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Oriflame: Inspired by Nature, Powered by Science

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Active in 60 markets. Over 3 million Brand Partners. Appearing in the top 15 companies of our Global 100 for the last 10 years. Oriflame is a leader with eyes on a beautiful, sustainable future.

 Over 50 years ago brothers Jonas and Robert af Jochnick and friend Bengt Hellsten launched Oriflame, a cosmetics company that would introduce the world to their Swedish view of beauty— one inspired by nature, simplicity and balance. Their family-owned business would eventually become one of the most well-known beauty brands in the world, as their dedicated field of Brand Partners work with the same passion to share this new definition of beautiful.

“Because we’re from Sweden, we have a different view on beauty,” explains CEO and President Magnus Brännström. “It’s a way of life: to be healthy, enjoy beautiful skin, express yourself and have fun. It’s about being confident in who you are and finding balance in life. A balance that comes from the inside and out—that puts you in control no matter what life throws at you—that lets you grow and thrive.”

Jonas and Robert’s original dream has maintained a relevancy that few beauty brands can claim. From the beginning, Oriflame has focused on the intersection of nature and science, developing beauty and wellness products inspired by native Swedish plants and herbs studied and stewarded by the company’s scientists and physicians. Today, Oriflame’s collection of products includes skin care, cosmetics, fragrance, personal and hair care, accessories and wellness—every item an integral component of the company’s takes on holistic beauty.

“Because we’re from Sweden, we have a different view on beauty.
—Magnus Brännström, CEO & President, Oriflame

“Holistic beauty starts from the inside,” says Brännström. “Together with doctors and scientists, we developed a nutritional program for daily usage called Wellness by Oriflame. It consists of the important vitamins and minerals you need every day, but also includes protein to manage your weight and balance the diet. Wellness by Oriflame is a certain lifestyle when you gradually change your habits towards a healthy and thus more happy and beautiful life.”

Social Selling—A Natural Fit

As retail fades and social selling takes even more ground in the beauty space, Brännström views Oriflame’s opportunity as a golden one.

“The whole vision going forward is that retail with the regular physical stores will cease to exist. We see it happening already now,” he says. “One of the challenges in this new world is that the consumer can now choose from 50,000 different alternatives online. We are a company helping consumers make the right choice through our Brand Partners, who have knowledge not only about the product but also about what our consumers want. I believe that the social selling of tomorrow will mostly be the exchange of views and recommendations between friends, and it will be primarily done virtually.”

“We have chosen to focus on our people’s wellbeing and on our culture during the quarantine, and the trust we built is incredible.”
—Elena Aylott, Vice President Global Employee Experience, Oriflame

Across 60 countries, Oriflame’s three million Brand Partners couldn’t agree more. Oriflame’s business opportunity invites Brand Partners to experience the Swedish ideals the af Jochnick Brothers built their business around. Individuals can join the company as either Brand Partners focused on building businesses and sharing products or as VIP Customers with easy access to new products and discounts.

“We’ve had a natural ethos from the beginning,” says Michael Cervell, Senior Vice President Group Strategy and Business Development. “But even more than that, we offer a culture that believes everything is possible. Our mission is to fulfill dreams—big words, but we want to give people all around the world, who buy into our values, an opportunity to learn, grow and earn. Creating a better life for themselves and their families by living and promoting our product solutions and business.”

 

The Oriflame Way

Both Brand Partners and corporate team members refer to this better life as the “Oriflame Way”—the practices and behaviors that unite the company and drive its success.

“We Oriflamians are very curious by nature, and we are constantly trying new tools, technologies, and ideas,” says Elena Aylott, Vice President Global Employee Experience. “We even won the Best Learning Culture Award from LinkedIn last year. We are running global employee ideation events called Dragon’s Den, where our people pitch new ideas for the business. We are known for our great staff parties—we love having fun together!”

Togetherness is one of Oriflame’s core values, inspiring the company to prioritize consistent and transparent internal communication through channels like Teams and Yammer. This is has been especially helpful throughout the COVID-19 pandemic, as teams could easily communicate in their new work environments.

“We could quickly re-adjust ourselves to working from home, as both digital culture and digital tools were in place. We have chosen to focus on our people’s wellbeing and on our culture during the quarantine, and the trust we built is incredible,” says Aylott.

Sustainability and Strategy

Oriflame’s connection to nature isn’t limited to its innovative product lines. Long before sustainability was a buzzword, the company was already putting initiatives in place to positively impact the environment that means so much to all Oriflamians. Since 2010, the company has made changes to its production and logistics in an effort to reduce its impact on climate, water and forest. Thus far, many of those goals have been achieved, including a 48 percent reduction in CO2 emissions, 100 percent green, renewable electricity at all operations, sustainable board packaging and catalog paper, 100 percent natural origin exfoliants (no plastic beads) and the addition of biodegradable skin care and personal care ranges. These successes are only some of the milestones achieved—many more are anticipated between now and 2025.

The social selling of tomorrow will mostly be the exchange of views and recommendations between friends, and it will be primarily done virtually.
—Magnus Brännström

Oriflame anticipates continued growth, as the company focuses on investing in the Brand Partners taking Beauty by Sweden to every corner of the globe.

“We have a Brand Partner-centered focus for our strategy,” says Cervell. “This means that we want to ensure they have unique products, leading digital tools, systems and training to truly add value to our customers. We see great growth opportunities within the many markets we are already in, but we may also enter new markets, though not at the speed we did in the last 20 years.”

New products are on the horizon as well, says Brännström. “We have accumulated lots of knowledge in the area of skin care, we are doing research and testing in our laboratories, and we are very careful to choose the right ingredients that work. We are also investing in education for our Brand Partners—they add profound value by understanding the ingredients, the way the products work and recommending the right product for certain needs.

As we have a holistic approach to beauty, we don’t really go for miracle cures. We believe in every day, in taking care of yourself step by step, all the time.”

PM-International: Agility Through Innovation

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Investment in R&D positions company to deliver on founder’s vision of growth.

