Vorwerk Archives - The World of Direct Selling https://worldofdirectselling.com/tag/vorwerk/ The World of Direct Selling provides expert articles and news updates on the global direct sales industry. Thu, 06 Dec 2018 18:27:20 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://i0.wp.com/worldofdirectselling.com/wp-content/uploads/2016/04/cropped-people2.png?fit=32%2C32&ssl=1 Vorwerk Archives - The World of Direct Selling https://worldofdirectselling.com/tag/vorwerk/ 32 32 A Page in the History of Direct Sales: Opening Up the Gates of Eastern Europe https://worldofdirectselling.com/history-of-direct-sales-oriflame/ https://worldofdirectselling.com/history-of-direct-sales-oriflame/#respond Mon, 17 Dec 2018 01:00:56 +0000 https://worldofdirectselling.com/?p=14290 It all started in 1967 when two brothers teamed up with a friend to set up an “Avon-like” company in Stockholm, Sweden. Oriflame would sell Swedish natural cosmetics. The brand’s promise was the natural beauty that the world had been associating with Sweden. The founders also insisted on not testing their products on animals, a concept that […]

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It all started in 1967 when two brothers teamed up with a friend to set up an “Avon-like” company in Stockholm, Sweden. Oriflame would sell Swedish natural cosmetics. The brand’s promise was the natural beauty that the world had been associating with Sweden. The founders also insisted on not testing their products on animals, a concept that was far from being a public concern at the time.

Company’s name originated from a royal banner of medieval France that was openedOriflame First Logo only on the battlefield. The original word is “Oriflamme” and means “golden flame”. The first company logo is shown on the right.

The business did grow in time, expanding into some of the Western European countries. Oriflame even went public on the London Stock Exchange. However, until late 1980s, Oriflame registers no major international success.



af JochnickAs the 1980s were ending, the brothers Jonas and Robert af Jochnick saw a huge opportunity in the democratization of the Eastern Bloc in Europe: Poorly served markets, coupled with a large number of talented and well-educated masses who would be willing to seek entrepreneurial opportunities that had not existed before.

Thus, Oriflame establishes a “daughter company” by the name of Oriflame Eastern Europe S.A. (or short, ORESA) based in Brussels. The older brother Jonas af Jochnick leads this operation as a very different entity from the parent company in many ways. The whole strategy was based on a very aggressive international expansion. The aim was to open as many ex-Eastern Bloc countries as possible and establish solid presences there before the major competitors do, especially Avon and Amway. To do this, it had to be practical in many aspects and also to be aggressive on the field. Amway’s compensation plan served both purposes and it was implemented almost unchanged in this operation.

Between 1990 and 1996, many new markets were opened through ORESA, like the Czech Republic, Poland, Hungary, Russia, Latvia, Ukraine, Slovakia, Bulgaria, Lithuania, and Romania. With the momentum gained, Turkey, Greece and India were opened, too.

This major shift in its strategy brought a huge success to Oriflame. So, in 1999 Industry Kapital (now called, IK Investment Partners), a leading European private equity company bought 45% of Oriflame’s shares, delisting the company from the London Stock Exchange.

In line with the initial plans, company shares were re-listed on the Stockholm Stock Exchange in March 2004. With this, Industri Kapital was realizing its investment in Oriflame through a SEK11.3 billion (approx. US$ 1.5 billion) initial public offering (IPO). The offering was reported to be more than ten times over subscribed and had provided Industri Kapital with a six times multiple on its original investment. Industri Kapital then, continued selling its shares on the stock exchange and exited fully by selling its remaining 4.5% stake in August 2006.

Having celebrated its 50th anniversary in 2017, Oriflame is one of today’s majorOriflame logo international direct selling companies. It operates in 60 markets all over the world, has six production facilities in four countries, employs over 6,000 people and has a yearly revenue of €1.4 billion (2017). With this revenue, Oriflame is the second largest European direct seller after Vorwerk.



If this idea of expanding into Eastern Europe at an unprecedented pace had not been implemented, could Oriflame be as successful today? Having been a part of Oriflame’s management team at the time, I can confidently answer this: “Hardly!”

