New Delhi:India will become the largest market for Swedish direct-selling company Oriflame over the next 5-10 years, said Niklas Frisk, VP and head of south Asia and MD India. It currently operates across 60 odd countries.
India, where it started business in 1995, is the fifth largest market in terms of revenue contribution for Oriflame at present.
“India is the fastest growing market for us, and it is seen as the largest market in near future. The timeframe depends on the growth of other regions,” Frisk said.
Russia is the largest market for Oriflame at present. However, the Nasdaq-listed company does not disclose revenue details of the countries it operates. Globally, its has about 1.5 billion euros of annual sales.
Oriflame, which launched its wellness range of products in India on Tuesday, already sells about 500 products in six categories, including cosmetics, skin care, hair-colours. “We have introduced wellness as a category globally in 2005. It took time to bring these products to India as we needed to develop India specific products that are completely vegetarian, and produced here,” he added.
Over the next few years, Oriflame may look at entering into new segments like health drinks and juices, which would boost its health and wellness portfolio. “We will have to create this. For that, we are open to opportunities, including the inorganic route,” said Frisk. However, he added, the company is not in active talks at the moment.
Speaking on the regulations, Frisk said the company has been in dialogues with the India Government and believes that the Government will come with proper regulations for the direct-selling industry in India soon.
In the past couple of years, some of the direct-selling companies have faced
hurdles as some of the executives of these companies were arrested under the Price Chits and Money Circulation Scheme (Banning) Act. The Government is currently working on possible amendments of the Act, and have indicated that there may be an independent regulator for the direct-selling industry.
Recently, KPMG and FICCI together said in a report that there was a need to bring regulatory certainty for the direct-selling industry, which is mistakenly coupled with fraudulent money circulation schemes because of a lack of clarity in existing legislation.
According to the KPMG-FICCI estimates, the direct selling industry in India with the right policy stimulus, this industry might well reach its potential of INR 64,500 crore from about Rs 7,200 crore at present, a nine-fold increase by 2025.