Based in Schengen, Luxembourg, PM-International develops and distributes through its independent sales force of approximately 35,000 distributors (called “Team Partners”) a variety of premium products for health, fitness and beauty through its brand, FitLine®. The company was founded as P.M. Cosmetics GmbH in Germany in 1993 by its current CEO, Rolf Sorg. Today, PM-International operates in more than 40 countries and employs a staff of more than 670 employees. In 2019, PM-International celebrated the grand opening of its Headquarters Americas, including a fulfillment center, in Sarasota, Florida. Global sales for 2019 reached $1.11 billion, marking the first time the company broke the $1 billion barrier; global sales were $834 million the year prior. “We weren’t the fastest company in the market to get to $1 billion,” Sorg says, “but we were always growing consistently, always with a clear focus on our goals and core values.”

Sorg was a student looking for a side income when he discovered direct sales. Eventually, he worked his way up to become the company’s most successful distributor, at which point he made the decision to pursue direct selling full time. In 1993, the company Sorg represented went out of business, so he opted to start his own. His objective, he says, was to give others the same opportunities he’d enjoyed in the industry: premium quality products and a transparent, fair and duplicable business model. “We live by the principles ‘If I can do it, you can do it’ and ‘simple, successful,’” Sorg says.

“Keeping our distance does not mean we can’t provide personal customer service, have exchanges within the team or hold trainings anymore.
—Rolf Sorg. Founder & CEO, PM-International

Milestones

Among the company’s achievements in its 27-year history is its involvement in international elite sports. PM-International’s FitLine® brand has partnered with organizations including the German, Austrian and Polish ski associations, German Ice Hockey Federation, German Cycling Federation, German Athletics Association, Swiss Sliding Federation, the Swiss and Luxembourg Handball Federations and the Luxembourg Basketball Federation. As of 2020, FitLine is also the official supplier of nutritional products of the Canadian Ski Association Alpine Canada. The company also collaborates with the Cologne List®, which only includes products that have undergone rigorous tests for specific doping substances. These third-party, high-profile alliances have been advantageous for the sales force, Sorg says. “The sports marketing conceptof PM-International, and especially the testimonials and success stories of the athletes, increase the trust in our brand. For our distribution partners, it’s a tool to spark interest in our products among athletes and sports fans.”

In 2013, PM-International was the first direct sales company to receive the certified direct sales rating from the German Association for Technical Inspection (TÜV Hessen). The certification procedure includes an on-site audit at company headquarters and evaluates such criteria as license fees, support of distribution partners and transparency of the marketing plan.

“The sports marketing concept of PM-International, and especially the testimonials and success stories of the athletes, increase the trust in our brand.
—Rolf Sorg

Research and Development

In the spirit of continual improvement, PM-International has made a significant investment in research and development in recent years. They concentrated on intensifying basic and applied research with its in-house team of scientists from the fields of nutritional sciences, cell research and food technology and collaborating with universities and research institutions like the Luxembourg Institute of Science and Technology (LIST) and the University of Applied Sciences Upper Austria. Thanks to its ongoing commitment to innovation, the company owns more than 70 national and international patents.

“Our main task is to develop new high-quality products for health, fitness and beauty,” says Dr. Tobias Kühne, Chief Scientific Officer at PM-International. “In addition, we’re relentlessly working on increasing the bioavailability of FitLine® products by developing and improving new formulations, replacing ingredients and reworking recipes around our patented NTC® and thus improving people’s quality of life.”

In 2016, the company signed a strategic collaboration agreement with the Luxembourg Institute of Science and Technology (LIST). A joint research project, ACTIVITIS, aims to extract secondary plant compounds from grape pomace, a by-product of the local wine industry, and “upcycle” them for industrial purposes in a sustainable way. Last year, PM-International made a substantial contribution to the opening of the Josef Ressel Center for Phytogenic Drug Research at the University of Applied Sciences Upper Austria.

The Pandemic

Our global pandemic, Sorg says, has reminded his company and distributors how important it is to be flexible and adapt quickly in the face of disruption. “I’m especially proud of our Team Partners— they’ve kept a positive focus and shown great leadership throughout these challenging times. Keeping our distance does not mean we can’t provide personal customer service, have exchanges within the team or hold trainings anymore.”

Having already introduced a series of digital innovations to its sales force in the months before the pandemic, PM-International was prepared to pivot its operations and help its distributors to do the same when stay-at-home orders began throughout the globe. At the beginning of the year, the company introduced PM TV, which offers unlimited streaming of events, training and information to a worldwide audience. Team Partners have the infrastructure to consult their customers via video conference from home and place orders online. On the back end, those orders are handled in-house through the company’s Customer Direct Program. As an additional support, PM-International offered worldwide free shipping for end customers during April, May and June.

Earlier this summer, PM-International announced the global launch of its PM DirectCash program, which enables Team Partners to receive their retail income instantly for every online customer order. Retail income is credited in realtime to the distributor’s My PMPay e-wallet mobile app, after which she may choose for the funds to be deposited into a bank account, her My PMPay debit card or PayPal account. The PM DirectCash program represents another step forward in giving Team Partners the ability to run a completely digital business.

Philanthropy

Through its foundation, PM We Care, PM-International has been involved with global philanthropic efforts for nearly two decades.

As the largest corporate sponsor of the relief, development, and advocacy organization World Vision, PM We Care supports 2,300 sponsored children, their families and entire communities in more than 60 regional development projects around the world, including India, Peru, Cambodia, Mongolia, Ghana and Indonesia.

In response to the global pandemic, PM-International established “PM Helps,” a fund of 1 million euros to help people in some of Europe’s most severely affected regions including Germany, France, Spain and Italy. Donations included protective gear and medical devices for hospitals, energy bars from its own product line and money to provide catering for health care workers and families in need, as well as disinfectant for the safe reopening of schools.

“Our next goal is to realize 100 percent recyclable product packaging by the end of the year.”
—Rolf Sorg

The Future

“I see it as my personal responsibility to Team Partners to build a business model that will continue to function sustainably for future generations. Sustainability is an important topic we are working with right now,” Sorg says. “Our next goal is to realize 100 percent recyclable product packaging by the end of the year.”

The company’s ambitious growth plan includes the investment of several million euros in the expansion of the company’s International Headquarters in Luxembourg, a fourth warehouse at its European Logistic Center in Germany, an additional 10,000-plus square feet of storage space at its Headquarters Americas in Florida and additional office space for Headquarters Asia-Pacific in Singapore. As for its global expansion strategy, PM-International recently began operations in Ukraine. Next on the company’s agenda are grand openings in Canada and Indonesia, and an expansion of its business in Europe, with pre-launch phases in the United Kingdom, Belgium and Hungary. “Strategically and economically, we are well positioned to become Europe’s largest network marketing company within the next three years,” he adds.