More Pages in the History of Direct Sales:
FTC vs Amway (1975-1979)
The Death of Mark Hughes

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Hakki OzmoraliHakki 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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Executive Q&A: Mauro Schnaidman, President and CEO of JAFRA https://worldofdirectselling.com/exec-qa-mauro-schnaidman-jafra/ https://worldofdirectselling.com/exec-qa-mauro-schnaidman-jafra/#comments Mon, 23 Oct 2017 01:00:09 +0000 https://worldofdirectselling.com/?p=11536 We are having Mauro Schnaidman of JAFRA this week. After working for Sara Lee at various senior roles for 10 years, Mauro joined JAFRA in 2013. Since then, he has been leading the company as its President and CEO, based in California, USA, reporting directly to Vorwerk’s Executive Board. Mauro is a member of the WFDSA’s […]

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Mauro SchnaidmanWe are having Mauro Schnaidman of JAFRA this week. After working for Sara Lee at various senior roles for 10 years, Mauro joined JAFRA in 2013. Since then, he has been leading the company as its President and CEO, based in California, USA, reporting directly to Vorwerk’s Executive Board. Mauro is a member of the WFDSA’s (World Federation Direct Selling Associations) CEO Council.

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? Mauro Schnaidman

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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Vorwerk: Europe’s Direct Selling Power https://worldofdirectselling.com/direct-selling-power-vorwerk/ https://worldofdirectselling.com/direct-selling-power-vorwerk/#respond Mon, 10 Jul 2017 01:00:51 +0000 https://worldofdirectselling.com/?p=10878 Some say direct sales is not a business that can be sustained for many years, and some others claim it is not the 21st century’s selling model. One of the best answers to these is Vorwerk, the Germany-born direct selling conglomerate that turned 133 last year that is still growing! Ownership and Management Vorwerk (pronounced […]

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VorwerkSome say direct sales is not a business that can be sustained for many years, and some others claim it is not the 21st century’s selling model.

One of the best answers to these is Vorwerk, the Germany-born direct selling conglomerate that turned 133 last year that is still growing!

Ownership and Management

Vorwerk (pronounced “for-verk”) was founded in 1883 in Wuppertal, Germany by two brothers Carl - Adolf VorwerkCarl and Adolf Vorwerk. The company produced carpets. The initial idea was Carl’s and his invention of the woven oriental rug was found innovative at the time. At first, both brothers owned the new company, but soon Adolf Vorwerk left the carpet production to his older brother.

In 1907, August Mittelsten Scheid, Carl Vorwerk’s son-in-law, became company’s sole managing partner.

Today, a total of 19 members of the Mittelsten Scheid family are connected to Vorwerk as shareholders. And the group is being led by three Managing Partners, Reiner Strecker, Rainer Genes and Frank van Oers. Above this Executive Board, Vorwerk has a Supervisory Board consisting of members of the Mittelsten Scheid family and also several external experts.

Managing Partners

In time, Vorwerk has grown into a highly diversified, global corporate group. Vorwerk nevertheless remains a family enterprise today.

As of end-2016, Vorwerk has subsidiaries in 22 countries, and trading partners or distributors in 56 others. 63% of the group sales is generated outside Germany.

“The Vorwerk Group” today consists of seven main divisions, each being run by its own management board:

Thermomix

ThermomixThe evolution of Thermomix starts with the with the introduction of the VKM5 universal food-processor in 1961. Then in 1970s Vorwerk further developed it to become Thermomix, a versatile kitchen appliance that can both mix and cook food.

Thermomix is ​​increasingly becoming the driver of Vorwerk group’s direct sales. In 2014, it overtook the Kobold vacuum cleaner for the first time in sales in 2014. Now Thermomix accounts for 42% of the group’s global business, generating about EUR 1.3 billion annually. Vorwerk’s Thermomix business grew by 11% last year.

Germany (EUR 385 m), France (EUR 284 m) and Italy (EUR 229 m) are the three largest Thermomix markets.

Kobold

The company developed its first vacuum cleaner in 1929. It was revolutionary at the time, being far Koboldless bulky than the other vacuums in the market.

Kobold is Vorwerk group’s second largest division that sold EUR 836 million worth of products in 2016, 4% less than in 2015.

