Corporate Strategies in Direct Selling 2011

Introduction

Scope

Key findings

Top direct selling companies in 2011

Global Performance

Economic recovery stumbles

Latin America powers growth in direct selling

Distribution patterns vary greatly

Geographic market highly concentrated

Emerging markets offer huge potential

Long-term growth in direct selling to slow

BPC dominates consumer spend in direct selling

Telecoms/internet improvements help sales development

Competitive Landscape

Sales growth slips in 2011

BPC operators dominate global direct selling

Limited competitive space

Strength in limited number of markets underpins global share

Latin America dynamic and increasingly concentrated

The US: The largest market – may hold opportunities

Strength in developing markets a clear competitive advantage

Differentiation a key tool in crowded BPC and CH markets

Beauty dominates top 10 direct sellers

Key challenges in developing markets

Emergin g Market Strategies

Top-line strategies by companies

Emerging Market Strategies

Direct sellers’ core competitive objectives

Case study 1: New sales models for new markets

DMO model widens consumer base

Looking to ease access for distributors

Support with high levels of promotion

Club model limits scope of portfolio

Case study 2: Narrowness not necessarily a problem

Brazil conditions perfect for direct selling

Breaking out of Brazil proves hard

Growing presence with social media

Case study 3: Scale begets sales

Brand recognition a key recruitment tool

Avon’s global direct selling presence

Scale may be causing problems

Can Avon and Coty be together?

Case study 4: Direct sales can support premium products

Premium positioning based on quasi-pharmaceutical image

Emerging markets start to respond to premium position

Nu Skin looks to growing consumer power in China

AgeLOC brand extends from beauty to health

Technology the justification for pricing

Case study 5: Broad offer to supply whole household demand

Amway operates in a wide range of categories

Holistic approach to the consumer

Market segmentation reflected in product development

Amway pushes for India

Conclusion

Beauty still the prime opportunity for direct sellers

Recommendations

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