Magnus Brännström has been serving as industry’s global federation WFDSA’s Chairman since 2017. Before this, he was the Seldia (The European Direct Selling Association) Chairman between 2012-2014.

Could you tell us about your education?

I have a degree in business and law from Uppsala University in Sweden. I have also studied languages: German, French and Russian at the university, and it helped me enormously in life and career. I also have gone through military training in the Swedish marines and I am an officer in the reserves.

What was your childhood dream?

To be a truck driver and to travel the world.

What were your past experiences before your current role at Oriflame?

I started my career as junior lawyer at the joint venture building Gland Hotel in St Petersburg, Russia. After that I became Export Manager for Spendrups beverages, based in Stockholm. In 1997 I joined Oriflame as Managing Director Russia and in 2005 I became the CEO of Oriflame.

What do you attribute your career success to most?

I could say, luck. But it probably would be a big exaggeration, though I do believe in luck that you build for yourself through hard work and taking right decisions in the right time. My big career success was possible due to many amazing people surrounding me and following me on this journey. I was always fortunate to have the best people on my team, and I guess it paid off.

What has been your most inspiring moment?

I have a lot of inspiring moments. But if I must choose, it will definitely be connected to my family. It is the moment when I met my wife Maria and understood that she is the one I want to spend my whole life with. It is the moment when each of out three kids were born. I also have a lot of Oriflame moments, connecting to meeting wonderful people who work hard, fulfill their dreams and show others that everything is possible.

Your hobbies?

I am super-fond of sports. We are a very sporty family. I prefer active free time. I run, swim, play hockey, play tennis. The latest hobby that I share with my wife and kids is paddle tennis. Amazing game. Every match is a success and you don’t have to be too skilled. It’s just simple and fun!

I also love animals. We have two dogs and a horse. I am not sure if you can call it hobby as they are part of our family. I do devote lots of my time to them – they give me energy.

How would you describe being a direct selling executive to an outsider?

It is special to work within direct selling or “social selling” as we call it nowadays. My job is both corporate, but it also has a big social component to it, as I am always among people. From different parts of the world. I follow numbers, KPIs and other business metrics. But I also follow amazing stories of people who are all so different but have one thing in common: Their drive! I keep being fascinated and inspired by them changing their lives, becoming entrepreneurs and building full-scale businesses.

What is your biggest achievement at Oriflame?

Despite very turbulent years and becoming a large company, we have been able to grow the business with a consistent focus on our culture of togetherness, spirit and passion, our employees and our brand partners, which made it possible for us to keep the spirit of a small entrepreneurial company. It is obviously not only my achievement – I share it with all my colleagues and leaders.

And your biggest challenge at a direct selling company executive role?

Time. It’s not enough and sometimes it feels it goes too slowly. This year our lives went upside down due to COVID. At the same time, there are some eye-opening experiences that we got, that opened many opportunities. Digitalization of our society and business fast forwarded with at least 10 years. We have so many ideas, so many initiatives. And if I could, I would implement them all at once. But of course, we need to be patient and we are taking it all step by step, constantly adjusting.

What would be your best advice to those who are thinking of joining a direct sales company at a corporate position?

Go for it! As you will make a difference to so many people that you don’t even know.

Click here to read the Q&A’s with other direct selling executives.

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The post Executive Q&A: Magnus Brännström CEO & President of Oriflame Cosmetics appeared first on The World of Direct Selling.

Global sales volume decreased by 4.3% as compared to 2018 and this was happening for the first time in the last four years. However, one should read this with caution due to the nature of Chinese figures as explained below under “Markets”.

Please see below graph for previous years.

MARKETS

In 2018, the United Sates and China had tied for the #1 position in sales in the world. WFDSA announced the U.S. as the global leader by a large margin this time, even though sales in the country was almost flat in 2019.

WFDSA explains this situation, saying, “During 2019, China implement a 100-Day review of the nutrition supplement industry. The disruptive nature of this event affected the availability of some data, therefore the estimate of China sales is based on the data sources available and is directional only.”

Korea ranked the third by a small margin ahead of Germany (each having roughly 10% share). Japan was the 5^th largest market in 2019 (9% share). They were followed by Brazil (5%), Malaysia (3%), Mexico (3%), France (3%), and Taiwan (2%).

The largest ten markets accounted for 78% of global sales. This situation was almost the same in 2018.

From the regional perspective, Africa/Middle East reported the highest growth (11.6%). South Africa is this region’s largest market (42% of regional sales).

Americas also posted 0.7% sales growth. This was mainly due to the growth in South & Central America (3.1%). Sales in North America declined by 0.8%.

Sales increased in Europe by 0.8% and declined in Asia/Pacific by 10.3%.



DIRECT SELLERS

Last year’s sales force figure of 129.9 million people represented a considerable increase from 2018 (up 9.7% from 118.4 million).

The largest number of direct sellers were in Asia/Pacific region (68.4 million or 53% of the global sales force). The second was Americas with 30.9 million (24% share). The U.S. had the largest number of direct sellers (16.4 million) in this region. There were 14.1 independent contractors in Europe.

PRODUCT CATEGORIES

The two largest product categories were still wellness and beauty and these together made about 2/3 of global sales, again in 2019.

“Wellness” remained in 2019 as the largest product group sold globally in this channel, increasing its share from 33% in 2018 to 36%. Asia/Pacific is where this category was the strongest (51% share). Philippines represented the most extreme case in this region where 80% sales was generated by nutrition products.

The second biggest category “Cosmetics/personal care”s share declined to 29% from 31%. Regionally, beauty is the strongest in Americas (33% of total sales). Chile (82%) and Brazil (75%) are this region’s leading beauty markets.

WFDSA states in its reports that some country figures represent the whole direct sales market, some others represent only the volumes of the local DSA members, and some numbers are basically WFDSA estimates. Still, these reports always give us significant indications how the industry is doing.

Click for a review of WFDSA’s statistics for 2018.