Italy is the largest market for Kobold, generating more than half of the global sales volume (EUR 436 million in 2016). Germany followed it with EUR 251 million.

JAFRA

JafraJAFRA was founded in 1956 in the US by a husband-and-wife team Jan and Frank Day as a cosmetics direct sales company. JAFRA was acquired by Vorwerk in 2004.

2016 was not very good year for JAFRA division, too. Global sales decreased by 7% to EUR 369 million in 2016.

JAFRA operates in a total of 18 markets, Mexico being by far the largest. 2016 sales in Mexico was EUR 259 million, accounting for more than 70% of JAFRA’s total revenue. USA is JAFRA’s second biggest market that contributed EUR 59 million in 2016.

Lux Asia Pacific

The Lux Asia Pacific group joined Vorwerk in 2001. Its product portfolio includes vacuum cleaners and water purifiers sold in Southeast Asia.

The division’s sales in 2016 was EUR 24 million, slightly lower than previous year’s sales. Lux Asia Pacific has been posting decreasing revenue figures in the last three years.

Thailand is this division’s #1 country with EUR 11 million sales in 2016. Lux Asia Pacific has four subsidiaries and seven distributors.

Vorwerk Engineering

Engineering division consists of three sites located in Germany, France and China. It conceptualizes and manufactures products for the direct selling divisions in a way, making its growth dependent on the successes of those divisions.

akf Group

This is Vorwerk’s arm in the financial sector. Vorwerk founded akf bank in 1968.  akf Bank and its subsidiaries provide leasing and financing to small and mid-size companies.

This division posted 12% growth in 2016 achieving EUR 431 million revenue in terms of interest, leasing income as well payments received againt services provided.

Vorwerk Flooring

This is the oldest disivison of Vorwerk that existed from the beginning. Today, the name “Vorwerk flooring” stands for carpets and also elastic floor coverings.

Flooring division’s sales was down 9%, at EUR 70 million in 2016.

Vorwerk Direct Selling Ventures

This is actually an affiliate, an independent entity within the Vorwerk Group. It invests growth capital of between € 1 and 10 million in the form of minority interests in young startups with an existing market presence. Currently, it has 14 companies in its portfolio.

Sales Channels of Vorwerk

While Vorwerk has been a synonym for direct selling, actually it is increasingly becoming an omni-channel seller. Alongside its e-commerce sites, Vorwerk has 52 shops in Germany, three in Austria and one in France. The targeted number of shops by 2019 is 75.

Relations with the Industry Associations

Vorwerk and JAFRA are members of the Direct Selling Association in the US.

Direct Selling EuropeIn Europe, however, as we all know there are two umbrella organizations: Seldia and Direct Selling Europe. They are both based in Brussels, Belgium. Seldia has 28 national association members, and Direct Selling Europe has 5 national members.

The Vorwerk Group joins here Direct Selling Europe along with AMC, Avon, and Tupperware, and parts itself from the majority of the direct sellers in Europe.

Vorwerk Today

With its EUR 3.1 billion revenue (about $3.5 billion), Vorwerk shares with Mary Kay the second place among the largest private direct selling enterprises in the world, after Amway. It is also Europe’s leading direct seller, far ahead of others in terms of sales volume. So far, it has had a solid growth in years:

Vorwerk Sales

Vorwerk has a direct sales organization of 640,000 people on the field, of whom 60,000 sell household appliances. Remaining 580,000 make up JAFRA’s field organization.

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Hakki OzmoraliHakki 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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A Look Back at 2016 in the News https://worldofdirectselling.com/look-back-at-2016-in-the-news/ https://worldofdirectselling.com/look-back-at-2016-in-the-news/#respond Mon, 02 Jan 2017 03:00:45 +0000 https://worldofdirectselling.com/?p=9885 This week we feature highlights from the direct sales industry news as they appeared on our newsletter throughout last year. Once again, it was most certainly an interesting year with all the positive and the negative news. This is a compilation of pieces from last year that I personally have found more memorable or inspiring […]

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This week we feature highlights from the direct sales industry news as they appeared on our newsletter throughout last year. Once again, it was most certainly an interesting year with all the positive and the negative news.

