Oriflame CEO Talks Potential Expansion into U.S., Brazil

Expansion into the United States and Brazil could come in the not-too-distant future for Oriflame, the Swedish cosmetics maker that currently counts Russia as its largest market.

The Swiss company’s CEO, Magnus Brannstrom, who will keynote the DSN Global 100 Celebration in April, told Reuters that Oriflame is looking to enter the two major markets within a few years. In 2014, Brazil was the fifth-largest market for direct sales, according to the latest data from the World Federation of Direct Selling Associations. The market accounted for 7 percent of global revenue, trailing only the U.S. and Asia-Pacific powerhouses China, Japan and Korea.

The focus on new markets comes as Oriflame seeks to recover from turmoil in Russia and Ukraine, another key market. Brannstrom said he is “cautiously optimistic” about 2016, after the company’s mid-February report that local currency sales in the first quarter were up 9 percent from a year earlier. Management last month released fourth-quarter profits that beat expectations and discussed bringing back a dividend in the fourth quarter, after cutting the payout for the past two years.

As the company eyes the U.S. and Brazil, emerging markets will continue to drive growth in the long term, with China or India likely surpassing Russia as Oriflame’s biggest market, said Brannstrom. Turkey and Mexico also are top markets for the company, which sells its beauty products through more than 3 million Consultants worldwide.

Elken Gears Up for Opening of Philippines Market

Photo: Manila, Philippines.


Leading Malaysian direct selling company Elken is tapping into growth in the Asia Pacific region with its forthcoming entry into the Philippines.

The company coordinated a soft launch in the Philippines in December 2015, hosting public events to introduce its business model and extensive range of products, which number more than 500 across the categories of cosmetics, personal care, wellness, food and beverage, and home care. An organic spirulina supplement and water purification system are among the company’s top-selling products.

The Philippines is one of the fastest-growing direct selling markets in the world, according to research by the World Federation of Direct Selling Associations. From 2011 to 2014, constant dollar revenue from direct sales increased at a compound annual growth rate (CAGR) of 17.6 percent, outpaced only by growth in China and Vietnam.

With the official opening of the Philippines, Elken’s operations will extend to 11 markets, including Malaysia, Singapore, Indonesia, Thailand, Brunei, Hong Kong, India, Vietnam, Cambodia and Taiwan. The company, which has been in business for 20 years, has offices in 30 cities. Elken reported revenue of $233 million in 2013, earning the No. 50 spot on the 2014 DSN Global 100, before declining to participate in the 2015 ranking.

LifeVantage Slated to Enter Europe in Early 2016

LifeVantage is setting its sights on the European Union, with plans to open its first markets in the region early next year. Initially, the company will offer its wellness, skincare and pet care products in the United Kingdom and the Netherlands, LifeVantage said Wednesday.

“The United Kingdom represents one of the fastest growing markets within direct selling, and their distributors are product-oriented business builders who leverage technology to drive their organizations,” CEO Darren Jensen said in a statement. “The Netherlands represents nearly $150 million in retail sales with more than 48,000 distributors in the country.”

As a whole, the EU accounted for nearly $33 billion in retail sales last year, according to industry research by the World Federation of Direct Selling Associations (WFDSA). LifeVantage plans to leverage its business in the U.K. and the Netherlands as a gateway to additional EU countries, with the Netherlands serving as its logistics hub in the region. The company will begin holding business meetings in the two markets in February 2016.

Utah-based LifeVantage currently operates across North America and Mexico, as well as select markets in the Asia Pacific region, including Australia, Japan, Hong Kong, Thailand and the Philippines. The company generated revenue of $208 million in 2014, placing it at No. 67 on this year’s DSN Global 100 ranking.

Direct Selling’s Strength in the World’s Billion Dollar Markets

by Andrea Tortora

Direct selling continues to gain ground worldwide, with global retail sales and the total salesforce both reaching record highs in 2014.

The World Federation of Direct Selling Associations (WFDSA) estimates that retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013, with all regions and three-quarters of direct selling countries posting gains. The total salesforce grew by 3.4 percent in 2014 to 99.7 million people, up from 96.5 million in 2013. All of which lights the stage for coming geographic shifts in market dominance.

“The most recent figures highlight the increasing opportunities that direct selling offers,” says WFDSA Chairman Doug DeVos. “Customers seek personalized service and quality products, and direct sellers are able to meet those needs in a way that is convenient and enjoyable. At the same time, people who aspire to earn a little extra or launch a full-time business venture are drawn to direct selling due to its flexibility and pay-for-performance structure.  It’s exciting to see more people, both customers and distributors, enjoying the benefits of direct selling.”

