18. Oriflame
Sweden
www.oriflame.com

Beauty Sales:

$2 billion

Key Personnel:

Magnus Brännström, chief executive officer and president; Gabriel Bennet, chief financial officer; Joakim Banestig, senior director investor relations.

Major Products/Brands:


Oriflame is taking Eastern Europe—and other regions—by storm.
Color cosmetics, skin care, personal care, hair care, fragrance, wellness supplements, under brands including Tender Care, Essentials, Pure Skin, North For Men, Dare to Be, Discover Bath & Shower, Feet Up and Optimals.

New Products:

Glacier Ice fragrance, Hair X, Triple Core Lipstick, Very Me Makeup, Perfect Body Visible Re-Contouring Serum, Voyager Eau de Toilette, Endless Mascara, 2FX Mascara, Midnight Pearl for women, Flamboyant for men, Bioclinic Lifting Super Rich Repair Night.

Comments:

Direct seller Oriflame, which is a strong contender in more than 60 countries, says despite economic difficulties, it managed to increase shares in key markets. Sales increased by 15% to $2 billion in 2010.

The company claims that the direct sales channel harnesses more than a fifth of the total cosmetics and toiletry market in Eastern Europe, which is backed up by Oriflame’s sales figures. By region, sales were highest in CIS and Baltics ($1.1 billion, +19%); EMEA ($540,000, +3%); Asia ($190,000, +27%); and Latin America ($111,000, +35%).

For Oriflame as for others in our Top 20, 2010 proved to be a more difficult year than expected. The Swedish direct seller witnessed a slower economic recovery than it had planned for, especially in southern Europe. In Russia and Indonesia, new product registration laws contributed to a short-term setback, and the company exited Iran after local authorities shut down its operations there. By addressing these issues and focusing on its sales consultants, conditions improved in the second half of the year.

Oriflame strives for constant freshness and innovation in its offerings: Customers are offered more than 900 cosmetic products, more than a third of which were launched during the past year. A new Oriflame catalog is distributed every three to four weeks and each edition is published in four regional versions in 40 different languages.

During the year, Oriflame launched a new instantly popular concept called Dare to Be, targeting a younger audience with fun new products and the latest beauty trends.

In general, the Skin Care category, which accounted for 22% of total sales in 2010, proved challenging with consumers who switched their preferences toward lower and mid-priced brands. Hand cream launches proved highly successful, as did lower priced brands.

The Personal and Hair Care category accounted for 20% of Oriflame’s total sales in 2010. There was unprecedented success of Feminelle intimate care products. Discover Bath & Shower brand is also one of the bestsellers in the category, as is Nature Bath & Shower. The relaunch of Hair X strengthened Oriflame’s position in the hair care segment. The 2010 relaunch of Foot Care under the new brand name Feet Up also gave the company a leg up.

Color Cosmetics perked up in the second half and rallied with double-digit growth. The category represented 24% of sales during the year, driven by Triple Core Lipstick with a breakthrough technology exclusive to Oriflame. Very Me, targeted toward a youthful audience, and Pure Colour, an entry-level range of products, were also big hits.

The Fragrance category produced 21% of total sales, recorded strong sales growth in both men’s and women’s, and remains the fastest growing category within Oriflame. Celebrity endorsements played a large role as local stars signed on—for example, as with the fragrance Glacier Ice, promoted by the Russian figure skating star Evgeni Plushenko.

In 2011, Oriflame became the sponsor of the Women’s Tennis Association.

The company continues to have its eye on India, with plans to launch about 350 products there this year and to double the number of service centers it operates in the country to over 500. More than 270 Oriflame products were launched in India last year.

One of the company’s newest—and most talked about—launches is its Perfect Body Visible Re-Contouring Serum—its first slimming solution which it says is clinically proven to reduce cellulite and slim thighs by up to 2.2cm within four weeks.

Looking ahead to 2011, Oriflame expects operating margins to improve compared with 2010, while sales growth expected to reach 5–10% in local currency.

This fall, Oriflame introduced Studio Artist, its new range of professional makeup featuring Swedish-born Hollywood actress Malin Åkerman as the spokeswoman.

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