“Now the tyranny of the present is supreme. A lot of organizations have had no choice but to focus on surviving immediate threats,” says J. Peter Scoblic in an article for Harvard Business Review (“Learning from the Future”; July/August 2020). At the same time, he adds, leaders must continue to plan for the future even in the face of uncertainty.

“The stakes are high, and decisions that leaders make now may have ramifications for years—or even decades. As they try to manage their way through the crisis, they need a way to link current moves to future outcomes.”

Atomy: Breaking the Mold

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Proves that work and play aren’t mutually exclusive.

Based in Gongju, South Korea, Atomy provides more than 400 products in various categories including nutritional supplements, beauty, fashion and home décor. Founder and Chairman Han-Gill Park first encountered direct selling during a business trip to Australia. Afterwards, he quit his job and became a distributor for a direct selling company. Park reached the top level of the sales organization but ultimately lost the business he’d built when the company closed.

Park subsequently started im-korea.com, an online shopping site, implementing some of the techniques he’d learned in direct sales. Still, the company failed to take off due to inadequate infrastructure and a lack of consumer awareness. In 2009 and on a shoestring, he launched Atomy based on a philosophy of “Absolute Quality and Absolute Price”—selling prestige-quality products at prices the masses could afford. His intent was never to compete with other direct selling companies but rather other distribution channels. He also established several other non-negotiables: a commitment to honesty and integrity, a “one partner per product” philosophy (meaning one manufacturer per product line, which, along with cash payments upon delivery and interest-free financial assistance for operating costs, helps partners grow) and the company’s profitability through an economy of scale.

Atomy’s flagship product, HemoHIM, a health supplement designed to boost immunity, was developed as part of a government project by the Korea Atomic Energy Research Institute in 2004. It was a best-seller in the Korean direct sales industry for six consecutive years (2014-2019). Originally, HemoHIM was offered through another distributor at a price of $770 for 60 packets. Atomy now sells 60 packets of the same product with the same ingredients for $84. HemoHIM and several other Atomy products—including the top-selling Absolute CellActive Skincare System—are sold by a global sales force of 10 million distributors.

“The past ten years have proven that consumer-centered management is much more effective than that of the membership-centered.”
—Han-Gill Park, Founder & CEO, Atomy

The company maintains a consumer-centric focus. “Our message is clear: Try only the products you need and only if you’re truly satisfied, recommend them to other consumers,” Park says, adding that a disproportionate focus on distributors isn’t sustainable; “many companies aren’t concerned whether their products are marketable in quality and price but are rather fixated on how much commission to pay out in order to maximize membership. This commonly becomes the reason for the higher prices of direct selling products over others. The direct selling industry shouldn’t forget that it’s just another form of distribution. The past ten years have proven that consumer-centered management is much more effective than that of the membership-centered.” Global sales for the company totaled $1.15 billion in 2019, and it maintains 14 global corporate offices in locations including the United States, Japan, China and Russia.

An Office at Play

It’s hard to argue that Atomy has one of the most unique corporate cultures in the direct selling industry. Take, for example, its “free title system.” Employees are given the latitude to choose their own professional titles, regardless of their respective seniorities. The only stipulation is that they assume responsibility for the duties suggested by their titles.

Adopting a “Chutzpah Mindset,” or being bold, asking tough questions and remaining tenacious in the face of insurmountable challenges, is another core value at Atomy. Employees also enjoy “powers without a yoke of burden,” meaning that “we give our employees the powers they need to carry out tasks without holding them liable for the consequences,” Park says. The objective is to capitalize on employees’ strengths and give them the courage to take risks without fear of retribution should they fail. Managers evaluate employees’ performance based on demonstrated effort to reach above and beyond.

Within a decidedly flat organization, Atomy encourages employees to work through influence, not rank. “An experienced soldier doesn’t mindlessly comply with his commander’s orders. He scans the battlefield himself, understands his allies’ moves, and responds to the enemies’ actions to find the best way to win. He plays the role of a soldier as well as a commander. Atomy employees should also think of themselves as executives and grasp how their actions impact the company’s viability as a whole,” Park says.

Reflective of this unconventional culture are Atomy’s headquarters in South Korea, recognized by the Korean Institute of Architects in 2019 and reminiscent of a Google or hip Silicon Valley IT startup. An August 2019 feature in Forbes Korea describes an open floor plan in which employees work where they choose, are exposed to diverse skillsets and thinking, and enjoy such amenities as an indoor pool, a pool full of rubber balls, swings hanging from the ceiling, a “Thinking Room” with toilet chairs, a “Slam Dunk” room with basketball hoops, a camping space designed to bring the outdoors indoors, massage chairs, a children’s playroom and hair salon. “We didn’t create play spaces in an office but office spaces in a playground,” Chairman Park told reporter Hoon Beom Lee, adding that his intent was to create an environment that tempered a propensity for overworking—something he admitted he used to do—and that burnout was the enemy of creativity.

Research and Development

In October 2019, Atomy celebrated the groundbreaking ceremony of Atomy Orot Factory in Gongju City, a facility that includes a centralized research center and food research lab. It will be the key engine of the research and development of Atomy food products that use natural ingredients without artificial flavors or additives.

Through a strategic partnership with Kolmar Korea, a global original design manufacturer (ODM) in the skincare and health supplements sector, Atomy researches and develops products in line with its philosophies and principles while following consumer trends—for example, the company’s number-one product, the previously mentioned HemoHIM, developed by Atomic Energy Research Institute and manufactured by KolmarBNH.

Atomy also seeks out small or mid-sized companies that offer quality products but have encountered difficulties with sales or product promotion. The company’s aim is to build and nurture long-term, mutually beneficial partnerships by providing these companies with a secure sales route, financing and support of quality improvement efforts.

The Pandemic

As is the case for many direct selling companies, Atomy employees and distributors had to respond to changing work conditions quickly. With the onslaught of the coronavirus, what Park refers to as the “no-contact” trend has picked up steam at Atomy; the company canceled all in-person events and replaced them with video streaming through its own channels. Salespeople have opted to meet in smaller groups of two to three prospects at a time, which affords them the opportunity to provide participants with a more in-depth introduction to sponsorship.