This is a compilation of pieces from last year that I personally have found more memorable or inspiring than the others. I have also added to this, a few articles from The World of Direct Selling website that attracted much interest.

January

How and Why Amway’s DeVos Family Gives Away Billions
* Morinda Celebrates 20th Year in Business and Second Era of Growth
Layoffs, Lawsuits at Once-Hot Direct-Sales Firm ViSalus
Ava Anderson Non-Toxic to Reopen as New Company Without Founder or Her Family
Melaleuca Marks Three Decades in Business

February

Amway’s 2015 Revenues Fall to Lowest Level in 5 Years
Direct Selling Dominates the Aromatherapy and Essential Oils Market
Stream Announces New President and CEO
Avon Reports 20% Sales Decline in 2015 Q4
70 Years of Tupperware
Mannatech Enters South America with Launch of Colombia Operations
Nu Skin Settles Class Action Suit, Pays $47 Million
Herbalife in Talks with FTC to Resolve Probe

March

Avon and Cerberus Capital Announce Close of Strategic Partnership Transaction
Young Living Appoints New Chief Operating Officer
Isagenix Launches New World Headquarters
Medifast Management Changes Run Deeper Than CEO Sheetz
Oriflame Says Could Expand to U.S and Brazil
Travis Ogden Appointed Isagenix President & COO
Amway Maps Growth Strategy in India
Ackman Doesn’t See ‘Slap on the Wrist’ for Herbalife
Social Selling Moves Online

April

Mannatech Reveals New Company Brand
Herbalife Attacks New Documentary, Saying It Takes Ackman’s Side
Mary Kay Empowered Women Using a Bit of a Pyramid Scheme
Avon’s North America Unit Has a New Boss
If You Think She Looks Like An Avon Lady, You’re Half Right
Natura Opens First Own Shop in Sao Paulo

May

Pyramid Schemes in 10 Questions
Avon Loss Widens on Dollar and Restructuring Costs
Stella & Dot CEO on Creating “Flexible” Business for Women
Successes of South Africa DSA and the University of Johannesburg
Vorwerk Group Reports 23.9% Sales Increase in 2015
Amway’s Chief Sales Officer John Parker Talks About the ‘Gig Economy’
Herbalife Buys Its Headquarters for Close to $30 Million
How Tonia Janshan Built Steeped Tea Into a Huge Retail Empire
Silpada Exec: Insurmountable Revenue Declines Doomed Company
Interview with Sue Liddie, CIO of Avon
‘Damsel in Defense’ Gives Women Tools to Protect Themselves

June

Rodan + Fields: How Two Dermatologists Built a Billion Dollar Brand in Their Spare Time
Direct Selling’s Economic Footprint Continues to Expand in United States
Clear Definition on Pyramid Schemes Will Prevent Fraud, Protect Consumers
Nu Skin Receives $210 Million Investment From China
The Evolution of Direct Sales
Avon Will Go Ahead With Move to the U.K. Despite Brexit Vote
Unemployment India’s Biggest Concern, Direct Selling at Rescue
HAPPY Parties Are the New Tupperware Parties, but for Cannabis
Consumer Groups, Direct Selling Industry Debate ‘Anti-Pyramid’ Legislation
The Brutal Truth About Those Pyramid Schemes

July

Brownie Wise: The Life of the (Tupperware) Party
Global Direct Selling Industry in 2015
Longaberger Empties Famous Basket Building
Medifast Named to Forbes 100 Most Trustworthy Companies in America List
Herbalife Settles Pyramid Scheme Case with Regulator; in Blow to Pershing’s Ackman
Mary Kay Breaks Ground Soon on New R&D Site
Customer Acquisition With Stella & Dot CEO Jessica Herrin
Beauty Takes a Beating at Tupperware
Direct Selling Gigs: How Much Can You Make Being Your Own Boss?
FTC v. Herbalife Settlement: First Take

August

How Selling Cutco Knives as a Teen Inspired This Entrepreneur’s Direct Selling Empire
Giants’ Growth Performances at Mid-Year
Cloud-Centric Management Lifts Rodan + Fields Towards $1B Revenue
FTC v. Herbalife: Post-Settlement Legal Guidance for the Direct Selling Industry
Amway China: Rebirth of a Sales Firm
Troubles Mount for Longaberger, Its Parent Company
The Avon Lady Goes Digital: The Original Network Gets a 21st Century Facelift