(*) WFDSA’s  all sales figures in US Constant 2019 Dollars to exclude the impact of foreign exchange and ensure comparability, using average annual exchange rates from the International Monetary Fund.

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Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.

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The post Global Direct Selling Industry in 2019 appeared first on The World of Direct Selling.

It is evident that we are globally going through unprecedented times. Within this, the direct selling industry is facing immense difficulties. That being said, there are things that can and should be done by company management. Below you will find what several prominent figures of the industry have to say on this. Feel free to add your own comments.

“What will be your most important advice to direct selling companies, in times of the global pandemic?” was the question.

Oscar Canio Arias, Managing Director of Direct Selling Europe

“At the time of writing this article, COVID-19 continues to expand. The priority for the industry should continue being safeguarding the lives of our employees, collaborators and customers. Beyond the health implications, together with the contingency plans being currently implemented, companies should be working on a two-steps approach: 1) In the short term, work to return to business as soon as confinements are over; and, 2) Furthermore, prepare your company for a new post COVID-19 scenario, where both policy makers and consumers’ priorities and behaviour will be heavily shifted by the crisis.”

Tamuna Gabilaia, Executive Director and COO of the WFDSA

“In light of the global CoVid19 pandemic WFDSA is supporting the global direct selling industry by planning virtual global networking sessions for the leadership of direct selling associations and companies to enable them to share best practices and strategies designed to overcome the challenges posed to direct sellers by the CoVid19 pandemic. These challenges range from distribution channel disruption to limitations on the traditional person-to-person business model. Equally important will be ways for companies to innovate with digital sales and the opportunity also afforded by direct selling distance selling that has advantages over retail businesses. While WFDSA’s paramount priority continues to be consumer protection and adherence to the highest standards of ethical business practices enshrined in the WFDSA Code of Conduct, WFDSA will also be a leader in convening and facilitating global events and seminars that explore ways to navigate the challenges of the CoVid19 pandemic while also identifying opportunities that can position direct selling in a competitive posture in the changing marketplace as a consequence of the CoVid19 pandemic.”

Vince Han, Founder and CEO of MobileCoach

“COVID-19 is the first pandemic that many have experienced and the accompanying uncertainty, fear and disruption to jobs and life can wreak havoc on one’s well-being. In trying times, people are going to cling to their most meaningful relationships. More than traditional retail brands, direct sellers enjoy a greater sense of kinship between them and their distributors and customers. This is a time to find ways to genuinely come together as a community. Be there for your community in times of trouble and you’ll enjoy the ensuing goodwill and loyalty for years to come.”

Brenton Kugler, Partner at Scheef & Stone, LLP

“In such an uncertain time, it is critically important for companies to focus on the things they can control rather than spend time and energy on the growing number of things that are beyond their control. For sure, this is easier said than done. If corporate staff is working remotely, provide regular communication, preferably via video conference, to keep employees engaged and focused. Maintain regular contact with manufacturers and suppliers so that your company is prepared for supply chain interruptions. It is critical to maintain operating capital and companies and suppliers should determine if they are eligible for benefits available from the COVID-19 stimulus loan programs.  Most importantly, have a plan in place for quickly resuming full-scale business activity once the pandemic finally ends. You don’t want to be slow out of the gate because opportunities will likely be available to the companies that are the quickest to return to full operating capacity.”

Alan Luce, Senior Managing Partner at Strategic Choice Partners

“My most important advice to direct selling companies would be for them to recognize that this event will forever change us as a society. While the pandemic will eventually recede driven back by science and social distancing, some of the social and business practices that societies and nations have adopted will stay with us for generations. For example, most may not remember that the US Social Security program began during the Great Depression of 1929 as a program intended to alleviate the extreme poverty of senior citizens. This crisis and the social boundaries both imposed and self-activated will, in some ways not fully foreseeable at this time, change the way we think about subjects like the role and size of government, universal income assistance, pandemic and other types of catastrophe planning and preparation, health care as a right or an option, safety nets for independent contractors and how to pay for them and, whether direct selling becomes much more virtual on line rather than traditional person to person. Pay attention to what our most effective online sellers and team builders are doing now! Going forward these may become the backbone of direct selling standard operating procedure. This experience is changing us. We just don’t know all the ways it has yet!”

Peter Maddox, President of the Direct Sellers Association of Canada

“There are so many unknowns right now, so giving advice is a fraught exercise. Nevertheless, here are some things for direct selling leaders to consider both during and post COVID-19: • Look after your people and get the payback in the future – relationships developed during tough times can become enduring and powerful, • Don’t forget ongoing compliance requirements – perhaps more than ever, regulators and others are looking for missteps around product claims and earnings, • Search for ways to grow your business and the economy – without appearing predatory, investigate opportunities to sensitively and intelligently promote the direct selling opportunity, • Work together with your industry colleagues – this is an important time for sharing problems, solutions and best practices with your peers.”

Gillian Stapleton, Executive Director of the Australia Direct Selling Association

“When my team in Australia chose our conference theme for 2020 back in 2019, we had no idea how topical it would actually become. ‘Right Here, Right Now’ is how we are all operating these days and things are changing daily, so planning effectively becomes nearly impossible. Make decisions based on what you know today, and know it will change and you will have to make that decision again. Right here Right now, my three-guiding principles in this time of crisis, when there is no rulebook: Back Yourself, Back Your Team and Make Decisions.”

Kevin Thompson, Partner and Co-Founder of Thompson Burton

“Press! I would encourage anyone to fight through this period. If they come out of this lockdown period without a new skill or a new strategy, they did it wrong. This is the perfect time to reconsider patterns of behavior, keeping the good and discarding the bad. In life, it’s always wise to recalibrate your business goals every few months. We get busy and generally fail to dig deep to think through our strategies. Well now that we’re all shut down, there’s no better time than today.”