As part of WFDSA’s annual global statistics gathering, data is collected in local currency figures, which are then converted to U.S. dollars using 2014 exchange rates for all years. When comparisons are made to determine year-over-year change, this practice eliminates the impact of currency fluctuation, explains Judy Jones, Market Research Insights Leader at Amway and Chair of the WFDSA Global Research Committee. The 2015 report comes with an expiration date of May 2016, when the next year’s data will be published. For some markets, sales are estimated until the respective country reports its official figures to the WFDSA. At that time, actual data is restated and accounted for the next year.

These most recent figures confirm direct selling’s strength and its ability to keep reaching more people—as sellers and consumers—in all corners of the globe. The industry’s 6.5 percent three-year compound annual growth rate (CAGR) from 2011 to 2014 is evidence of that power.

The Top 5 countries account for 61 percent of all global sales. All but one report a positive CAGR (2011-2014):

  1. United States, 4.9 percent
  2. China, 18.7 percent
  3. Japan, -2.3 percent
  4. Korea, 8.1 percent
  5. Brazil, 6.7 percent

In all, 23 countries posted retail sales from direct selling of $1 billion or more in 2014. That group accounts for 93 percent of global sales from direct selling.

Leading the pack of the Top 5 countries once again is the United States, where the 2014 sales of $34.5 billion set a record and grew by 5.5 percent from the prior year. The U.S. CAGR for 2011 to 2014 is 4.9 percent. There are 18.2 million people who distribute products, up 8.3 percent from 2013. Nearly 75 percent are women, which means 14 million females are building their own businesses.


Overall estimated retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013.


Companies that are members of the U.S. Direct Selling Association (U.S. DSA) employ 55,300 people who are highly trained experts in their field. For example: 3,000 employees are science professionals, including chemists, biologists and engineers.

“Robust salesforce and revenue figures only tell part of the story behind direct selling’s success in the United States and around the world,” says Joseph N. Mariano, President of the U.S. DSA. “Our channel also provides …

Click here to read the full article in Direct Selling News.

2015 DSN North America 50 List


The DSN North America 50DSN Announces the 2015 North America 50!

This marks the sixth year for the Global 100 list of top direct selling companies in the world, and we would not be Direct Selling News if we did not continually strive to raise the bar.

That is why we are pleased to share with you a new component of the project this year: The North America 50. As a subset of the Global 100, this list draws attention to the most significant players in one of the world’s largest direct selling markets.

As DSN embarks on the annual research for the Global 100, we continue to refine the process as we identify the largest companies and acknowledge their achievements while bringing attention to the magnitude of the direct selling industry as a whole. Within that context, the impact that North American companies have on the global marketplace as well as on those that buy and sell through this channel cannot be overstated.

The following contains the North America 50 ranking for the 2015 DSN Global 100 (based on 2014 revenues). Both lists will be published in the June issue of Direct Selling News.


2015 Rank

Company Name

2014 Revenue

1 Amway $10.80B
2 Avon $8.9B
3 Herbalife $5.0B
4 Mary Kay $4.0B
5 Tupperware $2.60B
6 Nu Skin $2.57B
7 Ambit Energy $1.50B
8 Primerica $1.34B
9 Stream Energy $918M
10 Shaklee $844M

Click here to see the rest of the DSN North America 50 List.

Are We Winning?

by John Fleming

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.


It’s hard to keep a scorecard on the direct selling industry! Those who tend to look for a way to criticize can always find something. Those of us who see within the industry and have the opportunity to interact with industry decision makers gain much insight and perspective. And this is a time of year to reflect. The corporate scorecard will be the year-end financial statements that will recap the business of the previous year. Businesses will win or lose depending upon the bottom-line numbers of profit or loss and the top-line number of revenue generated in comparison to the prior measurement period. But the question for those of us affiliated with the direct selling industry might be: What is the industry scorecard? Are we winning or are we losing?

Some scorekeepers like Bill Ackman, the hedge fund manager who has specifically targeted Herbalife with venomous attacks on the company’s method of conducting business (direct sales), completes his scorecard based on a set of very personal criteria that leads to an accusation and attack on, in this case, Herbalife in particular. However, this type of scorecard has implications for the entire industry. Direct selling, as a channel of distribution, is executed in many different ways, from what we often refer to as party plan to network marketing, social entrepreneurship, social selling, and social commerce, or even simply person to person. Today, the actual definition of direct selling is so very broad that direct sellers utilize online methods for delivering messages and transacting business as effectively as any channel of distribution.