The pandemic has inspired increased popularity of products designed to improve immune function—for example, HemoHIM, which recorded sales of 67 billion KRW at the end of April 2020, a 20 percent increase from the year prior. “As the situation with COVID-19 continues, people are taking more of an interest in health and immune systems than ever before,” said Reporter Chan Yu of Money Today Network (MTN) in a recent broadcast. “As a result, the dietary supplement industry is showing a jump in sales which is set to expand not only in Korea but also globally.”

Philanthropy

Atomy maintains an active philanthropic presence, from its annual Atomy Run fundraising event, which offers 1:1 matching donation to various causes. Its support of children’s welfare projects, including the donation of 2.7 billion KRW in July, 2020, for the construction of a public children’s rehabilitation hospital, the construction of an academic institute at Siloam Eye Hospital, and a 10 billion KRW (approximately $8.7 million) donation to the Community Chest of Korea, the country’s largest welfare institution, to help single parents, underaged or young mothers become economically independent. The Community Chest donation, made through Atomy’s “Life Cherishing Mom” fund, is the largest among those made by mid-sized companies in Korea.

The Future

Despite the pandemic, Atomy opened the Chinese market this July and is scheduled to launch three new markets before the end of 2020: India, Colombia and Turkey; and in the next five years, it plans to begin operations in Europe (UK, Germany, France) and Africa (South Africa, Ethiopia). By 2030, Atomy will be available in more than 30 countries worldwide.

The next phase of Atomy’s business, Park says, is a platform that blends business and entertainment to engage distributors in a new way. Launched in 2019, Atomy Entertainment & Multimedia, or Atomy ENM, is an “entertainment-centric distribution company” led by renowned drummer Lino Park. It’s designed to encourage and inspire Atomy distributors and provide accessible and entertaining content they can use as a tool to grow their businesses. ENM creates both online and offline content and presents shows using technologies like augmented, mixed and extended reality. Its inaugural show, Atomy Dream Hub Festival, took place in 2019 and entertained distributors and residents of Gongju where the company is based. “We expect Atomy ENM to play a key role in attracting the next generation with fun content through the latest technology and media,” Park says.

Billion Dollar Markets

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WFDSA dissects global sales data for a clearer picture.

2019 was a year like no other in the direct selling industry. The trajectory seemed set for China to ultimately out-sell the United States and come into its own at the number one spot on the DSN Billion Dollar Markets list. But newly released data from the World Federation of Direct Selling Associations illustrates how the complexities within an enormous market can negatively impact global sales, while the broader industry realizes year-over-year growth.

Unsubstantiated cure claims by a Chinese wellness company early in 2019 called into question the entire wellness segment in the world’s second-largest market, China. The subsequent 100-day halt to sales of dozens of products and investigations by the Chinese government served a blow to global sales. Rebuilding momentum within the wellness sector and, to some extent, the reputation of the direct selling industry in China was arduous and continues.

Just as the industry cleared that hurdle, COVID-19 emerged. The effects of the global pandemic on sales are not reflected in WFDSA 2019 data; however, it is important to remember that behind each data point on the survey are vulnerable people—members of the direct selling industry who sell products in the field, manage spreadsheets and calculate sales at company headquarters, and report figures from direct selling associations around the world.

It was during the global pandemic’s early days that WFDSA queried for information and waited, concerned for the broader direct selling industry family and unsure if they were healthy, sick or able to respond at all.

Formally collecting data since 2009, WFDSA’s 2019 data collection was unprecedented. Josephine Mills, co-chair, WFDSA Global Research Sub Committee, says the situation surrounding COVID-19 reinforced our understanding of just how serious and how committed everyone is to the data collection process.

Through the illnesses, people endured business disruptions and lack of office continuity, WFDSA member DSAs around the globe continued to collect, consolidate and report statistical data to WFDSA’s independent third party. What emerged from that raw data is a dual-focused picture of 2019, one that dissects global sales—including and excluding China.

WFDSA reports global estimated retail sales of $180.5 billion (Constant U.S. Dollars) for 2019. Excluding China, worldwide retail sales showed a year-over-year increase of 1.4 percent with all regions around the globe up from 2018. Global sales results, including China, resulted in a decrease of 4.3 percent.

However, the industry’s 5-year Compound Annual Growth Rate (CAGR) maintained a healthy expansion pace of 2.3 percent (excluding China) and 1.6 percent (including China). Global direct selling performance since 2016 added $6.9 billion to the industry overall (excluding China); but shrank $1.6 billion with China added to the mix.

Retraction of the global (including China) market was driven by the significant decrease of 10.3 percent in the Asia-Pacific region, of which China is a part. However, excluding data from China, all four global regions made gains: Asia-Pacific, up 2.2 percent; the Americas, up 0.7 percent; Europe, up 0.8 percent and Africa-Middle East showed the largest gains of 11.6 percent.

Last year’s list of 24 billion dollar markets remained the same in 2019 with some minor shifting in rank. The top ten countries on the list—led by the U.S.—generated 78 percent of global estimated retail sales.

The industry’s global sales force dropped 1.7 percent from 2018’s 122 million to 119.9 million in 2019, but showed a solid 1.8 percent 3-year CAGR. Segmentation data recorded 15.2 million full-time (30+ hours weekly) independent representatives and 44.2 million part-time (up to 30 hours weekly). 60.5 million garnered product discounts. All told, 74 percent were female; 26 percent male.

Sales from emerging markets, which included China, were expected to overtake advanced economies in the coming years, but for now, that trajectory toward balance has halted. WFDSA reports advanced markets held 60.5 percent share of global direct selling sales in 2019, compared to 57.6 percent in 2018. Emerging markets captured 39.5 percent in 2019, down from 42.4 percent the previous year.

Make no mistake, growth opportunities still exist in emerging markets. By omitting China, emerging markets grew 3.7 percent over 2018 with a 3-year CAGR of 4.5 percent, which outpaced overall industry growth.

 The Americas

The Americas—North and South/Central—comprised 34 percent of direct selling’s global estimated retail sales in 2019. Combined, they reported $61.8 billion for 2019, posting growth of 0.7 percent with CAGR rising slightly to 0.5 percent.

