Value sales declined in 2020, as social distancing measures to curb the spread of COVID-19 curtailed selling opportunities. However, with many people losing their jobs, due to the economic fallout of COVID-19.
In spite of COVID-19 and less demand for beauty products, Avon maintained leadership of the channel in 2020 with a wide product portfolio and good recognition of its brands ensured by long years of presence in the market. The company is dynamic in terms of innovations, and actively works on its business model to better suit the needs of customers in the digital age.
The channel is consistently dominated by large international players, which benefit from wide recognition, well-established networks of selling consultants and good knowledge ensured by long years of presence in the market. Companies such as Avon, Oriflame, Faberlic, Mary Kay, Amway, Herbalife, Tiens, LR Health and Beauty, Forever Living Products are all large players with a global presence, which gives them competitive edge over local companies in the form of better financial sustainability and higher resilience to economic or political shocks, as well as better market knowledge and higher budgets for marketing and innovation.
It is expected that direct selling will return to value growth, once COVID-19 infection rates start to fall and direct sellers can again physically engage with consumers. There is also expected to be increased interest in people who want to work as self-employed direct sellers, due to the poorer economic performance over the forecast period, as well as more people looking for flexibility in their working hours, having got a taste of it through working from home in 2020.
Beauty and personal care is consistently the largest product area in value terms. Over the forecast period, direct selling is set to see further modest growth.
As direct sellers operate in common retail environments with companies from other retail channels, they are pressed to keep up with global market practices and fight for consumers. With this understanding, direct sellers will diversify their marketing tools to withstand competition from other retailers.
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