In response to a scorekeeper like Bill Ackman and his staff, we remind such scorekeepers of the fact that the industry has a formal code of ethics as well as an informal code of ethics. The industry code and the more stringent company codes of ethics serve to govern the manner in which those who utilize the direct selling channel engage both employees of the company and the independent brand partners representing the company’s products, services and business opportunity. Independent contractors are also consumers as it simply makes sense to be your own best customer.


Today, the actual definition of direct selling is so very broad that direct sellers utilize online methods for delivering messages and transacting business as effectively as any channel of distribution.


The formal Code of Ethics is provided by the U.S. Direct Selling Association, and this code is public information. Members of the U.S. DSA pledge to abide by the U.S. DSA Code of Ethics. Many non-members of the U.S. DSA (direct selling companies) have created their own company codes and often use the DSA Code of Ethics as their benchmark. In either case, the direct selling industry overall has done a good job of policing itself and has grown as a channel of distribution to over $30 billion in U.S. revenue and $150 billion in worldwide revenue, generated by approximately 16 million U.S. independent contractors and 90 million worldwide independent contractors.

Every organization and every business has some type of scorecard for reflection on previous-year results and the planning of the new year. It is part of our nature to desire a scorecard to determine if we are winning or losing. Each winter, the NFL hosts the ultimate scorecard in professional football, the Super Bowl, where thousands will witness the final score that determines the best football team of the year. The same process holds true for all professional sports teams and leagues wherever they are located in the world. Hundreds of millions watch these events on television.

Direct Selling News created a scorecard for the direct selling industry when we first published the Direct Selling News Global 100 listing in 2009. Each year, this enormous research project serves to identify the top 100 direct selling companies in the world who certify their revenue performance by submitting the DSN Revenue Certification Form and complete a profile of their company. This process results in the publishing of perhaps the most important scorecard on the industry issued by anyone.

However, there is more to score on a company-by-company basis, and we offer on this page a potential scorecard profile that we believe tells even more of the story about an industry that shows such diversity in its representation of people from all walks of life. Direct selling as a method of distribution provides people with hope and with training to learn the basic knowledge and skills to be able to build a business. This could be a small part-time effort or a more serious effort that not only develops customers but also provides the opportunity to recruit and train others to do this, resulting in a much larger business opportunity. Because a scorecard is so important, we encourage each direct selling company to submit your Global 100 information and profile, as in so doing you participate in a valid process for scoring an incredible industry.

In going through the scoring process, we remain optimistic that we will have experienced another year of overall growth with respect to the first two categories on the scorecard pictured. Within the growth, there will always be those companies that did not grow, and the reasons for that are many, some of which are mentioned below and are also being researched by Direct Selling News.

Continue to Direct Selling News to see the scorecard and find out if we are winning or not.

 

 

UK-based Kleeneze to Join CVSL’s Family of Companies

CVSL Inc. is adding another direct seller to its line-up of brands. The Dallas-based company has signed an agreement to purchase health and household company Kleeneze from Findel PLC of the United Kingdom for $5.5 million.

Upon completion of the acquisition, CVSL will own one of the U.K.’s longest-operating and best-known direct selling businesses, which is also a founding member of the U.K. Direct Selling Association. Established in 1923, Kleeneze originally sold products through catalog, and now it offers household cleaning, health and beauty, home, and outdoor products through a network of more than 7,000 independent representatives in the U.K. and Ireland.

“Kleeneze has an extensive product line, a nearly century-long heritage, a well-known brand and a robust presence throughout the U.K. We believe Kleeneze will be an outstanding addition to our CVSL family of companies,” said John Rochon Jr., CVSL’s Vice Chairman and head of its investment committee. “Kleeneze gives CVSL a very significant presence in the U.K. and represents an important step forward in CVSL’s international expansion.”

By joining the CVSL family of companies, Kleeneze will retain its own separate brand identity, salesforce and compensation plan but operate under the support of a growing portfolio of companies that include The Longaberger Company, Your Inspiration At Home, Agel Enterprises and Uppercase Living.

“Becoming part of the CVSL family of companies will open an important and exciting new chapter in the long, distinguished history of Kleeneze,” said Lisa Burke, Managing Director of Kleeneze. “This will allow us to be part of a global, public company, while at the same time maintaining our own unique identity. We view this as the best of all worlds.”

Closing of the agreement is anticipated by the end of First Quarter 2015.