Eight billion dollar markets exist in this region, where Cosmetics and Personal Care products hold 33 percent of sales; Wellness increased to 28 percent; and Household Goods and Durables a distant third at 11 percent. The number of independent representatives remained steady at 30.9 million after losses in 2017 and 2018.

Regional data for the Americas is reported together; however, the Americas are split here to better understand each of the distinct markets.

North America

North American direct sales slowed in 2019, reporting $37.7 billion in sales, down 0.8 percent.

The United States, which holds 20 percent of global market, saw flat-line sales of $35.2 billion, down 0.4 percent. U.S. CAGR is at -0.3 percent. Canada realized $2.5 billion in sales, a 6.0 percent decrease, with CAGR trending down at -2.4 percent.

According to WFDSA, more than 17.5 million independent representatives reside in North America; 16.4 million in the U.S. and just under 1.2 million in Canada. Segmented data from USDSA showed 900,000 full-time independent representatives and 5.9 million part-timers. They were predominately white/Caucasian (83 percent) and 74 percent were female. 67 percent were between the ages of 25 and 54.

Wellness was the top U.S. product category at 36 percent. Neither product nor segmented representative data for Canada were reported.

USDSA reported 36.9 million direct selling customers in 2019 with 9.6 million designated as discount buyers and 27.3 million as preferred customers. Countless more customers, who have not signed an agreement with a direct selling company, were not represented in that 36.9 million. Some geographic hotbeds for direct selling were Texas, California, New York and Florida.

“U.S. direct selling revenue not only remained stable during the past four years; it also offered many opportunities for growth.
—Ben Gamse, US DSA Senior Marketing Research Manager

Ben Gamse, USDSA’s senior market research manager, points to the 2020 Growth & Outlook Survey, comprised of 2019 industry overview data collected pre-coronavirus, that indicates U.S. direct selling revenue not only remained stable during the past four years; it also offered many opportunities for growth.

Interest in flexible, entrepreneurial/income-earning opportunities was high among Americans—77 percent overall. But it was most appealing to younger generations with 91 percent of Gen Zs and 88 percent of millennials. Direct selling enjoyed a broad, diverse appeal with prospects: 48 percent, female; 35 percent, millennial; and 20 percent African-American.

Overall, direct selling was seen as an attractive option for those interested in entrepreneurial endeavors, with direct sales showing 79 percent favorability just below Gig work at 81 percent. The initial cost/risk assessment of direct selling versus other entrepreneurial opportunities also weighed in the industry’s favor.

U.S. consumers were positive about direct selling with opinions remaining stable at about 80 percent over the past decade. The ability to support small businesses (69 percent) and personalized service provided by direct sellers (67 percent) appealed most to consumers. With 89 percent of American consumers utilizing some form of social media, nearly half (46 percent) said they welcomed online contact from direct sellers regarding business opportunities.

South/Central America

The South/Central America region is made up of six billion dollar markets: Brazil, Mexico, Colombia, Peru, Ecuador and Argentina. With the exception of Ecuador (down 3.4 percent), all other markets grew in 2019. This region reported estimated retail sales of $24.1 billion, an increase of 3.1 percent and a CAGR of 1.9 percent.

Market performance breakdown was as follows: Brazil ($9.8 billion, 5 percent of global market, 0.2 percent CAGR), Mexico ($6 billion, 3 percent of global market, 1.9 percent CAGR), Colombia ($2.3 billion, 0.8 percent CAGR), Peru ($1.9 billion, 5 percent CAGR), Argentina ($1.1 billion, 26.4 percent CAGR), and Ecuador ($1.2 billion, 2 percent CAGR), and Argentina ($1.1 billion, 26.4 percent CAGR). Argentina’s growth is fueled by high inflation.

While Cosmetics and Personal Care products remain the top category at 61 percent, 2019 showed a second year of decline from a high of 66 percent in 2017. Nearly 13.4 million independent representatives were direct sellers.

Asia-Pacific 

There are ten billion dollar markets in the Asia-Pacific region, which generated 44 percent of global retail sales. In 2019, Asia-Pacific sales totaled $78.9 billion, a decrease of 10.3 percent. The 3-year CAGR stood at -1.8 percent. 68.4 million independent direct sellers represented products and services here. That was 57 percent of the global total. Wellness products comprised 51 percent of all sales (up nearly 10 percentage points from 2018), with Cosmetics and Personal Care at 23 percent.

The complexities of the China market—the largest within Asia-Pacific—loomed large in 2019, as the government cracked down on the direct selling industry following unsubstantiated cancer cure claims by a Tianjin-based health and wellness products company. The resulting “Hundred Days of Action” prompted investigations, revoked the selling rights for 49 products and took a toll on sales which dropped by 30 percent. U.S. wellness companies like Herbalife Nutrition, Nu Skin and USANA suffered second quarter losses, reset expectations for the remainder of 2019 and slowly gained traction.

China’s $24 billion in estimated retail sales—13 percent of global market—for 2019 was $10.3 billion off 2018’s mark. The closed nature of China’s market resulted in the use of data estimates from the most reliable sources available. The WFDSA Global Research Sub-committee agreed the governmental halt and 100-day review of the promotion and sales of health products during Q1 of 2019 was the primary cause for China’s sales decline.

With 89 percent of American consumers utilizing some form of social media, nearly half said they welcomed online contact from direct sellers regarding business opportunities.

“While this review was not specifically related to the direct selling, it did have a significant impact on many companies. This also impacted the availability and reliability of some of our data sources. There is no other significant change in the China data beyond this factor. We expect to see the impact of COVID-19 reflected in the 2020 data, but was not a noteworthy impact in 2019,” the Sub-committee reports.

As a result of these in-market, temporary changes, China fell to a number two ranking in the Billion Dollar Markets list and it brought their 3-year CAGR to -9.7 percent. Independent representative numbers also declined sharply from 5.6 million in 2018 to 4.1 million in 2019.

But Asia-Pacific’s story was not limited to China. Nine other countries rank on the 2019 Billion Dollar Markets list. India marked significant growth, generating more than $260 million more dollars in estimated retail sales over 2018 with a total of $2.5 billion and a CAGR of 16.3 percent. Malaysia’s forward momentum was reflected in a growing CAGR of 11.6 percent, sales at $6.1 billion, and 3 percent of global market.

