Sweden-based direct selling beauty company Oriflame is expecting its skincare and wellness products to make up 50 per cent of their sales in India by 2021 and has been expanding its product portfolio rapidly in these two categories to drive future growth in the country. Business Today talks to Sergei Kanashin, Senior Vice President (SVP) and Head of South Asia and MD, Oriflame, on the relevance of the direct selling business model in the increasingly digital world at the sidelines of the launch of the new product range Optimals.
As more and more consumers purchase online, how relevant is direct selling in today's digital world?
Direct selling and e-tailing are different things entirely. The fundamental of a direct selling business is a recommendation from a friend whom you trust, believe in and is capable of inspiring. For instance, if a friend recommends a hotel or a restaurant and also ranks it on TripAdvisor you are more likely to try it out. Direct selling is very similar to this where people who love our products spread the word.
What is important to us is where you are hearing about our products first, and then you find which can be through two options - one is people can buy from consultants or they can register themselves as a consumer and buy from us directly. It is this new addition where consumers can buy is a new dimension in the business and in that sense we are no different to an e-retailer and maybe we are more advanced than them because we are leveraging the power of communities and the human connect and then combining it with technology to get the products to the user.
In fact, digital is one of our most important strategic focuses as people are increasingly on mobile and we are moving a lot of our process online. In markets such as China, Indonesia, we use platforms such as WeChat, Viber, Facebook etc to share information and train consumers and consultants. I believe human interaction will always be important and we will never be 100 per cent digital. We like to go to restaurants, meet friends but things that save time such as training can happen online.
As India's skincare and cosmetic market becomes crowded with foray of premium international brands and several new national players, what will be Oriflame's proposition?
India is a huge market and its middle class consumer will double in the next few years. So, there is space for everyone in the market. Also, consumers here have more disposable incomes that they are ready to spend. Also, earlier brands which were exclusive and expensive for the masses and now suddenly affordable because of the increasing spending power of the Indian consumer.
Our position from the inception of the company, 50 years back, is pretty strong. Our aim since then is to be affordable for people. So, if you compare a product with similar benefits, we most likely we will be very close to them on the benefits and effects but we would always be more affordable on price. This is our conscious strategy that our founders implemented when they started the company.
What new launches we can expect in India in the next two years?
We have our top notch brand that we call our Rolls Royce brand, called NovAge. Thereafter, we wanted to create a brand that's competitively priced. So we have recently launched the Optimals brand from Oriflame, which will include three new product ranges - Hydra (for hydration for skin), Even Out (for whitening and to fight pigmentation), and Age Revive (for anti-aging).
We want sales from skincare and wellness products to reach 50 per cent in the next three years, and we will be expanding its product portfolio rapidly in these two categories to drive future growth. Having said that, we will focus especially on anti-aging products as people now are living longer and want to stay young. Next on the cards is a new brand on men skincare products.