Not many companies in the world have tasted success without having reliable distributors and retailers network catering to customers. One such company that has gone this route and, in turn, created an empire with the help of Multi-Level Marketing (MLM), or popularly called Direct Selling techniques is Oriflame Holding AG, the prime cosmetics brand from Switzerland.
Oriflame is a Swedish cosmetics company that was founded some 53 years back, in 1967 by the two brothers Jonas af Jochnic and Robert af Jochnic and their friend Bengt Hellsten in a small office-room in Sweden. Today, it offers beauty and body care products in more than 60 markets with the help of 3.6 million people, which often call themselves ‘Oriflame consultants’.
For over 50 years, the company has enabled people from all over the world to celebrate their beauty and fulfill their dreams. It creates and offers high quality, safe, trend-driven products to beauty lovers and the unique possibility to become part of a global beauty community.
Product Portfolio
Oriflame offers a wide range of product portfolio with some eternal favorites and rest exciting. Customers are provided over 900 cosmetic products ranging from skincare, personal and hair care, wellness, accessories, fragrances, and color categories.
Wellness by Oriflame – This is a supplementary nutritional range by Oriflame that aims to focus on helping you find a balance that gets us fit, naturally. It is based on a healthy Nordic diet; realistic routines and advice to help you make lasting changes, and also offers a passionate and supportive community of like-minded individuals you can engage in fun wellness activities with.
NovAge – This is a premium skincare range offers a series of scientifically advanced skincare ranges, customized to target women and men’s skin-aging needs
THE ONEÂ – The ONE delivers high-performing cosmetic technologies with a wide choice of make-up shades based on the latest trends, with user-friendly application tips and inspiring get-the-look guides.
Giordani Gold – This make-up brand embodies a luxe sensibility with a holistic approach to beauty, delivering superior performance, sensorial moments, and uniquely crafted make-up and fragrance experiences.
LOVE NATUREÂ – Celebrating simple, natural ingredients that smell and feel fantastic, Love Nature products have been created to benefit both your body and the planet. All Love Nature rinse-off products are biodegradable, hair products are silicone-free, and exfoliants have natural-origin beads.
SWEDISH SPA – The multisensorial home spa range contains powerfully potent Swedish ingredients and unique, indulgent textures to relax the senses and revitalize the body – the Swedish way.
Marketing Strategy
Network Marketing
Oriflame is one of the world’s leading Network Marketing companies. It was launched with a vital and innovative business concept, a concept so ahead of its times that it has eliminated the requirement of retailers. Since then, the company has given a chance to people in Europe, Asia, Africa, and America, the opportunity to start their own business.
Since the company has established, it has marketed its products through its force of consultants. These consultants are nothing but the ordinary people who buy Oriflame products through other people, often termed as consultants. These potential customers are made the members of the company under a particular consultant. The members are given discounts and offer that they can avail if they add more members under their chain. This is the core concept of Multi-Level Marketing, which defines the company’s business model.
Online Selling
The company also sells its product online. It has a robust catalog displaying all the products along with the price list, which is currently present on its website. Hence, by providing the products online, Oriflame offers the ultimate shopping experience to the customers, which in turn supports the consultants in expanding the business.
Alongside the website, social media plays a crucial role in sales and recruitment activities, supported by PR, sponsorship, events, leaflets, and for significant launch – TV, print, and billboard advertisements.
SARPIO – Sales and Recruitment Processes In Oriflame
As Oriflame considers sales and recruitment as a critical activity to bring in more business, it makes use of specific tools to assist the sales consultants. SARPIO is the global platform for processes, training, and communication. It has been developed to support and train consultants managing the sales and their business but also to make sure that everyone involved in the brand communication consistently conveys the Oriflame brand.
This tool also helps the consultant to track the performance of their network and identify action areas that can improve business effectiveness.
Financial Overview
Oriflame aims to achieve local currency sales growth of approximately 10% per annum and an operating margin of 15%. Over the next five years, the group will continue to invest in the growth organically, with capital expenditure on existing and new manufacturing activities and also through expansion in new markets.
The company was able to achieve 1.3 billion Euros in sales in 2018, with an operating margin of 11.3%. Sales in Asia witnessed a growth of 7%, in Latin America, it was 2%, and in Europe and Africa, it was around 1% in local currency sales.
Read the annual financial statement for FY 2019 here: Oriflame Annual Report 2019
Success Factors
Staying true to the original business concept
For more than 50 years, Oriflame has remained true to its original concept of Swedish natural cosmetics and the entrepreneurial culture. Today, it is one of the fastest-growing cosmetics companies selling directly in over 60 markets.
Continuously improving the offering
Oriflame’s business concept – “Make Money Today and Fulfill Your Dreams Tomorrow,” tells the story. It offers people an opportunity to start earning money the day they joined the company as an independent consultant. This business concept is based on four strategic cornerstones – Brand & Beauty, Network Marketing, People & Culture, and World Class Service. By continuously working on these principles, it thrives on improving itself and hence improves the earning opportunity and consumer offerings.
Well-Positioned in a growing industry
The combination of a beauty products company and the direct selling model is surely well-positioned for future growth, and Oriflame is one of the leaders of the industry, growing faster than most of the competitors.
Globalization has opened up the world, and a lot of emerging markets are the perfect fit for the network selling model that the company confidently boasts about.
Also Read: Amway – Networking Its Way To The Customers
Market and Supply Chain
Oriflame produces 60% of the product volume in its internal facilities and buys 40% of the products from the external suppliers.
For internal manufacturing, the company has production plants in Poland, Switzerland, Russia, India, and China.
Third-party suppliers are mostly located in Europe. Every year, a few new suppliers are added, and some are removed for manufacturing the products that require specific technology such as color cosmetics (eye pencils), skincare (capsules), wellness, personal & hair care (bar soaps) as well as some specific fragrance products.
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