Direct Selling in Portugal

2020 IMPACT

COVID-19 brings new challenges for direct selling, prompting an expansion into digital sales

COVID-19 brought a range of new challenges to direct selling in 2020. Companies in this channel were forced to adapt to the “new normal” of life under COVID-19 by expanding into digital sales in 2020 in order to remain competitive, supporting continued sales under pandemic conditions by offering the flexibility and contact-free purchase options.

Health and wellness sees renewed interest under COVID-19

Although overall retail current value for the channel recorded a sharp decline in 2020, consumers in Portugal did demonstrate a growing interest in products related to health and wellness trends during the COVID-19 pandemic. As the COVID-19 pandemic put a greater focus on health and immunity, consumer health products sold through direct selling saw an increase in demand in 2020.

Natura&Co takes over Avon as Oriflame overtakes Avon for the first time

In January 2020, Avon was taken over by Natura&Co, which also owns The Body Shop, Aesop and Natura itself. Since the transfer of ownership, Avon has been immersed in a process of transformation and repositioning.

RECOVERY AND OPPORTUNITIES

Future of the channel remains uncertain in the aftermath of COVID-19

The future remains uncertain for direct selling in Portugal going into the forecast period. Usually direct selling works in a counter-cycle in that an increase in unemployment tends to boost the number of salespeople looking for extra household income.

Consumer purchase habits are shifting as the digital revolution makes its mark in Portugal

The digital revolution is changing the way consumers in Portugal shop, bringing a growing dynamism to retailing in the country and challenging players in direct selling to innovate and present new value-added features to attract consumers in an increasingly competitive retailing landscape. Although store-based retailers are investing heavily in omnichannel approaches to sales as well as the expansion of e-commerce to increase their penetration in Portugal, the most successful direct selling retailers over the forecast period will be those that appeal to this trend by using digital tools to develop their businesses.

Direct selling workforce continues to change

The composition of the direct selling workforce has experienced a number of changes over the review period, particularly with a more positive economy resulting in a higher number of Portuguese consumers in full-time employment. The direct selling workforce will be likely to change again in the forecast period, however, as the COVID-19 pandemic is expected to have dramatic macroeconomic repercussions for Portugal, including a sharp increase in unemployment and a reduction in consumers’ spending power.