s commitment: facilitating meaningful, long-term partnerships, to drive value across the region.”

Industry panel discussions

Sector wine tasting dinner

About BDA

BDA Partners is the global investment banking advisor. We are a premium provider of advice to sophisticated clients globally, with 30 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn clients’ trust by delivering insightful advice and outstanding outcomes. BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese government-owned bank with US$150bn of assets.

US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc, a broker-dealer registered with the SEC. BDA Advisors Inc is a member of FINRA and SIPC. In the UK, BDA Partners is authorized and regulated by the FCA. In Hong Kong, BDA Partners (HK) Ltd is licensed and regulated by the SFC to conduct Type 1 and Type 4 regulated activities to professional investors. bdapartners.com

As we begin 2026 with a record book of business, BDA Partners is pleased to recognize advancements across our team. A solid number of colleagues are being promoted, reflecting their continued growth, impact, and commitment to the firm.

Promoted to Partner
Cliff Li, Hong Kong

Promoted to Managing Director
Phuoc Pham, Ho Chi Minh City
Ruari Sinclair, London

Promoted to Director
Andreas Messerschmidt, London
Nils Weng, London

Promoted to VP
Teddy Kim, Seoul
Ryota Kobayashi, Tokyo
Minh Pham, Ho Chi Minh City
Chenge Sun, Singapore

Promoted to Associate
Mahimn Bhatt, Mumbai
Harsh Jogani, Mumbai
Iris Lai, Hong Kong
Nien Le, Ho Chi Minh City
Drake Mitsukawa, Tokyo
Vishva Shah, Mumbai
Ke Yew Wong, London

Please join us in congratulating them and wishing them considerable success in their new roles.

With warm regards.

Euan Rellie, Andrew Huntley, Paul DiGiacomo

Managing Partners

BDA Partners will celebrate its 30th year of doing business in 2026.

BDA is a premier global investment banking firm, specializing in cross-border M&A, capital raising, and financial restructuring.

BDA is exceptionally well-positioned for 2026.

BDA’s 2025 performance featured 20+ announced deals, including the landmark $2.35bn Coforge-Encora acquisition. BDA worked on transactions involving Advantage Partners, Advent, Bose, CDIB Capital, DAOL Private Equity, Flipspaces, Frasers, Marunouchi Capital, Multiples, Northstar, Oji Paper, Warburg Pincus, Wartsila and Woori Private Equity.

This underscores BDA’s robust momentum and leadership in global and Asia-focused transactions. With nine offices (New York, London, Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul, Tokyo) and strategic partnerships with William Blair and the Development Bank of Japan, BDA is primed to capitalize on the Asia-Pacific M&A revival, falling interest rates, and strong demand in the Tech Services, Consumer, Health, and Industrials sectors.

We’re grateful, always, to our clients, our counterparties, our shareholders, our families – and to our talented and hard-working colleagues. We’re excited for the coming year.

At the recent Vietnam M&A Forum in Ho Chi Minh City, BDA was recognised as The Outstanding M&A Advisor for 2024–2025.

Organized by Vietnam Investment Review (VIR) under the auspices of the Ministry of Finance, the Vietnam M&A Forum has become a prestigious annual event for M&A and investment networking.

This marks BDA’s sixth win in a row, underscoring the strength, agility, and resilience of our Vietnam platform, and the trust of our valued clients.

The 2025 Forum, themed “New Position – New Momentum”, brought together leading domestic and international businesses to celebrate excellence in M&A.

Huong Trinh, Partner and Head of Ho Chi Minh City at BDA Partners, accepted the award on behalf at the ceremony held on December 9^th at the JW Marriott Saigon.

Huong Trinh said: “We’re thrilled to share the news that BDA has been named VIR’s Outstanding M&A Advisor for 2024–2025. It’s a remarkable sixth consecutive win. As the market moves forward with renewed vigor, this recognition shines a spotlight on the strength, agility, and resilience of our Vietnam platform. We’re grateful for the unwavering support of our blue chip and fast growing clients. We’re appreciative of our hard working, highly effective team members. We look forward to creating new growth opportunities, and delivering exceptional results, in the year ahead”.

About BDA

BDA Partners is the global investment banking advisor. We are a premium provider of Asia-related advice to sophisticated clients globally, with 30 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes. BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese government-owned bank with US$150bn of assets.

US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc, a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc. is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorized and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. bdapartners.com

BDA Partners Ho Chi Minh City office is active in the healthcare sector. Huong Trinh, Partner and Yen Pham, VP at BDA Partners wrote an article for Vietnam Investment Review.

