For more than 40 years, Oriflame has remained true to its original concept of natural Swedish cosmetics and an entrepreneurial culture. Today, Oriflame is one of the fastest growing international beauty companies, selling direct in more than 60 countries worldwide.
Continuously improving the offering
Through its unique business concept – Make Money Today and Fulfil Your Dreams TomorrowTM, Oriflame offers the leading business opportunity for people who want to start making money the same day they join and work towards fulfilling their personal dreams and ambitions.
A sales force of approximately 3.5 million independent consultants has seized this opportunity and is successfully marketing Oriflame’s broad portfolio of Swedish beauty products, together creating annual sales exceeding €1.5 billion. The Oriflame “Business Opportunity Concept” is built on four Strategic Cornerstones; Brands & Products, Network Marketing, World Class Service and People & Culture. By continuously improving the earning opportunity and consumer offering, Oriflame will attract an increasing number of consultants. By consistently evaluating and prioritising with the consultants in focus, management shall ensure that the allocation of resources is optimised.
Direct selling – a modern sales method
Direct selling may seem as a traditional sales method best suited for emerging markets without a developed retail market. However, lately new consumer behaviour has been putting traditional retail to the test, for instance the growing demand for home deliveries, personal shoppers and, in particular, online-shopping, which is now the most customised, routine and predictable way to shop. The retail industry is forced to find new methods, services and market channels in order to survive. Direct selling is meeting new market conditions in a rather progressive manner; adjusting the shopping experience to the consumer regarding timing, place, entertainment and personal approach.
Moreover, the key source of consumer information is becoming word of mouth, spread in internet forums, blogs, fan clubs or during informal gatherings with friends, particularly when it comes to shopping for cosmetics. Consumers prefer advice based on personal experience, confirmed by a broad and well-known network of references. The direct seller is a familiar and trustworthy source of information about the product, brand, company, industry and supplier. As the competition for consumers’ attention and confidence increases, direct selling offers a unique way of gaining loyal customers.
It gives me great pleasure and satisfaction to watch our consultants being recognised for their great work during our meetings. To me, that is what Oriflame’s culture is all about – coming together to fulfil dreams.
Sales Manager, Thailand
A strong competitor
Being a cosmetics company selling direct means that Oriflame competes both with major cosmetics manufacturers for end customers as well as with other direct sellers for consultants. In Eastern Europe, direct sales as a channel is estimated to have more than 20 percent of the total cosmetics and toiletry market, compared with the global average of approximately 11 percent. The two largest cosmetics companies in Eastern Europe selling direct are by a wide margin Oriflame and Avon, but there are many other direct sellers competing for consultants, such as Russian Faberlic, American Mary Kay and Amway. Moreover Oriflame competes with global manufacturers such as Procter & Gamble, L’Oréal, Beiersdorf, Unilever and Kalina. In Latin America, direct selling is very popular and, in some countries, represents about 30 percent of the cosmetics and toiletry market. Oriflame is still a small player competing with Avon as well as local companies such as Natura, Belcorp, Yanbal and Jafra. Asia’s beauty market is dominated by Unilever, Procter & Gamble and L’Oréal. However, direct sales have a significant share of the market in many Asian countries. Amway and Mary Kay are the largest direct sellers in China, while Amway and Oriflame have the largest market shares among direct sellers in Indonesia and India.
Well-positioned in a growing industry
The beauty and direct selling industry is well-positioned for future growth and Oriflame is one of the leaders in the industry, growing faster than most of its competitors. Globalisation has opened up extensive potential markets around the world where Oriflame’s business model has a very good fit. The Company has a sales force of approximately 3.5 million independent consultants and over 8,000 employees in countries worldwide, managing everything from research, manufacturing and logistics to distribution of catalogues and marketing. The global platform keeps Oriflame close to fashion trends and customer preferences in different markets.
In total, the global market for cosmetics, personal and hair care increased by 5.2 percent in 2010 amounting to €288.8 billion. During the same period Oriflame’s total sales increased by 8 percent in local currency. For the next five-year period, the global market for cosmetics and toiletries is forecasted to grow by an annual average of 2.7 percent at constant prices, reaching €330.0 billion in 2015, according to Euromonitor. Skin Care is expected to be the fastest growing product category with a 6.1 percent annual increase on average between 2010–2015 in the markets where Oriflame is present.
| Oriflame Annual Report 2010