The performance of the remaining Asia-Pacific billion dollar markets were as follows: Australia ($1.2 billion, -3.8 percent CAGR), Indonesia ($1.6 billion, 12.8 percent CAGR), Japan ($15.6 billion, 9 percent of global market, -0.2 percent CAGR), Korea ($17.7 billion, 10 percent of global market, 1.7 percent CAGR), Philippines ($1.5 billion, 8.6 percent CAGR), Taiwan-China ($3.7 billion, 2 percent of global market, -1.3 percent CAGR) and Thailand ($3.0 billion, 0.0 percent CAGR).

European Union

Remaining steady at 21 percent of global share, Europe is the third largest regional direct selling market in the world and continues to grow (1.3 percent CAGR). Overall, European direct selling recovered from a slight downturn in 2018 by posting a 0.8 percent uptick in 2019 and reported $37.9 billion in collective estimated retail sales. $33.8 billion were generated by European Union markets.

Direct sellers numbered over 14 million with 7.0 million residing in the EU. Wellness (32 percent), Cosmetics and Personal Care (25 percent), and Household Goods and Durables (14 percent) rounded out the top three European product sales categories.

The WFDSA Global Research Subcommittee agrees that the governmental halt and 100-day review of the promotion and sales of health products during Q1 of 2019 was the primary cause for China’s sales decline.

Marie Lacroix, executive director, SELDIA-The European Direct Selling Association, says sales in 2019 were driven by strong national markets in Germany and France, but also by smaller markets in the Baltic States of Lithuania, Estonia, and Latvia, as well as Romania. Brexit’s impact has already shown itself through decreases in U.K. sales.

Germany’s $17.5 billion in estimated retails sales ranked fourth overall and was 10 percent of global market. They experienced a 5.0 percent increase in 2019 and a 2.9 percent CAGR. France was the only other billion-dollar European market to show gains in 2019 with sales of $5.2 billion, 3 percent of global market, and a 2.7 percent CAGR. The United Kingdom ($3.2 billion, -4.0 percent CAGR) and Italy ($3 billion, -1.8 percent CAGR) struggled, while Poland ($1.1 billion, 0.2 percent CAGR) remained flat.

“The legislative framework in Europe is the backbone of the region’s continued stability, offering companies and people active in direct selling a clear outlook over the future, as well as maintaining a healthy work environment with an increasing demand for alternative job opportunities such as those in direct selling,” Lacroix says.

Rest of Europe

Just under $4.1 billion in estimated retail sales were generated by “Rest of Europe” in 2019, a drop of 3.9 percent. The market recorded a CAGR of 1.9 percent. Russia’s estimated retail sales of $2.3 billion represented the largest market and generated nearly 56 percent of sales. After 13 percent growth in 2017, Russia’s sales dropped 5 percent in 2018 and 6.2 percent in 2019. This volatility shows in the market’s CAGR, reported at 0.2 percent.

Other developing markets within the Rest of Europe, include Norway, Switzerland, Turkey and Ukraine. All but Switzerland showed losses in 2019.

Independent representative numbers slid slightly to 7.1 million, while data on product category sales was not available. DSN

Can You Afford Not Going International?

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International growth is becoming the key driver of growth for many direct selling companies that have stalled or gone stagnant in the domestic market—international business is increasingly becoming more crucial for survival and growth.

Here are the three How’s and the five questions of How to grow internationally.

HOW SHOULD I GO INTERNATIONAL?

1. Go where your distributors lead you.

According to The World Federation of Direct Selling Associations, 79 percent of global revenue is generated in the top 10 countries (in order): China, United States, Korea, Germany, Japan, Brazil, Mexico, France, Malaysia, Taiwan. Don’t make the mistake of just picking a market because it is big. International success does NOT work like the movie Field of Dreams “If you build it, they will come.” To be successful, you have to have the network—the players on the field must come first.

2. Low initial investment.

Things have drastically changed in the last ten years—it is so much easier to go international! Websites can be quickly tailored to local language, local payment types, local currency and to calculate your international duties and taxes. Every market has personal consumption rules that allow shipments for personal use. Unless you are going to have distributors set up in country stores or hold large inventories, just encourage your distributors to refer their customers to their personal websites. When customers are purchasing from a U.S. entity and the U.S. company complies with the personal import rules, there is no need to register products or set up an entity in the many markets—saving substantial time and money. Companies should consider waiting to go “On the Ground” in the country until they hit a million dollars in sales a month.

3. Do a product regulatory review for the international market(s).

Countries have unique requirements on certain ingredients, potential permits for certain products, and personal import limits. Examples of personal import limits can be 60- or 90-day supply of a given product, a dollar amount value limit on daily shipments and even a dollar amount per month or year. A good strategic shipping partner or licensed broker in a specific shipping market can quickly help you review your products per market and advise you.

“Don’t make the mistake of just picking a market because it is big.”

WHAT QUESTIONS SHOULD BE ASKED?

1. Should we ship DDP (Delivery Duties Paid) or DDU (Delivery Duties Unpaid)?

It may seem to be a simple question, but there are a number of factors. Your product may only clear customs into some markets if it is DDU. In some countries, consumers are very used to paying duties when the product arrives. Still, in others, they are not at all. In many international markets when products are shipped DDU, it is hit and miss on which packages get stopped or not for paying duties and taxes—sometimes 80+ percent go into the market without customers having to pay. Either way, you will want to inform the customer of the duties and taxes—whether included in the check-out price or give them the amount they should anticipate paying upon arrival.

 “International is the key to growth and survival in this new economy—it is easier than it has ever been, but you need to make sure you ask the right questions.
2. How do I pay my distributors in a country?

There are a number of ways to pay distributors in international markets. You will want to find a good partner that understands the direct selling industry that can transfer money directly to your distributor’s bank account or to a personal payment card in the market.

3. How do I accept payments?

You will want to find a credit card processor that will enable you to authorize in local currency. Generally, you will need an international entity to authorize and settle in an international market, but most processors can allow you to authorize in the local currency and then settle back into USD. Consider authorizing in local currency but settling back to USD to start—but you need to make sure you understand not only the interchange fees but the foreign exchange and cross-board fees that will apply to your transactions. You will also want to find a partner that can offer local payment types—credit cards are not very popular or common in some international markets. A good payment processor will be able to tell you what international payment types make sense in each market and have the fraud tools to help you mitigate risk. There are even some solutions now for international distributors to directly take in-person and social media payments from customers leveraging your corporate payment account rates and payment solutions.