Daryl Wurzbacher, CEO of ByDesign Technologies

“Stay Positive! Our industry has a strong history of growth during economic downturns. This current issue is no different. Now is the time to plant seeds with relationship building, supporting your online communities, and preparing for the growth that is just around the corner. This is an excellent time to focus on the fundamentals of your business: optimize your supply chain, develop consistent onboarding, and leverage this as an opportunity to make ourselves and the industry better. Let’s make the direct sales industry the leader in helping people become truly self-reliant.”

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The post In 100 Words: Recommendations in Times of the Global Pandemic appeared first on The World of Direct Selling.

This week’s featured article is a brief compilation of industry news of significance from 2019. As you scroll down, I am sure you will agree with me that it was most certainly another exciting year for the industry with all the positives and the negatives.

I have also included articles from The World of Direct Selling that attracted much interest last year.

> Herbalife CEO Richard Goudis Resigns Over Comments He Made Before Taking the Job
> New Avon Names Laurie Ann Goldman CEO
> Stella & Dot to Exit European Market
> China Launches Campaign to Regulate Health Product Market
> Nerium Gets New Name
> Jeunesse Posts Record Year with $1.46B in Annual Sales
> Mary Kay Celebrates 50 Years of an American Icon – the Mary Kay Pink Cadillac
> LuLaRoe Founders Accused of Hiding Millions to Avoid Creditors

Most-Read Article in January on The World of Direct Selling:
What Direct Sellers Can Learn from the Corporate Training Industry (Vince Han)

> Amway Reports Sales of $8.8 Billion USD in 2018
> USANA Posts Another Sales Increase as China’s Direct Selling Clampdown Looms
> Avon Sees Revenues Decrease in Q4, Full Year 2018
> Herbalife Neared $5 billion Mark in 2018; Waits for Other Shoe to Drop in Goudis/China Probe
> Medifast Announces 87% Revenue Increase in Q4 and 66% for the Full Year
> Nu Skin Expands to Peru
> Skin Care Billionaires Rodan and Fields Return to the Teen Acne Market

Most-Read Article in February on The World of Direct Selling:
The 7 Giants’ 2018 Growth Review (Hakki Ozmorali)

> Fact or Fiction? Let’s Set the Record Straight – US DSA President
> Brazil’s Natura and Avon Confirm Deal Talks
> Nature’s Sunshine Reports $365 Million Sales for 2018, Up 7%
> Tupperware Parties: Suburban Women’s Plastic Path to Empowerment
> Two Mary Kay Executives Make Black Enterprise’s 2019 Most Powerful Women List
> Why Direct Sales Appeals to So Many Moms

Most-Read Article in March on The World of Direct Selling:
Common Pitfalls that Prevent Profitability in Direct Selling Start Ups (Dan Murphy)

> DSN Announces the 2019 Global 100
> Young Living Celebrates 25 Years of Global Growth
> Amway Disrupts Its Own Beauty Business, Launching 50 New Mobile Apps
> More Than 100 LuLaRoe Sellers Have Filed for Bankruptcy
> How Blake Mallen Capitalized on the Gig Economy Before It Was a Thing
> Brazilian Cosmetics Giant in ‘Advanced Talks’ with Avon
> Mary Kay Recognized by Forbes as One of America’s Best Midsize Employers 2019

Most-Read Article in April on The World of Direct Selling:
Marketing’s New Role to Keep A Direct Selling Company Relevant (Jonas Hedberg)

> Oriflame’s Co-Founder Jonas af Jochnick Has Suddenly Passed Away
> Nu Skin Named the World’s #1 At-Home Beauty Device System Brand by Euromonitor
> Tupperware Names CEO Tricia Stitzel Chairman of the Board
> AdvoCare Business Changing
> Founding Family Offers to Buy Out Oriflame
> It’s Official: Natura Buys Avon

Most-Read Article in May on The World of Direct Selling:
AdvoCare Abandons MLM: Uncertainty Returns to Direct Selling (Jeff Babener)

> WFDSA Announces Record-setting 2018 Direct Selling Business Results
> LG to Acquire New Avon North America
> US DSA Announces 2019 Awards Winners and Highest Performing Companies
> Natura’s Avon Acquisition Creates the First Latin American Beauty Powerhouse
> Retail Was Never in Our Plan and It Won’t Happen in Future Also: Frederic Widell, Oriflame VP
> Kirsten Dunst Is Making a Show About a Cult-Like MLM Company
> Amway, the Family Business that Became Global (Google-Translated Text)

Most-Read Article in June on The World of Direct Selling:
2019: The Year Direct Selling As We Know It Changed Forever (Brett Duncan)

> Happi Magazine Announces Top 50 Household and Personal Products Companies
> Canada DSA’s Recipients of the 2019 DSA Awards
> Amway Sues Sellers for Trademark Infringement, Faulty Product Distribution
> As India Hicks Closes Her Luxury Label, Is This the End of Tupperware-Party Shopping?
> USANA: China’s 100-Day Crackdown Has Damaged Consumer Confidence; Sales Drop by 15%
> Mary Kay Champions Business Excellence, Ethics and Social Responsibility, Reaps Rewards in Europe
> Nature’s Sunshine Announces New Global Leadership Structure and Appointments
> Pampered Chef Succeeds in Trademark Infringement Battle

Most-Read Article in July on The World of Direct Selling:
Five Ways the Direct Selling Industry Can Achieve Sustained Growth (Ben Gamse)

> New Amway CEO Shares Digital Vision
> doTERRA CIO Todd Thompson: Social Selling Is Taking off
> Executive Changes at Scentsy
> LG Closes $125M Acquisition of New Avon
> Coty and Younique to Part and Focus on the Development of Their Respective Strengths
> US Direct Selling Association CBD Memo: Ingestible CBD-Infused Products Violate DSA Code of Ethics
> “Tupperware-Style” Retail Makes a Comeback with 27% Growth in UK

Most-Read Article in August on The World of Direct Selling:
Why Are They Leaving Our Company? (Hakki Ozmorali)