Vietnam’s healthcare sector closed 2025 with robust M&A momentum. Transactions from institutional investors demonstrated the market’s depth, while established platforms backed by private equity pursued add-ons and expansion. The year demonstrated that Vietnam is achieving multiple growth vectors simultaneously.

Notably, Livzon Group acquired 65% in Imexpharm from SK for $221m. Through this deal, Livzon secured access to Imexpharm’s four EU-GMP certified plants and its 10% share of the domestic antibiotics market.

This acquisition underscores a market reality: given strict restrictions on foreign pharm distribution, buying established manufacturers remains the most efficient path to market access.

The rationale extends beyond domestic access. Vietnamese manufacturers with international certification serve as contract manufacturing platforms for ASEAN, offering regional cost-effective production bases with preferential trade access through Vietnam’s free trade network.

Healthcare services dominated deal activity, attracting institutional investors and funds. Two platform investments captured attention. Ares’s Medlatec investment was the global investment manager’s first healthcare bet in Vietnam. Quadria Capital’s Tam Tri Medical acquisition brought Quadria back into Vietnam’s hospital sector after it exited FV Hospital in 2023.

Next year, PE-backed platforms such as Xuyen A (Warburg Pincus), Phuong Chau (CVC), and Mat Sai Gon (KKR) will pursue bolt-ons for geographic expansion or speciality capabilities.

Exit opportunities will also emerge, as PE investments from 2020-2022 are approaching their natural hold periods. Successful exits will establish new valuation benchmarks for Vietnam. Exits demonstrating good returns will validate the investment thesis and trigger increased capital allocation.

Success in 2026 will come to different players: new investors looking to make their first acquisition, existing healthcare operators expanding through add-ons, and healthcare companies preparing for M&A. Vietnam’s healthcare sector is sure to be one of SE Asia’s most active markets.

Read the full article on VIR here.

About BDA

At BDA Partners, we believe in making a positive impact beyond business. Each year, we empower our employees to dedicate a day to volunteer with local organizations—leaving behind laptops, conference calls, and emails; they make a difference in the communities we serve.

In 2025, all our offices participated in BDA CSR Day, illustrating the power of collective action and meaningful change.

Hong Kong

The Hong Kong team volunteered at Crossroads Foundation, a charity dedicated to serving global and local needs. Our team was divided into groups to assist across multiple departments, including processing donated items, maintaining warehouse operations, and assembling furniture for distribution. Tasks ranged from sorting, packing, and refurbishing goods to moving furniture and preparing event spaces. We enjoyed the opportunity to support the community through hands-on involvement.

Ho Chi Minh City

The Ho Chi Minh City team volunteered at TSC Church, which has been providing 400 meal boxes daily to the needy for over 20 years. Our day began in the kitchen, preparing fresh ingredients and cooking meals under the guidance of senior volunteers. By midday, we packaged hundreds of meals and distributed them to families, children, and elderly individuals in the community. The activity showcased the importance of collaboration and efficiency in supporting large-scale food programs. We are grateful to TSC Church for the opportunity to contribute and to our team members for their generous support of the charity fund.

Seoul

The Seoul team volunteered at Wongaksa Free Meal Center, an organization that has provided daily lunches to low-income seniors and homeless individuals since 1993. We donated KRW 1.5 million to support the purchase of food ingredients and assisted with meal service throughout the day. Our team helped distribute, serve, and wash dishes, ensuring 300 people received warm meals. The activity highlighted the operational commitment required to sustain such programs and the impact they have on vulnerable communities. Our Seoul team was happy to assist Wongaksa’s mission and support its long-standing efforts.

Singapore

The Singapore team volunteered at Willing Hearts, a non-profit operating one of the largest soup kitchens in Singapore. The organization prepares and delivers thousands of meals daily to beneficiaries, including the elderly, disabled, low-income families, and migrant workers. Our team assisted with food preparation tasks such as washing, peeling, and cutting vegetables, as well as sorting bulk ingredients for distribution. The visit offered insight into the scale and efficiency required to sustain such an operation and the critical role volunteers play in its success.

Tokyo

The Tokyo team participated in a community cleanup organized by the local residents’ association near our office. Alongside more than 100 participants, we collected litter around the neighborhood, including cans, bottles, and cigarette butts. After the cleanup, participants enjoyed complimentary coffee from Starbucks, reinforcing the sense of community and shared responsibility.

London

The London office participated in a year-long mentoring program with Envision, a charity focused on helping young people build confidence and essential skills. Running from September 2024 to June 2025. The project centered on fundraising for women’s safety, with our team guiding students in planning, presenting, and executing their ideas. Additionally, the office joined Shelter’s “Walk for the Homeless,” a charity walk supporting individuals facing housing challenges.