4. Should I use an express or economy shipping solution?

This is also a question that may not be as simple as it sounds. Some of your products many not clear customs through an express shipping solution but may clear through an economy solution. There are solutions that range from 1-2 days delivery to international markets to sometimes a month or more. Above 8-10 days seems too long, and there are a number of economy solutions that can hit that window. Generally, an economy shipping solution is less expensive, but not always. Each country and market is different. You will want to make sure you leverage the experience and expertise of a partner that knows what they are doing, and that is experienced with your type of products.

5. How do I minimize my duties and taxes?

Many countries and markets have a tax de minimis. Meaning that if you can keep your shipment below a certain dollar amount, you will pay no duties or taxes—it can be substantial savings to send smaller shipments or to split up your shipments. You will also want an experienced partner to help you with your declared values and harmonization codes (some products may fit into different classifications) as to minimize your tax burden. An experienced partner can also help you with free trade agreements or tax clawbacks.

The bottom line is that international is the key to growth and survival in this new economy—it is easier than it has ever been, but you need to make sure you ask the right questions and have the right expertise to help you. DSN

Michael McClellan leads Global Access’ business development efforts in the direct sales industry providing customized solutions for clients that simplify the complexities cross-border commerce and are easily integrated into direct sellers’ unique selling processes and operations.

DSA Canada Research Reveals Consumers Seeking Additional Earning Opportunities

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Results from consumer research conducted by the Direct Sellers Association (DSA) of Canada show the potential for growth in the “side-hustle” world, particularly for direct sellers. 

A key finding was that, over the next year, almost 4 in 10 Canadians will look to make additional money outside of their direct employment. The research showed that 37 percent of Canadians are seeking extra earning opportunities and that among those aged 18–29, this number jumps to 56 percent. The age-group showing the lowest interest in earning additional income, at 20 percent, were those aged 60 and over.

According to Peter Maddox, president of the DSA Canada, the research reflects the realities caused by the COVID-19 pandemic, as well as general economic uncertainty experienced by many across the country. In particular, from April to June, 32 percent of Canadians reported experiencing a decline in or a total loss of their income.

“The study results are also borne out by a recent rise in sales and enrolments for direct selling businesses,” said Maddox. “For example, DSA Canada member company MONAT saw a 200 percent increase in new independent sales consultant enrolments in the first three months of the pandemic.”

When questioned specifically about direct selling, 22 percent of survey respondents considered it a realistic opportunity for earning additional income. This rose to around a third for respondents under the age of 44. Somewhat unexpectedly, men were slightly more likely to be open to a direct sales opportunity at 24 percent, 3 percent more than for women.

The survey also delved into respondents’ overall impression of the direct selling industry. It was found that 33 percent of the population had a positive impression, 35 percent negative, while 32 percent didn’t know enough to have an impression one way or another. A positive impression was more common among younger age groups and for those with a high school education or less.

The 32 percent of the population who did not have any impression of direct selling might provide an interesting opportunity for the industry and the DSA to create positive awareness. It could be possible to help fill an apparent knowledge vacuum in the community through media outreach, public relations activities and other initiatives.

The survey was conducted with 1,500 Canadian adults from July 13 to 16, 2020, and was completed on behalf of the DSA by Abacus Data.

Nature’s Sunshine Appoints Heidi Wissmiller to Board of Directors

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Nature’s Sunshine Products, Inc. has appointed Heidi Wissmiller to its Board of Directors effective August 1, 2020.

Wissmiller will also serve on the company’s Audit and Risk Management Committees. Nature’s Sunshine’s Board will now consist of nine directors with eight serving as independent directors.

Wissmiller brings over 25 years of senior management experience for notable companies in the consumer products and direct marketing space. She last served in multiple C-suite positions for Rodan + Fields, the leading skincare brand in North America, including chief growth officer and chief operating officer of global field sales and operations. During her leadership at Rodan + Fields, the company reached unprecedented levels of growth with over $1 billion in sales, more than 300,000 consultants and a customer base of approximately 1.8 million.

Prior to Rodan + Fields, Wissmiller was the CEO for Micro Analytical Systems, which developed the world’s first and only real-time, large-scale, proprietary testing technology for seafood safety. She previously served in various senior leadership roles with globally recognized companies, including PepsiCo, E & J Gallo Winery and RJR Nabisco.

“Heidi is a proven executive with a long track record of implementing effective growth strategies for notable consumer product brands,” said Terrence Moorehead, president and CEO of Nature’s Sunshine. “We believe Heidi’s wealth of knowledge in consumer products and digital implementation will be invaluable in assisting our efforts as we continue the transformation of our business. We look forward to her strategic guidance as a member of our board.”

Commenting on her appointment, Wissmiller stated: “Nature’s Sunshine has built a unique platform dedicated to providing consumers the highest-quality nutritional supplements and personal care products. Having successfully created and led growth strategies for multinational companies throughout my career, I plan on leveraging my expertise to collaborate with the board and management team as we continue implementing the company’s five global growth strategies.”

Wissmiller has a Board Readiness Certification from Yale University School of Management and a Finance for Executives Certification from the University of Chicago. She holds a Bachelor of Science degree in communications management from the University of Portland.

Prasad Gankanda Promoted to Young Living EVP of Sales

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Young Living recently announced the promotion of Prasad Gankanda to executive vice president of Global Sales.

“As we lead our company through unprecedented times, Prasad has been instrumental in directing our sales team across the globe through the business challenges that come from a pandemic,” said Jared Turner, president and COO of Young Living. “He is an essential addition to our executive leadership team. He brings tremendous value to Young Living through his entrepreneurial spirit, using his creativity to help push everyone beyond their limits.”

Prasad has over 10 years of experience in directing global business operations. Since joining Young Living in 2015, he has successfully expanded into new markets such as South Korea, South Africa, Brazil, Colombia, Costa Rica and Macau.

Prior to Young Living, Gankanda held senior positions at a direct selling company where he led engineering, manufacturing and supply chain.