September

One of the Fastest-Growing Clothing Companies Making Some Millennial Moms Rich
Martin Kohler Named New President of PartyLite Worldwide
Follow the Profit: How Mormon Culture Made Utah a Hotbed for Multi-Level Marketers
Think the Direct Sales Model Is Dead? Think Again
LR Health & Beauty CEO Dr. Thomas Stoffmehl Seldia’s New Chairman
Inside Wall Street’s Greatest Feud: Icahn vs. Ackman
Nerium Names Deborah K. Heisz President and COO
Nu Skin Settles SEC Probe into Charitable Contribution in China
Understanding Pyramid Schemes, Ponzi Schemes, and Network Marketing
Tupperware Appoints Tricia Steitzel President and COO
Amway President: ‘Why Co-Leadership Actually Works’
How ‘America’s Next Top Model’ Made Tyra Banks a Better Businesswoman
Origami Owl Acquires New York-Based Beauty Company willa

October

Medifast Announces Appointment of Direct Selling Industry Veteran as CEO
Oriflame: Back on Track Again?
Jamberry Nails Names Elizabeth Thibaudeau Chief Executive Officer
Avon Begins Expansion into Heath & Wellness with New Hire
30,000 Attend to doTERRA’s Convention: The Highest in Utah’s History
Real Beauty, Mary Kay Style: Mary Kay’s New Ad Campaign
Silpada Designs Acquired by Berkshire Hathaway Entity
Natura Cosmeticos Picks New CEO to Replace Lima
Belcorp Among Fortune’s 25 Best Global Companies to Work For
Stream Announces Chairman Transition
The Wave is Upon Us: Big Changes for Direct Selling

November

Getting to Know About Natura
Why Herbalife CEO’s Departure Is a Body Blow to the Company
Arbonne Expands into Asia with Opening of Taiwan
Mannatech Prepares for China Entry with New E-Commerce Strategy
Trump Picks Betsy DeVos, Daughter-in-Law of Amway Co-Founder, for Education Secretary
USANA Announces CEO Transition Plan and Appoints Kevin Guest CEO
It’s Time for Network Marketing to Ditch the Mercedes-Benz
The Rise of the Entrepreneur

December

Oriflame to Bet Big on Skincare, Wellness in New Strategic Push
Could ‘Facebook Live’ Change the Game?
Nu Skin Announces Senior Management Transition Plan: Truman Hunt Leaves After 14 Years
Avon Headquarters Leaves the US
Vemma Settles Ongoing Litigation with FTC over Pyramid Charges
Fact-Checking the FTC’s New Legal Guidance
Carl Icahn To Be Trump’s Advisor on Regulatory Overhaul
ViSalus Announces CEO Transition
First of Many: Natura Opens First US Store in New York
How Rick Goings Went from Dirt Poor to the CEO of a $2 Billion Company





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Direct Selling in Italy: La Vita è Bella! https://worldofdirectselling.com/direct-selling-italy/ https://worldofdirectselling.com/direct-selling-italy/#respond Mon, 24 Oct 2016 03:00:17 +0000 https://worldofdirectselling.com/?p=9521 This week Luca Pozzoli takes us to the Italian direct selling industry. Luca is a direct sales executive. He has been in leadership positions in the industry for over 20 years as Managing Director and Area Vice President in party plan companies like Tupperware and PartyLite. He was the President of Avedisco (Association of Direct […]

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Luca PozzoliThis week Luca Pozzoli takes us to the Italian direct selling industry. Luca is a direct sales executive. He has been in leadership positions in the industry for over 20 years as Managing Director and Area Vice President in party plan companies like Tupperware and PartyLite. He was the President of Avedisco (Association of Direct Selling Companies Italy) between 2007-2010 and subsequently, Univendita (Union of  Italian Direct Selling Companies) from 2010 to 2013.

Guest Post by Luca Pozzoli
Direct Selling in Italy: La Vita è Bella! (*)

The General Picture

Italy is one of the top direct selling markets in the world, both by sheer size and growth figures. As reported by the World Federation of Direct Selling Associations, in 2015 total retail sales accounted for $2.9 billion, recorded +9% growth vs. 2014 and compound growth rates of 3-4% for the last decade.