New York

The New York team volunteered at Housing Works Bookstore in Soho, supporting their mission to help individuals affected by homelessness and HIV/AIDS. Our team assisted with sorting donated books, identifying ISBN numbers, and categorizing items for online sales. We also audited bookshelves to ensure accurate inventory and removed titles scheduled for de-listing. We appreciate the opportunity to contribute to their impactful work and support the local community.

About BDA Partners

The global streetwear narrative has shifted irrevocably. Globally, the category is stabilizing, but across Asia, momentum is accelerating. The region has become the creative, cultural, and commercial engine driving the next chapter of streetwear.

Japan is the blueprint. Japan remains the creative foundation of modern streetwear. Harajuku and Ura-Hara transformed global skate and hip-hop influences into a uniquely Japanese aesthetic defined by craftsmanship, scarcity, and subcultural authenticity. Human Made’s IPO on the Tokyo Stock Exchange, slated for November 27, 2025, underscores how Japanese streetwear has evolved from niche subculture to institutional-grade business. The offering, priced at the top of its range, highlights how premium Japanese brands, rooted in heritage and authenticity, are attracting global capital and investor confidence.

Korea is the amplifier. K-pop and K-hip-hop turn niche labels into global names overnight, and stylists often drive more influence than designers. Airport fashion, social media, and MV styling act as real-time runways, powering brands like thisisneverthat, ADER Error, We11Done, and rising star Thug Club. In Korea, speed and visibility define success.

China is the commercial engine. China’s streetwear boom is powered by guochao—movement blending youth identity, cultural confidence, and modern design. Combined with the world’s most advanced digital commerce ecosystem, trends move from discovery to nationwide adoption in hours.

The convergence of Asian creativity, culture, and trends is crating the most compelling investment opportunity in a generation. The question is no longer if Asian streetwear will lead, but which brands will define the next decade.

BDA is at the nexus of this transformation. With deep regional expertise and a global M&A track record, BDA supports clients across the streetwear value chain—from identifying emerging brands to structuring cross-border partnerships and acquisitions. Asia is shaping the future of global streetwear, and BDA is ready to help investors and corporates capture this next wave of growth.

Read the full article here.

About BDA

BDA Partners’ Ho Chi Minh City team spoke with DealStreetAsia about healthcare investing in Vietnam. The interview examines why venture-backed healthtech platforms have struggled post-pandemic and why private equity interest in traditional healthcare assets remains strong.

Key perspectives from BDA Partners:

“The shift is towards hybrid models where digital serves as an access point but must be integrated with physical infrastructure to deliver sustainable value. Pure-play telemedicine has not found a strong product market fit in Vietnam’s context,” said Huong Trinh, Partner and Head of Ho Chi Minh City at BDA Partners
“In contrast to venture-backed startups, PE investors are targeting operators with real assets and recurring revenue. They see value in consolidation and operational improvement plays rather than in subsidising user acquisition for unproven digital models,” Trinh explained
“These ambiguities create a regulatory risk premium. As such, investors might apply a discount on valuations to account for compliance uncertainty,” added Trinh
“Financial sustainability has become a central investment criterion. Investors look for startups with a clear path to profitability and proven unit economics at their current scale,” said Yen Pham, Vice President of BDA Vietnam
“The unifying theme across these opportunities is the appeal of healthcare models that combine a physical footprint, insurance reimbursement, and solid unit economics. In contrast, pure-play digital health ventures are expected to remain niche in the near term, pending greater regulatory clarity and more mature payment infrastructure,” Trinh concluded

Read the full article on DealStreetAsia here.

About BDA

Demand across Southeast Asia is moving rapidly up the value chain—from basic liquid milk toward yogurt, cheese, and functional dairy—driven by urbanization, a rising middle class, and growing preference for premium and health-oriented products.

The region’s dairy market is valued at approximately US$34bn in 2025 and is projected to reach US$46bn by 2030, growing at ~6% CAGR. Consumption remains relatively low—20–30 liters per capita in markets such as Indonesia and Vietnam versus 100+ liters in more mature economies—leaving significant room for growth.

The industry continues to move up the value curve as consumers shift beyond liquid milk into yogurt, cheese, and functional dairy. Investors are backing brands with strong local relevance, integrated supply chains, and clear premiumization potential. Since 2023, both strategic players and private equity funds have accelerated investment—supporting domestic champions, upgrading processing technology, and building regional platforms. Value-added categories are expanding the fastest and delivering stronger margins, setting the stage for sustained deal momentum.

Looking ahead, investors should monitor opportunities that balance growth with supply-chain resilience. Emerging local leaders are scaling quickly—and are becoming increasingly attractive acquisition targets.

Please read our full report here.

BDA is here to help.