> DSA Canada Responds to Globe & Mail Article
> Natura Lands in Asia and Starts Operations in Malaysia
> Tracy Britt Cool to Leave Pampered Chef to Start New Venture
> Rodan + Fields to Launch in Japan
> WorldVentures Expands to Brazil
> Nature’s Sunshine Announces Entry into CBD Market
> MONAT Expands into Europe with Its Launch in Ireland and Poland
> Amazon Challenges Amway, Modicare and Oriflame Ruling in Supreme Court

Most-Read Article in September on The World of Direct Selling:
Natura and Avon: Will This Acquisition Work for Both Sides? (Hakki Ozmorali)

> AdvoCare Will Pay $150 Million To Settle FTC Charges
> FTC v. AdvoCare: Enforcement Action Demonstrates Importance of Compliance Programs
> Uber Is Launching a New App That Matches Freelance Workers with Businesses
> Herbalife Announces CEO Succession Plan
> How Mary Kay China Is Trying to Stay Relevant with Younger Beauty consumers
> Beautycounter Appoints COO and CCO
> Origami Owl CEO Chrissy Weems Explores the Roots of a Successful Business
> USANA Announces Appointment Promotion of Walter Noot to Chief Operating Officer
> Oriflame to Focus on Wellness, Position as Healthy Lifestyle Brand: CEO Magnus Brannstrom

Most-Read Article in October on The World of Direct Selling:
FTC vs. AdvoCare: A Teachable Moment for Direct Selling (Jeff Babener)

> Neora Files Suit Challenging FTC’s Attempt to Change Direct Selling Laws
> Herbalife, Younique, LuLaRoe And Other MLMs Suddenly Under Fire
> LuLaRoe: From Startup to Over $1 Billion in Less Than 4 Years. Lessons and Growing Pains
> Tupperware Appoints Chris O’Leary Interim CEO
> U.S. Charges Two Former Herbalife Executives in China over Bribery Scheme
> UK DSA Announces 2019 Star Award Winners
> Jeunesse Enters Global Essential Oils Market

Most-Read Article in November on The World of Direct Selling:
AdvoCare, Neora, an Ever More Aggressive FTC! What Now? (Alan Luce)

> Kyani Founders Identified as Victims in Plane Crash
> Former New Avon CEO: Company Reneged on $1M Severance
> USANA Announces Retirement of Founder and Chairman, Myron W. Wentz
> Why Market America Is a Legitimate and Thriving Business
> US DSA  2019 Sales and Marketing Conference Reveals New Data on Direct Selling and Independent Work
> The 10 Beauty Brands That Defined the 2010s

Most-Read Article in December on The World of Direct Selling:
5 Keys to Communications Confidence in 2020 (Crayton Webb)

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Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.

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The post A Year in Review: 2019 in the News appeared first on The World of Direct Selling.

As the above graph shows, the global industry has shown a sustained growth over time, with a three-year compound annual growth rate of 1.7% for the 2015-2018 period. The  figures expressed here are in 2018 constant USD and at “estimated retail”.

Markets

As far as the top markets are concerned, China leads the industry by a small margin ahead of the US. China grew by 2% and the US by 1.3% in 2018. These two top markets accounted for 36% of the direct selling volume in the world.

The top 10 markets on the other hand, generated about $153 billion sales and that is roughly 80% of the global sales.

Asia-Pacific countries made up the largest region with 46% share. Americas followed by 32%, Europe by 21%, and Africa-Middle East by 1%.

According to the WFDSA figures, the world’s shining stars in 2018 in terms of volume increases were: Vietnam (30%), Argentina (23%), and Israel (15%).



Product Categories

Products under the wellness category produced 33% of sales, and cosmetics/personal care 31%. The following two largest categories were household goods & durables (13%) and clothing & accessories (12%). It is important to note here that these category statistics do not include figures from China, the largest market, as they were not available.

Wellness category had been especially strong in Asia-Pacific and this was again, the case in 2018. In almost all markets, this category generated more than half of the total direct sales volume. The figure for the US in 2018 was 35.6%.

Direct Sellers

The number of direct sellers in the world increased in 2018 by 1.7% as reported. China grew by 2%, reaching 5.6 million according to WFDSA’s estimates. This number decreased in the US by 0.7% (to 16.5 million). Roughly, 60% of the world’s total direct sellers were in the Asia-Pacific region.

This article has aimed at providing a general insight on how the industry performed last year, globally. For more detailed data, you might want to check WFDSA website.

Note:

The WFDSA states in its report that some country figures represent the whole direct sales market, some others represent only the volumes of the local DSA members, and some are basically WFDSA estimates. Nevertheless, these reports always give us pretty significant indications.

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The post WFDSA’s 2018 Direct Selling Industry Results appeared first on The World of Direct Selling.

The world federation also estimates that there were more than 116 million direct sellers in the world. 65 million of these were in Asia/Pacific, 33 million in Americas, and 15 million in Europe.

Regions  

Out of the five regions the WFDSA divides the world into, Africa & Middle East which is the smallest in volume, came up with the highest growth rate: 9.9%.

Europe followed by 3.5% and Asia/Pacific by 1.8%. The industry in Americas recorded a negative growth in 2017: -1.1%.

The graph on the right shows these regions’ shares in the global volume at the end of 2017. This breakdown has not changed from 2016.

Markets

The world’s top 10 direct sales markets are shown on the graph. The only difference from previous year’s Top 10 list was that in 2017, Taiwan replaced the UK to enter the list.

Of this top 10, six had $10 b+ annual sales volume: US, China, Korea, Germany, Japan and Brazil. These six markets generated roughly 70% of the global sales.

From a growth perspective, it is important to note that the industry in the US reported another -1.8% growth in 2017, after the 1.6% decrease in 2016. The second largest market China grew by 3% in 2017. While the size of the US market was $34.9 billion last year, China’s was $34.3 billion.

According to the WFDSA figures, the world’s shining stars in 2017 in terms of volume increases were: Argentina 37%, Indonesia 20%, Turkey 17%, Norway 16%, Romania 15%, United Arab Emirates 15%, Kazakhstan 14%, Russia 13%, Philippines 12%, and Slovenia 12%.

