Not on e-commerce, believe in personal involvement: Senior Director- Marketing, Oriflame
Naveen Anand speaks to exchange4media on why Oriflame has not adopted an e-commerce model yet despite their competitors investing heavily in it
Cosmetic brand Oriflame has completed 50 years globally and has direct selling business in more than 60 countries. The wide portfolio of Swedish beauty products is marketed through more than 3.6 million independent consultants around the world. Oriflame has further strengthened its portfolio by launching the Optimals range. The brand generates annual sales of around €1.5 billion.
exchange4media spoke to Naveen Anand, Senior Director - Marketing, Oriflame South Asia, to understand why they have not adopted an e-commerce model yet, despite their competitors investing heavily in it. We also asked him where India stands in their growth plan.
According to various reports, the cosmetic industry is growing at a rate of 20%. Where do you see the Indian market five years from now? How has the changing retail environment in India shaped the current trends?
As per the Euro Monitor (a global agency on tracking data), the Indian cosmetic market is currently growing at the CAGR of 16%, and we do believe that it will continue to be strong. We will have double-digit growths very soon. The market has been shifting from cheaper products to premium products with greater value. That’s a positive shift. It means consumers are paying attention to the product quality and are willing to pay a premium amount to get a high-performing product.
What percentage of Oriflame’s total revenue comes from India?
We can’t disclose the figures, but India is an important market for us. We see India as one of the top five global strategic markets. There is lot of potential in the market. We are present in 60 countries, but India is at the top. It is the highest growth market for us and we will keep investing here.
While other brands have tapped into the rural market, Oriflame is still an urban brand. Do you have plans to enter the rural market in the coming year?
We don’t just want to expand our geographic footprint, but also want to strengthen our presence in areas where we already exist. We have plans to enter a couple of cities in the coming year or so. We will enter the rural market after we have achieved full success in the markets we are currently operational. For entering the rural market, we need to align ourselves accordingly and have a fair understanding of the consumers’ need and price points.
Buyers have shifted to e-commerce sites in a big way, but Oriflame still relies on direct selling. Why are you not including e-commerce in your business model?
We don’t want to be on e-commerce sites, because we have a very different business model. We believe in the power of people recommending our products to other people. We actually believe in personal involvement and therefore we don’t want to be on e-commerce retailing.
You came up with a digital campaign, #Beautifulchange. What new can we see in 2018?
#Beautifulchange is our contribution towards society. It is our way of telling the world that our aim is to not only sell our products, but also to do something for the environment. Through the campaign, our idea was to spread a positive message to society, that each one of us can bring a change to the life of others. The digital platform for us was a way of communicating to the larger audience. Optimals is the next thing that we have adopted towards this goal. We have done a fair amount of work and are ready to accelerate it.
Which segment does your Optimals range of products cater to?
The skin care market has certain segments. While we already have a product in the premium segment known as NovAge, Optimals will be our mass offering. Both products are great. However, depending on the money spent by the consumers, we want to put products in categories. We are segmenting Optimals from a price point of view, but it still delivers natural products optimised by science.
Oriflame has been extremely careful about two things; first, how good are the products in terms of performance and second, how safe are they. Our products go through rigorous quality checks to ensure safety.
Lot of brands have introduced natural products in their line-up. What is your strategy to take on these competitors?
We believe in Swedish natural ingredients and cutting-edge science. We have over 150 scientists who are involved in R&D. Their work is to study these natural ingredients to find the best fix for our products. We will continue to work on our strengths because that makes us proud.
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