UnivenditaToday, there are 514,500 direct sellers in Italy, and two associations represent the industry: Univendita, with 17 members having sales of €1.6 billion, and Avedisco, with 37 members having sales of €0.6  billion. There is a clear and stable (for once in Italy!) regulatory environment. With the 2005 law Avediscoregulating direct selling with a special contract for sellers, income taxes are levied at source. Not only that! There is an income threshold clearly stating the difference between occasional and professional sellers and there are severe provisions against pyramid schemes.

The economic scenario is also very favourable to direct selling with a high percentage of women not working (actually the lowest level of women participation in the labour market in EU, 47% vs. EU average of 60%), low salaries and a real need to supplement the income. A general positive view of direct selling is present as a tradition deeply rooted in history and lastly, we see a relatively low penetration of online sales (but rapidly growing).

La Vita è Bella, then? Not everything is so appealing as it seems, particularly for incumbents in the market. This is because Italy is difficult to enter, not easy to understand and hard to grow in numbers. Notwithstanding the good intentions of Prime Minister Matteo Renzi, the country is still battling with a cumbersome bureaucracy that makes it difficult and costly to open and run a company, with high level of complexity that can discourage even the most optimistic executives.

Understand the Differences

In addition, a key factor to succeed is understanding the differences. Italy is at least three countries in one: 1) The industrial north with working women, small flats, few social connections; 2) The middle size province, in the north and centre, with good level of living, high income but less dynamic; 3) The underdeveloped south, striving to grow and reach the rest of the country, still poor with low purchasing power for customers, with a lot of people willing to start the activity but facing many difficulties in their job, with lousy infrastructures and services.

Failing to understand these differences will create serious problems in the possible ways to develop the business, starting from the correct product pricing, the size of starter kits, the ideal format and wording of a recruiting bid.

Competition

Last but not the least, it is hard for a new company to grow fast in numbers. Italy is a mature market with some really strong companies. Vorwerk Kobold is the absolute leader with a highly professional sales force, an enormous brand awareness (with the Italian name Folletto) and the financial resources to be able to sponsor a Serie A soccer team like Fiorentina. Other strong companies include Avon, Herbalife, Vorwerk Thermomix, Just, Stanhome, Amway, Tupperware and AMC. All traditional direct selling companies are well established, with a long history and tradition and it is absolutely not easy to compete in this crowded market. Competition is for parties if you are a party plan company, for recruits and sales leaders for everybody in our industry who wants to develop a sales force base.

If you want to succeed, you need to offer something strong in terms of product (yes, Italians recognize quality!),  and a proven selling method to ensure earnings and satisfaction to your prospective consultants. The profile of direct sellers (mainly women, aged 35-50, married with children) suggests a lot of potential for real “social selling” companies offering online tools and social media specific to attract millennials into the industry. This is valid as well for existing companies who are slowly moving towards the adoption of technology and to try to get away for old fashioned “push” systems to start experiencing new ways to contact consumers and consultants.

Italy is full of opportunities, not only for outside companies but also for inborn entrepreneurs to fully exploit the country traditional strengths, like fashion, clothing and accessories and the incredible food sector, particularly wine, olive oil and coffee where the Italian quality could easily spread to the rest of the world. And don’t forget, La Vita è Bella!!

(*) Life is Beautiful!





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Global Direct Selling Industry in 2015 https://worldofdirectselling.com/global-direct-selling-2015/ https://worldofdirectselling.com/global-direct-selling-2015/#respond Mon, 11 Jul 2016 03:00:45 +0000 https://worldofdirectselling.com/?p=9100 Few weeks ago the WFDSA (World Federation of Direct Selling Associations) announced 2015 figures it had gathered from local organizations. Before that, we had Direct Selling News magazine’s company-specific sales volumes. 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 […]

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Few weeks ago the WFDSA (World Federation of Direct Selling Associations) announced 2015 figures it had gathered from local organizations. Before that, we had Direct Selling News magazine’s company-specific sales volumes.

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 Direct Selling Regionsregion 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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