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Direct Selling in Russia

Russia direct selling market: Avon and Oriflame the leading players during 2012


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2014-02-14 03:54:04 - Direct Selling in Russia - a new market research report on companiesandmarkets.com

Direct selling was consolidated in Russia. Two leading companies, Avon and Oriflame, had a combined 43% share of all direct sales in 2012 at 23% and 19% respectively. However, their market shares declined slightly. In 2011 the two main leaders held 45% of the market value, while in 2010 it was 49%. Being famous and offering stable production over the last decade Avon and Oriflame started to lose shares to modern and innovative brands, as well as pharmacy cosmetics. Both companies were also faced with a decreased number of distributors (agents who sell its production) due to continuing penetration of retail spaces over the country and increased salaries in retail stores. To attract a motivated agent with high loyalty to

 

 

the product is getting more difficult in beauty direct sales segment compared to previous years.

Direct sales became more attractive to the Russian customer in 2012. Main reasons for positive feedback were lower prices of a product compared to the product on the shelves, wide range and more information about direct sales from reliable sources (TV, ad campaigns with celebrities, positive reviews on specialised forums, etc). There was reduced negative perception about direct sales channel among customers in 2012 according to research by the Russian Association of Direct Sales (www.rdsa.ru). However, consumers still reported problems including the over-insistence of the salesperson and ineffective products.

One of the most visible tendencies for the forecast period will be increased loyalty to direct selling among the rural population. 15% growth of direct selling in small cities and villages was observed in 2012 compared to the previous year according to RSDA. This means that Russian direct selling started to shift from its original development path when the channel was mostly popular in large cities. From 2012, Russian direct selling market will get closer to the European market. In rural territories the penetration of distributive network and presence of large retailers is poorer compared to large cities. High credibility of direct selling representatives (salespersons) as all village people are neighbours and know each other will help to promote direct sales in this area.

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