Barely two decades old in India,Direct Selling is a space which has seen some companies taste success and others failure. So what’s the success mantra especially when you don’t use the biggest medium, Television? Sharmili Rajput, Marketing Director, Oriflame India, tells us it’s a combination of personalized care and keeping the customers engaged.
Q] Oriflame has been in India since 1995. How has the journey been for the brand so far, and how has the direct selling space evolved during this time frame?
In India, Oriflame has grown at a rapid pace and today, we’re in the top 10 markets in the brand’s international portfolio. The Direct Selling market in India is estimated to be around ` 7,300 crore and is expected to grow around 20% annually. However, compared to developed countries direct selling in India is still ranked very low, in terms of percentage of population that is employed in this industry.
Q] How are you using the digital platform to combat your competition?
We have a workforce of over 200,000 consultants in our network and the challenge is to figure out how to connect with them. Social Media has presented a fantastic opportunity to be in touch with this entire work force in a very engaging manner. It’s not just targeted to our consultants who sell our products but also the end consumer. The engagement levels are quite high on our Social Media page — we provide news, internal campaigns, details about product launches and run contests. In terms of improvement, we haven’t been using it to build business, but we should hopefully be able to do that in the future.
Q] What does your current marketing mix look like? Are you planning to up your ad spends in the coming year?
We are almost doubling our spends every year, while trying to increase the brand’s presence. Besides Social Media, we are present in all leading print magazines targeted towards women and hoardings, and have just initiated metro advertising. We spend a lot on BTL activities and events as well. A significant amount of investment is made on training our consultants. Q] Some Direct Selling companies have recently starting advertising on Television. Are you looking at this space? Yes, we’d definitely like to explore this space when the time is right. We will also venture into this space.
Q] Your products are available at limited touchpoints, mostly through consultants. How do you overcome the distribution challenges?
Our products are available with our consultant base; so obviously we are comparatively smaller than the FMCG segment. However, we are not targeting the rural segment, and in the urban centres, we are trying to expand our reach and our consultant base. So we have a long way to go; there is a big opportunity and an untapped segment of people who can sell our product.
Q] Your competition could be seen as the big FMCG companies, who are big advertisers, present at various touch-points. In this situation, how do you create mass awareness?
We advertise in Print, because we feel that we are able to reach our target audience effectively by doing so. Our consultants are our brand ambassadors — it’s because of their personalized selling that our products are selling well. We deliver what we promise and our strong product proposition at every price-point is our key strength.
Q] Which markets are the biggest revenue drivers for Oriflame India? Which are the markets you are looking to be the future growth drivers?
We are very strong in the East and North East, followed by North, West and South. We still have a long way to grow in the metros and cities, the strength of the business and the growth will come from these markets. The growth in Tier II and Tier III cities will be extremely high, but the bases will remain small.
Q] Another strategy you have adopted is segmentation with both product and price. How has that helped you?
It has helped us reach out to a whole spectrum of consumers. We have high-end products as well as a basic essential range for everyday use. The consultant is, thus, able to offer our wide portfolio of products depending on the consumer’s pocket, which helps them sell the products with ease.
Q] Inflation and subsequently margin pressure is a big challenge for companies today. Does this affect your price point? If so, how do you remain profitable?
We are going through a lot of challenges on this front and are trying to make ourselves much more effective in the way we manufacture and buy our end products. Because there is pressure, we try to limit our price increases to single digits and not double digits every year.
Q] What’s been your growth YoY? How do you see your growth projection?
We are growing between 20 to 30%, a rate we hope to continue for the next five years.
Q] What are the challenges that Oriflame faces in the Indian market?
The challenge is the lack of regulatory framework, which the government does not have at the moment. There are many misconceptions about the Direct Selling industry and a clear guideline will help the industry. From a marketing perspective, for an FMCG company the call-toaction post a campaign is simple as you see a product, remember it and then pick it up from a retail store. It’s different in Direct Selling as you have to find an Oriflame consultant to buy a product. That is the primary challenge for the marketer in advertising.
Q] You have five product categories. From which category are you expecting the maximum traction? Going ahead, which category are you looking at for further growth?
Skin care and colour cosmetics are the most important segments for us. Skincare is the highest contributor as we are innovators. Our R&D specializes in making products, and that’s what rakes in loyal customers as women tend to stick to products that work for them. In the colour segment, people flirt with different brands. Looking ahead, these segments will continue to be the major contributors and we will have foothold in other segments as well.
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