“I have always been impressed by the innovative spirit at Young Living and I have big visions for the future,” said Gankanda. “In order to scale our high standards as we continue to build, I look forward to working closely with my teams to do their best work. I am passionate about advocating for our markets and members to make sure they have a voice within the company and that they have the tools they need to be successful. Our members are our number one asset.”

 

Regal Ware Celebrates 75th Anniversary

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Regal Ware will celebrate its 75th anniversary on August 6, 2020.

Founder J.O. Reigle started the company in 1945 out of a desire to build “the finest plant with the finest equipment to produce and sell the world’s finest cooking ware.” As a business owner, salesman, philanthropist and family man, Reigle embodied the self-reliance, core values, innovation and resolve that have become the cornerstone of the company. With both third and fourth generations of the Reigle family—as well as other multi-generational families—working for Regal Ware, he created a legacy of excellence that continues to live on today.

“We have achieved this 75-year milestone through the collaboration, ingenuity and dedication of our employees,” said Regal Ware President & CEO, Jeff Reigle. “We know that it’s not just our passion for our customers that has boosted us to the top; it’s our emphasis on delivering superior quality in everything we do, our pledge to maintain integrity in all business practices, and our dedication to innovation and continuous improvement. It is our exceptionally skilled and talented staff, our commitment to workplace diversity, and our long history of treating everyone with dignity and respect. And it is our connection to our local community, where our employees donate countless hours of service and where we direct much of our financial support. We heartily recognize that the success of our company comes directly from the success of our customers, our business partners and our employees.”

Regal Ware conducts business in more than 45 countries. It is a long-standing member of the Direct Selling Association, the Cookware Manufacturers’ Association and the International Housewares Association.

Sales and Marketing Expert Carolyn Dielmann Connolly New Kannaway Brand Ambassador

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Medical Marijuana, Inc. announced that its subsidiary Kannaway welcomed Carolyn Dielmann Connolly to the company’s team of brand ambassadors.

“Having seen all that Carolyn has accomplished in her previous roles, I am humbled and excited to have her join Kannaway,” said Kannaway CEO Blake Schroeder. “We look forward to working alongside her as she develops her global leadership team at Kannaway and helps us continue to reach new customers.”

Connolly has spent her networking career with a few well-known companies and has built a reputation as a top money earner. In that role, she also became a National Certified Trainer, Core Market Leader and Travel Committee Board Member. She has built, trained and led successful teams across the health and wellness sector of the network marketing industry and developed leaders, systems and step-by-step programs to help others be successful. Previously, she expanded her direct selling skills while working with NuSkin International and serving in various sales and marketing positions throughout her career.

“I have studied the CBD industry closely over the past few years and wanted to get involved because of the immense potential it has both in its ability to help many consumers and as a financial opportunity,” said Connolly. “I am confident in my ability to build a strong and passion-driven team around Kannaway’s strong values and innovative offerings.”

MONAT Global Raises Over $250,000 to Support Veterans

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MONAT Global Corp’s philanthropic movement, MONAT Gratitude, Inc., celebrated veterans and first responders by raising $255,474 through sales of their Grateful Every Day Set.

The company donated 100 percent of every sale from the limited-edition sets to veteran and first responder non-profit organizations in the United States, Canada, the UK, Ireland and Poland.

In a creative social distancing-friendly twist, the check distribution took place virtually via Instagram and Facebook and included members of MONAT leadership as well as representatives from each organization.

“Gratitude is what guides each decision we make at MONAT,” said Lu Urdaneta, chief culture officer, MONAT Global. “The set is about more than self-care, it spreads the MONATitude of Gratitude to all the brave men and women who sacrifice everything to serve their countries and communities. By supporting our first responders and veterans, we are lifting the spirits of them and their families.”

The set featured the fan favorite, More than a Mist fragrant hair and body spray, with a special Gratitude bracelet. Sales from the gift set are donated to organizations that provide necessary services to veterans and first responders that have gone through trauma.

MONAT’s Grateful Every Day Set will benefit the following organizations:

  • The Wounded Warrior Project
  • The 22 Project
  • Operation Gratitude
  • Wounded Warriors, Canada
  • Blind Veterans UK
  • Irish Veterans
  • Stowarzyszenie Rannych in Poland

“Many veterans suffering from post-traumatic stress and traumatic brain injury have significantly improved because of the work we all do,” said Alex Cruz, co-founder, The 22 Project. “Having partners and friends like MONAT and MONAT Gratitude is the reason why so many of our veterans, Special Ops and soldiers have a chance at a better life.”

 

Longaberger Reimagines Social Selling for Millennial Generation

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Longaberger  announced the next chapter for the company with the launch of a new digital social selling business model.

The American home collectibles brand known for artisanal handcrafted products will be offering timeless and new modern décor products.

The Longaberger Company was founded by Dave Longaberger in 1973 and for generations, the family has manufactured handmade maple baskets and various home products that have been collected by a loyal community of customers. In 2019, Xcel Brands (Nasdaq: XELB) acquired The Longaberger Company.

With a digital-first approach, Xcel Brands has transformed Longaberger’s traditional multi-level platform into a state-of-the-art peer-to-peer social commerce community with expanded home and lifestyle categories. Each Home & Life Stylist is now provided with a personalized digital storefront, which is enabled with advanced SMART web technology in the form of a personalized marketplace customized with a secure and quick connection to their social media networks. For an annual fee of $49, the program offers 20 percent marketing compensation for all sales, 20 percent discount on self-purchases, and 5 percent override on the sales of new Home & Life Stylists recruited to join their team.

“Transforming the heritage of the Longaberger brand into a digital-first company for our engaged community was our top priority,” said Robert W. D’Loren, Xcel’s chairman and chief executive officer. “We aim to build upon the rich history coupled with our new digital social selling business model to become the world’s largest, and most engaged, social commerce community.”

Longaberger supports and empowers artisans across the United States and around the world by curating a selection of products that are hand-made, hand-crafted and hand-selected. Current categories offered include baskets, cookware, tabletop, drinkware, serve ware, storage, décor, ceramics, linens, furniture and gourmet foods. Longaberger will be entering new categories, including new launches and artisan partnerships in pottery, wine, jewelry, apparel, home fragrance, essential oils, skin wellness and more.