How corporate-entrepreneur partnership is helping both flourish – The Oriflame Story
The first story in this series was about Fevicryl and how they are helping people get self-employed. This time around we take you behind the scenes of Swedish cosmetic brand Oriflame. The cosmetic major works with a large group of part time entrepreneurs to better its business, as well as improve the prospects of people related to the company. Here’s how.
The India story
Oriflame entered India 15 years ago when the direct selling space in India was almost non-existent. This was the time when salesman would go door-to-door ringing bells trying to sell you washing machine to malt drinks. But today the direct selling industry in India, according to IDSA(Indian Direct Selling Association) is worth Rs 63,851 million and is expected to touch Rs 340,000 million by 2020. Oriflame with its beauty products portfolio is well poised to be a front runner in this segment.
The company has a direct selling workforce of about 300,000 made up mostly of women “consultants” as they call them. Coming from middle income families, mostly from Sec B or Sec B- demographics, these consultants are the stars for the company. India is presently among the Top 10 contributing markets for Oriflame globally and is among the Top 5 growth driver. Where traditional FMCG market is moving at a snail’s pace, the direct selling business is growing a whopping 20% as per IDSA. “The growth of business is a result of many factors coming together. One, we have a very wide portfolio of products which works, direct selling industry is very under penetrated in India. Colour and fragrances segment is growing well. And Indian women who work with us like the idea of being independent as well as having flexible work hours at work. We have products across a wide range of pricing, and that helps tap customers having different needs,” explains Sharmili Rajput, marketing director, Oriflame India.
Metros and big cities continue to be the big growth drivers for the Oriflame business in India. And within the country the North East market is the fastest growing for them. “If other cities have a spending power of 10, then it reduces to power of 1 in the north-east market. But women there are quite fashion conscious, and you will be amazed to see the brands that they sport there. They don’t mind spending money on their upkeep,” says Sharmili.
Supporting entrepreneurship in India
“The whole process starts with being interested in trying the product, then telling their friends about it and then they see it as a business preposition,” says Sharmili about how the ‘consultants’ join the Oriflame network. People who join are in turn encouraged to hire more people into their network – as bigger the network and more the sales, the more the consultant stands to be benefitted. “The sale generated from the network comes back to consultant. As an immediate profit the consultant makes upto 20% profit on sales, then there are rewards like foreign trips or cars handed out to star performers,” says Sharmili. For the women who become consultants the experience to travel abroad or winning a car for their efforts is life changing – and Oriflame believes in doing such rewards program in style and in a way that is very memorable.
Continual training is provided to consultants about products, soft skills and to handle objections. This is done on a monthly basis, and is spearheaded by an internal team from within Oriflame called the employed sales management team. This 50-member team is responsible for periodic information dissemination among the network of consultants. Every group is assigned an area manager who’s performance is measured on the performance of the consultants who work under him. “The depth and width of your network also determines the remuneration you make from the company. If you are not proactive in sharing knowledge, then people under you may loose interest and wither away,” explains Sharmili.
Besides investing heavily in training consultants, Oriflame also supports them through advertising. Print, radio and outdoor advertising is the preferred mode for spreading the message. The biggest show however is organized when the company rewards super achievers. “Motivation plays a very important role in our business. Because if you fall yourself, your income will fall. Therefore every time someone climbs up a notch in the ladder he is recognized in a very very big way, something like the Oscars. We have very large scale events, and organize “take your breath away” kind of recognition functions,” shares Sharmili. From earning 6% on sales to all the way upto Rs 51,00,000 annual income is the range of financial rewards that Oriflame has to offer the entrepreneurs.
And it all boils down to…do you have it in you?