Direct seller Oriflame expands in Turkey

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ISTANBUL--Swedish cosmetics manufacturer and direct seller Oriflame plans to establish production facilities in Turkey. Currently, it has production in Ireland, Poland and India, but the company is planning to enter Morocco and Egypt so there is a need to have production close to these markets.

Of the 54 countries Oriflame has operations in, Turkey is the company's second-largest market after Poland. Oriflame makes 10% of its $400 million worldwide sales in Turkey. Russia was Oriflame's biggest market until the financial crisis.

During a visit to Istanbul, Oriflame Chairman Robert Jochnick said: "We thought the Asian and Russian crisis were going to affect our operation here. But we find that the Turkish consumers who have become accustomed to high levels of inflation are not affected as we had predicted. Turkey nowadays seems much more stable in comparison to many other markets."

Oriflame, which has 80,000 distributors in Turkey, is the market leader in color cosmetics and general product sales, and ranks second in the body-care segment, according Mr. Jochnick.

A multilevel marketing system is especially successful in developing countries, Mr. Jochnick said. "In developing countries, people must make more money. Most of the times, they look for a second job and direct selling is the easiest way to get extra cash. It is very easy to start at Oriflame as a distributor just by paying a modest entrance fee that is $15 in Turkey. On average, a Turkish distributor makes $345 a month." Mr. Jochnick identified Brazil, Egypt, India and Morocco as growth markets for Oriflame.

Copyright November 1998, Crain Communications Inc.

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