The two markets that reported the worst performances were Netherlands (-14%) and Belgium (-10%).

Product Categories

Wellness category kept its top place last year. Its share was 34%, almost the same what it was in 2016. 32% was cosmetics and personal care’s share in the global direct sales in 2017.This was more than two points up from 2016.

The total share of the largest two product categories was 66%. In other words, about 2/3 of what is being sold through this channel is either cosmetics, personal care or nutritional products. These two categories were the strongest in “Asia/Pacific” where they accounted for 73% of the sales volume.

The third largest category in the world was household goods and durables with 11% share.

This article has aimed at providing a general insight on how the industry performed last year, globally. For more detailed data, you might want to check WFDSA web site.

Note:
WFDSA states in its report that some country figures represent the whole direct sales market, some others represent only the volumes of local DSA members, and some are basically WFDSA estimates. Nevertheless, these reports always give us pretty significant indications.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.

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The post Global Direct Selling Industry in 2017 appeared first on The World of Direct Selling.

Following this introduction, let’s step back for a moment and see what pyramid schemes are.

According to the World Federation of Direct Selling Associations (WFDSA), “Pyramid schemes are illegal scams in which large numbers of people at the bottom of the pyramid pay money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from payments of others who might join later.”

In her speech at a seminar in 1998, Debra A. Valentine, a former General Counsel at the U.S. FTC, says, “They (pyramid schemes) all share one overriding characteristic: They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.”

In an article dated 2014, FTC’s Aditi Jhaveri advocates if “income is based mainly on the number of people one recruits, and the money those new recruits pay to join the company — not on the sales of products to consumers”, this is a sign that the company is operating a pyramid scheme.

As you see, despite all their efforts to disguise themselves and act as if they are legitimate businesses, pyramid schemes do share some common and if one looks carefully, obvious characteristics.

A few of the significant ones, below:

* The most important, if not the only, source of income for a participant is recruitment of new people.

* Participants’ earnings are based on application fees, unreasonably high-priced starter kits or initial product purchases that are either compulsory or “highly recommended” when joining the scheme.

* There are no competitively priced, good quality products that the participant can sell to other individuals. Plus, there is no product return policy in place.

* Income opportunity is over-exaggerated, efforts are there to convince candidates that everybody will earn huge amounts in a short period of time.

* The “business” is presented as a “once-in-a-lifetime” opportunity.

Basically, these are the common and hard-to-miss signs a candidate will need to look for. If any of these exist, the only prudent action is not to take the risk of joining that “opportunity”.

The risks involved in joining and promoting a pyramid scheme? Losing of substantial amount of money, time and losing of friends, relatives, coupled with facing legal charges that may very well end up with being imprisoned!

I do not expect either these fraudulent schemes to disappear anytime soon or individuals to cease showing interest in them. Having that said, we should use every opportunity to educate the society, including the regulators.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.

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The post What Pyramid Schemes Are and How to Spot Them appeared first on The World of Direct Selling.

Could you tell us about your education?

I graduated from Maua Engineering University in Sao Paulo, Brazil as a mechanical engineer, and later attended several leadership and strategy programs at the Wharton School and IMD in Switzerland.

What was your childhood dream?

My dream was to travel the world and to be in a rock band! Perhaps in a rock band that travelled the world…

What were your past experiences before your current role at JAFRA?

I’ve held senior management positions at several global companies, including Unilever, Pepsico, Revlon and America Online, all while being positioned across several different countries in Latin America. Immediately prior to joining JAFRA, I was President and Chairman of the Board of Sara Lee, Southern Europe, based in Barcelona.

Now based in Westlake, California, I keep a global mindset and currently mentor several entrepreneurs around the world. I also have a seat on the board at Insynch Global and am an ambassador of the Barcelona Global Initiative in Los Angeles, CA.

What do you attribute your career success to most?

I’ve always had a positive attitude that has allowed me to cope with the challenges that come along with any career. I also always think big!

I’ve also really lucked out by having great bosses along the way, each who taught me many invaluable lessons that I’ve taken along with me. Having great teams underneath me has also attributed to the success I’ve had throughout my career.

What has been your most inspiring moment?

I truly wake up feeling inspired every day. However, if I have to give examples of moments of inspiration, I’ll give two: 1) When I was working for Sara Lee in Europe and we came in ahead of Nestle! 2) When I was able to help a best friend who was living through a life crisis.

Your hobbies?

Soccer, travelling, and reading psychology books.

How would you describe being a direct selling executive to an outsider? 

Working in direct selling is just like working in any other industry; you must have a purpose and vision that is compelling to stakeholders and impact society in a positive manner. You must have a strategy to win, the capabilities to do so, and the team and processes to back that all up. However, if there is something critical and very unique – it is to have the passion for people, because this is a people business.

What is your biggest achievement at JAFRA? 

We have built a terrific team here at JAFRA that is consistently delivering growth. We have truly elevated the brand to a different and much higher level, and have leveraged the power of innovation with our JAFRA Royal Jelly line. In addition to the product and growth of the company, we are currently making big and meaningful changes to our digital strategy, which I know will be a huge achievement for the business.

And your biggest challenge at a direct selling company executive role?

We tend to look at the inner working of the brand a lot, to our sales force, to our internal processes – when in reality, we need to look outside. We need to constantly challenge ourselves to evolve our model based on customer trends, and more importantly, to the newest technologies that open infinite possibilities for our industry, especially in the digital space.

What would be your best advice to those who are thinking of joining a direct sales company at a corporate position?

I always tell people that they need to do what they love, to stay true to who they are, and to who they want to be, to believe in themselves, and to pursue their dreams, and above all to make a positive difference. If all that is possible, it does not matter which industry you are in. It’s all about the individual and what they want to become and achieve, as well as how they can impact others and society positively.

