After experiencing a growth rate of nearly 15% per year during the 2000s, Oriflame saw its momentum stopped in its tracks by the 2008-2009 crisis. Since then, sales have stagnated, with a turnover approaching € 1.5 billion. To find a new lease of life, Oriflame has repositioned its brand under a new slogan “Your dreams - Our InspirationTM” and signed a contract of international representation with actress Demi Moore. But the Swedish giant specialized in the direct sales of beauty products, founded in 1967 by brothers Jonas and Robert af Jochnick, can also rely on other assets.
Researchers and consultants
Oriflame can first build on a strong capacity for innovation. Its R&D centre in Dublin, Ireland, designs each year more than 400 new products for the global market. Its 160 researchers and technicians from 14 different countries, have an accumulated experience of 927 years!
Other strong point: an impressive sales force. Oriflame can rely on 3.4 million independent consultants (90% of which are women) located in more than sixty countries, including 1.8 million in its flagship market: CIS countries and the Baltic region. Oriflame has operations on every continent except North America. Recently the group set up a new remuneration scheme for its consultants in the CIS with the aim of boosting sales.
“Oriflame wants to maintain its position in its flagship markets and increase its presence in Africa, Asia and Latin America,” explains Johan Rosenberg, Executive Vice President Global Marketing and R&D. The group’s business model makes it particularly suited to developing countries, where beauty products are less accessible due to an underdeveloped or ill-adapted distribution network.
Among noteworthy launches planned for the month of September 2013, the new Ecollagen cream, which is based on natural ingredients originating from the Swedish countryside while taking advantage of the benefits of stem cell cultures. For Alain Mavon, Skin Research Director at Oriflame, “this allows using very little plant material and increases without limit research opportunities since even protected plants can be used without causing any damage to the existing flora.”
Another novelty for the fall season, the new Colour Drop lipstick with a grape shaped like a water drop. According to Jonas Wramell, the Company’s Global Beauty Artistic Director, the idea was to replicate “the shape of the lips for a perfect application.”
On the side of hair care, Oriflame has focused research on the “health” of the scalp. The new formula in the HairX shampoo was designed around a ginger derived component, 6-Gingerol, selected for its “anti-oxidant, soothing and purifying” properties.
Reorganization of the EMEA region
The group has also announced a series of measures to be implemented during the last quarter of 2013 and early 2014, with the aim to improve time to market, increase the efficiency of catalogues and promotional campaigns, while improving the company’s overall efficiency.
Oriflame will first create four new sub-regional structures (Central Europe, Western Europe, Turkey, Africa) to take a better account of local specificities and particularly of the markets’ various degrees of maturity. In parallel, the EMEA structure will be reduced.
In the same vein, the creation and production of product catalogues will be managed by the new sub-regions to better ensure their adaptation to the needs of the concerned markets.
Other measures are aimed to streamline costs: a better distribution of responsibilities, a greater centralization of purchases at a global level, the further integration of information technology tools at the back office level. These efforts, according to the group should help generate savings of 15 to 20 million euros.