Oriflame to focus on wellness sets best growth rate this fiscal

Admin   |   25 April, 2015   |   728   |   3980

MUMBAI: Swedish direct sales player Oriflame has set "the highest growth projection" for India with a focus on wellness, even as the direct marketing sector in the country is having a tough time following a string of high profile arrests of market leaders over the past few years.

"India is among the highest growth markets for us," Oriflame's global vice-president for product marketing Mimmi Frolen told PTI here today in an interview.

Without disclosing the revenue figures, she said India is among its top ten markets in terms of sales.

In February, Oriflame had launched its wellness range of products in the country, almost a decade after it was introduced globally.

"We have developed very specific products for this market, including natural balance shakes, multivitamins, Omega-3 tablets, all of which are vegetarian," said Prachi Mohapatra, category manager for South Asia.

Going forward, Oriflame is also looking at launching soups and other nutritional-based drinks, she added.

"We are looking at strong sales in FY16 on the back of demand growth for our newly-launched products," she said.

Oriflame, which operates in 60 countries, is listed on the Nasdaq, and had reported a global revenue of USD 1.95 billion in 2013.

While the company does not have any distribution tie-ups to sell products on e-commerce platforms, sales through its own online website has increased, Mohapatra said without disclosing the details.

A recent KPMG report on direct selling pegged the industry at Rs 7,200 crore with a total 6 million direct sellers, out of which a full 40 per cent are women.

Direct sellers such as Oriflame, market leader Amway, and Tupperware entered the country in the 1990s and peaked with a growth rate of 27 percent in 2010-11. However, in 2013-14, the growth plummeted to 4.3 percent.

Frolen described the continuing de-growth as "pass off a phase and is hoping for better growth," though direct selling has seen a downturn globally in the past five years.

In the domestic market, direct selling is currently regulated by the Prize Chits and Money Circulation Schemes Act, where lately several schemes have come under the government scanner with its executives getting arrested for frauds.

Last year, William Pickney, the head of Amway was arrested by the Kerala Police as well as the Andhra Police citing violation of laws.

The industry that employs over six million people, is facing the heat, and has been lobbying for separate regulation but without any result so far. Many states have banned direct selling in their jurisdiction.