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The post Executive Q&A: Mauro Schnaidman, President and CEO of JAFRA appeared first on The World of Direct Selling.

Let’s look into some of the significant numbers and changes behind these overall figures…

Regions

As far as the regional trends are concerned, the above table shows us two significant things:  1) Europe increased its share (from 17% to 20%), while b) “Americas” lost its (from 37% to 33%) in this three-year period.

To add these two observations, we can also say Asia-Pacific, despite all the attention it attracts from the direct sellers grew only in line with the whole world, and nothing much happened in Africa.

Markets

In the year 2014, the top 10 direct selling markets were listed as: USA, China, Japan, Korea, Brazil, Germany, Mexico, France, Malaysia, and the UK. These 10 markets accounted for 78% of the global direct selling volume, and the largest 23 markets for 93%.

One year later in 2015, members of the “Top 10” did not change, but some of the volume shares and rankings did. Germany increased its share by 3 points, China by 2, and the US by 1 point. With this, Germany jumped from its 6^th position in 2014, to the 4^th position in 2015. In 2015, top 10 markets’ total volume represented 79%, up one point from previous year.

The top 10 remained the same in 2016 and all of them kept the position they had had in 2015. The important points in 2016 were: The US lost one point of its share whereas Germany further increased its share by another point. Top 10 countries’ overall share remained as 80% in 2016.

Last year’s volume growth champion was reported as Venezuela by the WFDSA. Venezuela’s year-over-year growth in constant 2016 $ was 87%!  It was followed by Argentina (41%),  Kazakhstan (19%), South Africa (18%), and Netherlands (16%). Those that posted the highest negative growth figures were: New Zealand (-19%), Greece (-8%) and Japan and Croatia (both, -6%)

Product Categories

Wellness category has increased its share considerably in the last three years. This has led to a change in the leadership. While cosmetic products made up the leading category in 2014, wellness moved to #1 position in 2015 and remained there in 2016.

Although its absolute size is still small, “foodstuffs and beverages” category’s performance absolutely deserves special attention. Going from 1.3% to 2.1% in three years means more than 60% increase.

Last but not least, clothing and accessories’ jump in 2016 should also be noted.

Direct selling industry’s leading product category wellness was the strongest in Asia/Pacific in 2016. Its share was 42%, way above the global average. Cosmetics category’s leading region on the other hand, was Americas (34%).

This article has aimed at providing a general insight on how the industry has evolved in the last three years, globally. For more detailed data, you might want to check WFDSA’s web site.

(*) WFDSA states some of the country figures represent the whole direct sales market, some others represent only the volumes of country DSA’s members, and some are WFDSA estimates.  Nevertheless, these reports give us pretty significant indications.

…..

Hakki Ozmorali is the Principal of WDS Consultancy, a consulting firm specialized in providing services to direct selling firms. He is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication. He is an experienced professional with a strong background in direct sales. Hakki was the first corporate professional in the Turkish network marketing industry. His work experiences in direct selling include Country and Regional Manager roles at various multinationals in Turkey and in Canada. You can contact Hakki here.

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The XV World Congress, co-hosted by the World Federation of Direct Selling Associations and the French DSA will take place in Paris, on 1st to 3rd of October 2017.

France, the 2nd largest direct selling market in Europe, is proud to host the 2017 Congress which will be THE place to be for anyone interested or involved in direct selling. Digital and technical revolutions, new managerial trends, and most recent legal developments impacting our business model will be amongst the many topics debated in this prestigious event having “Own the Future” as theme.

High profile speakers, leaders of our industry, media representatives and academia will be presents in this unforgettable event. Emma Crosby, the well-known BBC journalist, will moderate the plenary sessions, and two keynote speakers will share with us their vision of a fast-moving world in constant transformation. Pascal Lamy, former Director of the World Trade Organization (WTO) will enlighten us on the main political and economic challenges we will face in the coming years. On a totally different topic but equally interesting, Bertrand Piccard, the famous Swiss aeronaut who flew around the world with “Solar Impulse”, the first plane only powered by solar energy, will tell us why protecting our natural environment is so crucial for the future.

Besides a CEO Panel discussion between four key leaders of the direct selling industry, the programme of the Congress features a range of interactive workshops which will address a broad variety of subjects that are crucial for the evolution of our businesses:

Generation Y, or Millennials, as they are also called, grew up with new technologies and bring a whole new vision of the workplace. Direct selling companies follow this trend closely as a growing number of young people are interested by the direct selling work.

The collaborative economy is a fast growing business trend. Its concept based on a “doing more with less” approach is in line with the current economic climate. How does direct selling relate to the collaborative economy? The success of this new peer-to-peer entrepreneurial business trend will push retailers and consumers to reinvent the way of doing business.

The evolution of Consumerism and Distribution. Today’s consumers are more, and often better, informed than the seller due to their habits of researching products and services online before making purchase decisions. How can we adapt our companies’ strategies and our business model to the new purchasing habits initiated by this digital revolution? Will customer loyalty be affected by this evolution, and if so, how?

Social Media & Direct Selling. What is the future of social networks in our industry? What is the contribution of new technologies to sales methods and how can these tools best be used?

The company of the Future. Expert predicts robots will take over 30% of our jobs by 2025 and many blue collar jobs will disappear. Flexibility, balanced and healthier life styles, new schedules at work, all these new trends emerge, supported by new technologies. Our companies must adjust their operations to these new trends. How can they meet this challenge?

Wellness products: Tomorrow’s health & connected tools. In the near future, scientists will be able to analyse everyone’s health with the help of connected tools such as the “health watch”. Will these new connected health tools make significant advances in the future and will they boost direct sales of wellness products that occupy an increasing share in the direct selling sector?

Last but not least, this Congress will be a unique opportunity to meet and network with all the key players of our industry, and to socialize during three exceptional evening events, which include a dinner cruise on the Seine river and an unforgettable gala dinner in the Château de Versailles.

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The post WFDSA World Congress in Paris: THE Place to Be! appeared first on The World of Direct Selling.

