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Corporate Strategies in Direct Selling 2011

May 2012

Coty’s offer to acquire Avon has rekindled interest in direct selling as a distribution channel raising questions about its profitability and prospects. Euromonitor International has examined the channel through a series of case studies of the leading direct sellers’ strategies, focusing on emerging market penetration, flexible approach and product and sales model innovation.

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What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

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
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