Although some direct selling categories were negatively affected by the pandemic in 2020, including beauty and personal care, which traditionally benefits from the interaction between customer and sales consultant, the overall channel witnessed strong current value growth, with a further positive performance in 2021. Direct selling therefore outperformed what was originally anticipated, given the circumstances of the pandemic, as many direct sellers offer health-related brands, benefiting the consumer health category.
Direct sellers are having to adapt to changing consumer purchasing behaviour, not only as a result of the pandemic, but also the continual shift towards e-commerce, which many Israelis now appreciate for its convenience. Local consumers are become smarter and more educated before making a purchase and are less interested in being convinced by sales consultants.
Direct selling is a highly fragmented competitive landscape, dominated by smaller players under “others”. Leaders Sunrider and Herbalife Nutrition, both of which offer a range of herbal-related products, particularly benefited from the rising health and wellness trend that strongly emerged during the pandemic, recording double-digit value growth and share gain in 2020, and allowing them to improve their rankings.
Direct selling is predicted to record stable growth over the forecast period, with an online approach to sales by consultants likely to continue to gain momentum and share of sales. Furthermore, following the rise in e-commerce shopping as a consequence of the pandemic, an increasing number of consumers are likely to continue preferring to shop online as this channel is very convenient, with this trend likely to continue throughout the forecast period.
Herbalife Nutrition sales exceeded previous expectations during the pandemic as the brand, like other consumer health products, promoted relevant health and wellness trends. It was, however, able to significantly outperform consumer health direct selling as a whole in 2020, while 2021 witnessed a fall in sales as Israelis regained greater mobility and returned to making more frequent purchases of these items in health and beauty specialist retailers for instance, or continued to make purchases via e-commerce.
Beauty-related and skin care products were deemed to be less essential during home seclusion and therefore recording a subdued performance through direct selling, in addition to the limited opportunity for face-to-face sales. However, the category witnessed a particularly weak performance in 2021, as consumers grew increasingly confident ordering these products online, leading to solid growth for beauty and personal care e-commerce, although greater mobility outside of the home and pent-up demand meant that beauty specialist retailers was the most dynamic performer in terms of value growth overall.
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Direct selling is the marketing of consumer goods directly to consumers, generally in their homes or the homes of others, at their workplace and other places away from permanent retail locations. Direct selling occurs in two primary ways: -one-to-one basis (usually by prior arrangement a demonstration is given by a direct seller to a customer) or -party-plan basis (selling through explanation and demonstration of products to a group of prospective customers by a direct seller usually in the home of a host(ess) who invites other persons for this purpose). The prime example of a one-to-one method is Avon. Tupperware is famous for its party-plan method. Direct selling of services - such as insurance, telecoms, other utilities, financial services - are excluded.See All of Our Definitions
This report originates from Passport, our Direct Selling research and analysis database.
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