As we come to the end of another year, I wanted to ask some of the prominent persons of the direct selling community what they see coming in 2017.

“What will be the most important issue, whether it be an opportunity or a threat, in the direct selling industry that will need a closer focus Next Year?” was the question.

You will read in this week’s article, their responses:

Oscar Cano Arias, Managing Director of Direct Selling Europe (DSE):

“Yet again, ethics will be a top issue in the year 2017. Due to the lack of serious and effective self-regulations in the US, the FTC is determined to react. In 2015, the FTC closes down Vemma accused of operating a pyramid scheme. Then, in July 2016,  it adopts a Resolution against Herbalife that could have not been tougher: “Herbalife is going to start operating legitimately, making only truthful claims”… “Herbalife will have to restructure its business so that participants are rewarded for what they sell”… “Herbalife will have to compensate consumers […] as a result of unfair and deceptive practices”. 2017 will see new FTC Guidelines for the US direct selling industry, likely to include main points of the Resolution against Herbalife. Direct Selling Europe (DSE) welcomes the FTC move and invites the FTC to publish its new Guidelines the earliest possible. In the meanwhile, DSE continues working with all stakeholders to make sure that the interests and image of the well reputed and sustainable companies are well preserved.”

Jeff Babener, Legal Counsel at Babener and Associates:

“The thrust of the message of the October 2016 presentation of the FTC Chairwoman, Edith Ramirez was “more FTC regulation is coming… live with it”. On notice going forward: The FTC would reject a legal standard accepted by courts for 40 years, The Amway Safeguards Rule, and proposes guidance to “upend and reject” decades of industry practices that recognize full credit for personal use by distributors, track qualification volume based on wholesale movement of product, allow for monthly sales volume activity qualification based on distributor purchase volume and encourage and reward autoship programs that deliver predictable volumes to distributors. A surprise: The 2016 Presidential election results may usher in an anti-regulatory climate. Sponsor of a bi-partisan anti-pyramid bill to codify recognition of personal use purchases and establish legitimacy standards acceptable to the direct selling industry, is Rep. Marcia Blackburn, member of the Trump transition team and potential Cabinet member. To its surprise, this may be the year of opportunity for the industry to seek refuge from over-regulation, with model legislation that has already been adopted as law in more than a dozen states.”

Jacques Cosnefroy, General Secretary of the France Direct Selling Association (FVD):

“In a world in constant transformation, where the cultural revolutions are exempted from principles of belongings of the majorities, where the faith in the other one has become a variable of adaptation, where the inherent values of our personal construction are no longer considered as sources of reference, where the fear of the next day is a component of the everyday life, where the transparency is not anymore an option, the direct selling industry creates for each and every one a solid bedrock for the future, which could be threatened by a lack of control of our communication. Communication has become an asset and a threat for our companies! An asset because it offers this incomparable universal dimension which connects the people, and a threat because if uncontrolled  it can convey unethical information that could severely damaged the image of the direct selling industry.”

Tamuna Gabilaia, Executive Director and Chief Operating Officer of The World Federation of Direct Selling Associations (WFDSA):

“2016 was a very exciting year for the industry. We saw sustained growth in all regions – global retail sales increased by 7.2% and the industry experienced 7.2% CAGR. We can see that people all over the world are increasingly interested in getting into business for themselves and we anticipate we will continue our growth pattern and will remain a vibrant industry bringing economic empowerment to people all around the globe. However, we still need to tell our story better. We need to align around messaging and a common narrative. There are widespread misperceptions and misunderstandings about direct selling. Explaining who we are and how our businesses work is an area we need to focus on. The WFDSA Messaging Guidebook developed under the WFDSA Advocacy Committee is a tool that will increase public understanding of direct selling and foster greater communication among member companies. Lastly, WFDSA World Congress XV “Rendezvous with the Future” which will be held in October 2017 will be an unforgettable event which will clearly demonstrate the key role our sector plays in the global economy.”

Brent Kugler, Partner at Scheef & Stone, LLP:

“The winds of change continue to grow stronger in the direct sales industry. Companies must be proactive in addressing changes that can now be seen as inevitable, if not mandatory, in light of recent FTC activity and comments from FTC Chairwoman Ramirez following FTC- Herbalife. The “wait and see what others do” approach is no longer a viable option in today’s regulatory climate. Companies must retool their compensation plans and reinvest in technology to track verifiable retail sales to non-distributor customers and calculate commissions and rank advancement based on those sales. Companies should also be wary of promoting “optional” high-priced enrollment bundles, as recent enforcement actions make clear that regulatory authorities are increasingly focused on the percentage of distributors who are unable to earn enough compensation to offset the cost of enrolling with a company.”

Alan Luce, Senior Managing Partner at Strategic Choice Partners:

“Rising to the challenge to provide world class access and service levels to end user customers and salesforce members will be the defining characteristic of successful direct selling companies in the future. Those companies that meet or exceed world class status in access and service will succeed. Those who do not raise their game will wither and fail as both customers and sales people choose to go elsewhere regardless of how good or unique their products and services may be.”

Nick Mallett, Director at Pan European Solutions:

“The Internet has reached the stage where established social media platforms are now less essential to new entrants to networking businesses. There will be increasing instances of ‘private’ networking portals, worldwide. These represent a competitive threat to established network marketing businesses. We see a serious risk from the spread of such platforms in the regulatory sense of their being somehow above the law, through operating in the ‘virtual world’. The viral spread of such businesses is such that they are subject to the laws of the many jurisdictions in which they operate. On the one hand, they may be able to carry on business in multiple jurisdictions despite being closed down in one or more where their operation contravenes local legislation; on the other, a regulatory challenge in one jurisdiction might just cause them to close down altogether. In the meantime, they may have given network marketing such a bad name – perhaps worldwide – that the various regulators introduce a more restrictive regime of control such as to restrict the previously legitimate activities of our established network business clients.  We must be vigilant on behalf of the legitimate industry.”