Amway Plucks Asia Pacific CMO to Head up Global Marketing

Amway has selected one of its Asia Pacific executives to serve as the brand’s new Chief Marketing Officer. South Korea native Su Jung (SJ) Bae is transitioning from the role of Asia Pacific CMO to oversee Amway’s global brand, corporate social responsibility and public relations efforts. Former CMO Candace Matthews vacated the position to serve as Amway’s Regional President for the Americas.

Bae’s Amway career began in Korea, where a recent independent survey found that 58 percent of households own at least one Amway product. She came on board at Amway Korea in 1995 to market the company’s Nutrilite supplements.

As Asia Pacific CMO, Bae led the Artistry brand sponsorship of the Busan International Film Festival and helped establish Amway’s Asia Beauty Innovation Center. Her team also worked with local companies to launch new technologies and product ideas across Amway’s global networks. Amway has built a strong presence in the Asia Pacific region, where direct selling is experiencing rapid growth. China, Japan and Korea trailed only the U.S. in 2013 retail sales, according to a World Federation of Direct Selling Associations report.

Heading up Amway’s global marketing efforts, Bae will oversee strategy and execution of category marketing for the company’s nutrition, beauty and home brands. In a statement on Amway’s blog, she expressed her intent to create “an environment where global marketing teams embrace the creative friction and trial and error needed for true innovation.”

In other company news, Amway announced Wednesday that 2014 sales dipped to $10.8 billion, down 8 percent from the company’s record in 2013. Though it does not release sales figures by country, Amway cited foreign currency fluctuations and lower revenue in China. The company noted strong growth in neighboring South Korea and Taiwan, as well as several of its South American markets.

“Looking ahead to 2015 and beyond, we are optimistic and feel we are well positioned for growth,” Amway President Doug DeVos shared in a statement. “We will be opening five new manufacturing facilities and many new Amway Experience Centers to support our ABOs, and improving virtual experiences online. Additionally, attitudes toward, and interest in, entrepreneurship remain at all-time highs.”

Note from the General Manager, December 2014

by Lauren Lawley Head

Click here to order the December 2014 issue in which this article appeared or click here to download it to your mobile device.


2014: A Year of Growth

LaurenI’m writing this letter from my hotel room in marvelous Rio De Janeiro, home to the 2014 World Congress of the World Federation of Direct Selling Associations. The event has brought together approximately 400 people from companies based around the world, all united for one purpose: supporting the direct selling path of entrepreneurship and the opportunity it presents to people from all walks of life. It also serves as time to reflect on the state of our community today: the challenges we face, the lessons we’ve learned and the opportunities ahead.

There’s no question that direct selling is enjoying a period of growth. Direct selling companies generated combined revenue of $180 billion worldwide in 2013, with the World Congress host country alone reporting 7.2 percent growth. As writer Judith Emmert explores in our cover story, beginning on page 16, more than a dozen U.S. companies have surpassed $500 million in annual revenue this year and are continuing to climb toward the $1 billion peak. During the reporting for the cover story, USANA President Kevin Guest told us, “As we knock on the door of $1 billion, most of our challenges have related to becoming a $1 billion organization before we actually hit that level of sales. This means that we need to think, act and behave like a $1 billion organization before we can become one.”

Here at Direct Selling News, 2014 included a number of significant initiatives designed to support growth throughout direct selling. First and foremost was our groundbreaking survey work conducted with the team at Harris Poll. We began the relationship by commissioning Harris Poll to conduct a survey in the spring answering the question: How prevalent are direct selling products in the United States. (The answer: Very! Two-thirds (66 percent) of adults—an estimated 156 million people—have ever made a purchase from a direct seller. One-third (34 percent) have done so in the past six months.) In late August, we went back to the field with a more in-depth study examining both direct selling consumers and distributors, and we look forward to continuing to bring you more in-depth analysis from this exclusive research. During the year, we also published a special insert in The Wall Street Journal, crafted to communicate the positive attributes and dynamic nature of direct selling with the Journal’s high-level audience, and a special edition during the U.S. Direct Selling Association’s Annual Meeting, highlighting the event’s content and awards.

It was my privilege to join the Direct Selling News team in February, and I look forward to continuing to expand our work as we head into 2015. I could not have asked for a more gracious welcome and am particularly thankful for the continued support and guidance of Publisher and Editor in Chief John Fleming. The stories of companies dedicated to serving as beacons of hope and opportunity through direct selling throughout the world are captivating.

Until next time, I wish you and your teams a holiday season filled with joy.

All the best,

Lauren Lawley Head
General Manager