Oriflame sets sights on Eastern Europe

By Simon Pitman

- Last updated on GMT

Related tags Eastern europe Europe

Sweden-based direct sales player Oriflame says it will continue to
focus its plans for sustained growth on Eastern Europe and
Mediterranean regions, following the publication of its 2005
financial report.

The company re-iterated its aims to achieve local currency sales growth of 5-10 per cent per annum and sales growth of 15 per cent in 2009 as it continues to expand its penetration in the CIS, Baltics and Central European regions and concentrates on developing its high penetration levels in the Mediterranean region.

In 2005, this focus led to significant investment, particularly in Eastern Europe, and more specifically Russia, where the company is racing to make the most of opportunities that will soon start to disappear.

"We see before us a future in which time is becoming more and more precious,"​ said Magnus Brannstrom, company CEO.

To meet requirements of speed to market, vital to players in the direct sales, Oriflame has been investing heavily in its supply chain recently.

In particular the group has made investments in software, designed to reduce the time-to-market for products being shipped from its warehouses. In recent months the company has been investing heavily in supply chain software from SoftBrands, installing it at new facilities in Poland, India and in Shanghai in China.

During the coming year the company will also be introducing a Product Fulfillment strategy, in which consultants will be encouraged to give a higher standard of service to customers, reducing out of stock products and increasing customer alternatives.

The company will also be putting more emphasis on internet sales during the course of 2005, on the back of significant growth experienced during the course of last year.

By the end of 2005, the company was offering its online ordering service in 30 markets, a strategy that led to a 245 per cent growth in internet orders during the all-important fourth quarter Christmas trading period.

Initiatives have also been introduced to encourage consultants to place orders online, too. This has led to around 90 per cent of all orders in Scandinavian countries now being placed over the internet, while other markets have reached an average level of 40 per cent.

The company says that it sees plenty of room for further growth for internet sales, which in turn should also witness a significant reduction in costs due to the simplicity and effectiveness of the process.

The report also acknowledges that, besides investment in information technology, research and development activity will also be stepped up in an effort to maintain an innovative and effective product portfolio.

To maintain a high level of product development, the company says it is recruiting for a number of new scientific positions within its primary research and development facilities.

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