Katarina Molin, Executive Director of The European Direct Selling Association (Seldia):

“In 2017, we expect the positive growth for direct selling in the European region to continue, which shows that it continues to be a vibrant retail sector and enjoys high consumer trust. From a policy perspective, Seldia will continue its close dialogue with European policymakers on the EU consumer policy. It will be crucial to focus on the proper implementation and enforcement of existing EU legislation, an area that needs more attention in the future. Addressing issues such as non-tariff barriers as well as how to effectively put a stop to the practices of rogue traders must be prioritized. It is also time to step up our efforts to communicate better and more transparently on how the sector works, on what the channel is – and is not. We must also explain that it is not outdated channel of distribution, but on the contrary – very receptive to innovations and technological development. In terms of communication, it will be important to engage in a constructive discussion about segmentation of the people involved in direct selling, to keep a continued focus on ethics, and to collect independently verified data to share externally.”

Gillian Stapleton, Executive Director of the Australia Direct Selling Association (DSA):

“The Entrepreneurial Consumer is both an opportunity and threat. Great service has long defined direct-selling: establishing great rapport in-home, the personal delivery of products and follow up every season. Will that define the industry in the next 5 years? Direct-selling faces the biggest challenge in service it has ever experienced. Next day delivery, packaged in tissue paper, a hand -written note signed by the packer, establishes a good relationship for me with that company. An offer to exchange the goods or have three alternatives shipped at no cost to me and send back what I don’t want. That cements it. I am the Entrepreneurial Consumer and I could be your consultant. Will your company attract me?”

Bobbie Wasserman, Managing Director of Wave2 Alliances:  

“The FTC is now distinguishing between Distributors, personal consumption and customer purchases. Direct selling companies can harness this opportunity to engage and attract more customers – helping build each company’s credibility for its own brand and contribute to enhancing the industry’s credibility. Public relation campaigns focusing on executives’ leadership, premium products/services and entrepreneurial successes can provide a corporate narrative and business tools for Distributors. In the future, the industry can argue the semantics of purchase behavior via legal battles. However, now is the time to impact decisions being made in the ‘court of public opinion’ – those decisions are often made swiftly and without access to an appeal.”

The post In 100 Words: Looking Ahead to 2017 appeared first on The World of Direct Selling.

Both reports contain interesting statistics, especially from a comparative point of view. Let’s take a look at these numbers.

Regions and Countries

WFDSA reports the sales volume generated in 2015 by its member countries as $184 billion and the number of individual direct sellers as 103 million. The number of direct sellers do not include those who are in China as this country’s figure was not reported. The sales volume in 2015 represents a 7.7% growth from the previous year in constant Dollars.

As the chart to the right shows, Asia-Pacific remains to be the world’s largest direct selling region with a 46% share. Among the regions, Europe has been the fastest-growing in the last four years, followed by Asia-Pacific. Europe has grown from 16% in 2011 to 19% in 2015 and Asia-Pacific from 44% to 46%. Losing its share to these two regions, Americas has gone down from 39% to 34% in four years.

When we turn to countries, the US still keeps its #1 position with an annual sales volume of $36.1 billion. China is a close second with $35.5 billion. The US market’s growth rate in 2015 was 4.8% and China’s was 19%. So, it is very likely that China will be announced as the world’s largest direct selling market by this time next year.

The top ten markets are ranked, together with their shares in the global volume, as follows: US (20%), China (19%), South Korea (9%), Germany (8%), Japan (8%), Brazil (5%), Mexico (4%), France (2%), Malaysia (2%), and UK (2%). In 2011, while the US was at 20%, China’s share was 11%.

Product Categories

In 2015, wellness category was the largest one globally with 34% share. Cosmetics category produced 32% of the volume. Household goods and durables accounted for 11%, and clothing and accessories for 7%.

Region-wise wellness was the strongest in Asia-Pacific (41%). In fact, its share was 89% in Philippines, 64% in Hong Kong, and 63% in Taiwan. This category was the weakest in Americas (29%).

Companies

Amway kept its leadership position among direct selling companies in 2015. Amway’s 2015 global sales was $9.5 billion, representing a 12% decline as compared to the previous year.

As of end-2015, Amway was followed by Avon ($6.2 billion), Herbalife ($4.5 billion), Vorwerk ($4 billion), Infinitus ($3.9 billion), Mary Kay ($3.7 billion), Perfect ($3.6 billion), Natura ($2.4 billion), Tupperware ($2.3 billion), and Nu Skin ($2.3 billion). Avon’s figure here does not include Avon North America’s (a.k.a. “New Avon”) figure as this unit was sold to form an entity outside Avon. New Avon’s 2015 revenue was $1 billion.

Among the top 100, those that increased its sales the most in 2015 were: Le-Vel (254%), Jeunesse (160%), NHT Global (112%), Kasly Ju (99%), and World Ventures (97%).

Regions’ top 5 companies in sales volume in 2015 were as below:

North America: Amway (US), Avon (US), Herbalife (US), Mary Kay (US), Tupperware (US)

South America: Natura (Brazil), Belcorp (Peru), Yanbal (Peru), Fuxion Biotech (Peru)

Europe: Vorwerk (Germany), Oriflame (Switzerland), Telecom Plus (UK), Forbes Lux (Switzerland), PM International (Germany)

Asia / Pacific: Infinitus (China), Perfect (China), Tiens (China), New Era (China), DXN (Malaysia)

Note: Public companies report their financials quarterly so their numbers can be accessed to easily. Direct Selling News magazine that compiles the “Global 100 List” every year relies on private companies’ self-reported figures. And these make up nearly four-fifths of the top 100. To ensure reliability, Direct Selling News says it requires the net revenue number to be validated by the CEO and certified by a qualified agent. Consequently, those private companies that chose not to disclose their revenue figures did not appear on this list. And Direct Selling News believes there are a number of companies like doTERRA, Nikken, Shaklee and Stella & Dot  that could have been on the list.

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