Oriflame-Direct Selling

At Oriflame, We are in the business of helping others. Its each and every employees daily inspiration. We
are here to help others fulfill their dreams and by doing so, we also fulfill our own. In moments of
Impossibility, We only see opportunity.
-Jesper Martinsson
Chief Operating officer
Business model:
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 through its unique business
concept Make Money Today and Fulfil Your Dreams Tomorrow.
A sales force of approximately 3.2 million independent consultants has seized this opportunity and is
successfully marketing Oriflames wide portfolio of Swedish, natural, innovative beauty products,
together creating annual sales exceeding 1.3 billion.
History in brief:
Oriflame was founded in Sweden in 1967 by the brothers Jonas and Robert af Jochnick and Bengt
Hellsten. They wanted to give people the opportunity to benefit from good skin care and attractive
cosmetics, and they wanted their products to be inspired by the natural beauty that the world associates
with Sweden. Rather than investing in a chain of shops, they decided to move the retail operations into
the homes of Swedish consumers. They had sales consultants all over the country, and each and every one
of them had the heart and ambition of an entrepreneur. The products were distributed to their homes, and
from day one they had a network of potential customers in their friends, colleagues and neighbours.
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 62 countries worldwide.
Business Strategy:
Oriflames strategic focus can be summarised in these seven key points:
Low entrance fee, credit offered and no stock required easy to join and no risk.
Wide portfolio of Swedish, natural, innovative, quality beauty products at affordable prices.
Frequent, dynamic and attractive catalogues with many new products that make selling easy.
Flexible and reliable ordering, delivery and payment system easy to do business with.
Personal growth and development through Oriflame University and SARPIO (Sales and Recruitment
Process in Oriflame) at no cost.
Unlimited earning and career opportunity.
Enjoy a direct selling company with a human touch and a sense of belonging.

Product offering:
Oriflames product offering is building on more than 40 years of skincare and cosmetics expertise
combining the wisdom of nature with the best of science. The Company is providing a wide assortment
of distinct product brands at affordable prices:

Skin Care
Fragrance
Accessories
Color Cosmetics
Personnel & Hair Care
Wellness

Direct selling What & Why

In summary, todays way of life with its advantages as well as limitations has resulted in a change in
consumer behaviour
and an increased demand for timesaving services. Therefore, by addressing each household as a point of
sale, combining entertainment and shopping and last but not least, using reliable connections as door
openers to new clients, direct selling will keep growing, in tune with time.
Trust is a vital measure for PR when the objective is to generate consumer confidence in a product
message benefit or educate the consumer on a topic. The key source for consumer information used to be
formal marketing material or personal advice from shop assistants, but now it is more word of mouth
spread in Internet forums, blogs, fan clubs or during informal gatherings with friends.
This trend is particularly strong when it comes to shopping for cosmetics according to a recent survey
among 3,500 women
in Sweden. Consumers prefer advice based on personal experience, confirmed by a wide 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
is offering a unique way of gaining loyal customers
Todays way of life with its advantages as well as limitations has resulted in a change in consumer
behavior and an increased demand for timesaving services. Therefore, by addressing each household as a
point of sale, combining entertainment and shopping and last but not least, using reliable connections as
door openers to new clients, direct selling will keep growing, in tune with time.
Competitors:
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. Some of the largest
competitors to Oriflame in Eastern Europe are the global manufacturers Procter & Gamble, LOreal,
Beiersdorf and Unilever, while the Russian company Kalina has been very successful in key markets such
as Russia, Ukraine and Kazakhstan. The two largest cosmetics companies selling direct in Eastern

Europe, are by a wide margin Oriflame and Avon, but there are many other direct sellers that compete for
consultants.
Russian Faberlic and the American direct sellers Mary Kay and Amway are some of the companies that
have built a large sales force of consultants during recent years. Direct sales as a channel is estimated to
have more than 20 percent of the total C&T market in Eastern Europe. This is higher than the global
average of approximately 11 percent
Please answer below questions based on given information in case:
1. Comment on concept of Direct Selling, do you think model would be successful in India.
2. Compare and contrast the direct selling model and traditional distribution system bringing out the
merits and demerits of both.
3. Examine distribution system adopted by Oriflame, and give suggestion for succeeding against
competitors like Avon and Amway.
Reference:
http://investors.oriflame.com/index.php?p=reports&s=detail&afw_id=1159512&afw_lang=en