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Direct Sales in Europe continue growth despite economic turndown
Economic troubles in Europe affected the direct selling market in two ways: sales decreased in selected countries in 2012, such as Italy and Portugal, but the number of direct selling representatives grew as more people seek a source of additional or even primary income.
Cosmetics and personal care items lead direct sales in Europe
The leading product category for direct sales in Europe is cosmetics and personal care items, with a share of over a third on total sales, followed by wellness products. In some countries, such as Sweden, wellness is ahead, while in other, for example Ukraine and Turkey, beauty products take up over two thirds of the market.
The best performing direct selling company in 2012 globally was Amway, with one-digit growth in global sales. Avon and Herbalife took second and third places, with sales of both companies decreasing in 2012. The largest European direct selling company among worldwide leaders in 2012 was Germany-based Vorwerk. Also in the top 10 global companies was Oriflame, registered in Luxemburg. Along with Avon, Oriflame has taken strong positions in several European markets, especially in Eastern Europe. A Russian company made its way to the top 50 global direct selling companies in 2012: Faberlic with EUR 257 million sales.
Direct Selling volume varied by sub-region throughout Europe
In Eastern Europe Russia showed a double-digit increase in direct selling revenues. New tax regulation for sole entrepreneurs is expected to negatively impact the industry, but more growth is foreseen from the rural areas, especially small villages, where the penetration of retail channels is not high. Similarly, in Poland further growth is expected to come from new customers in rural regions. In Turkey, where the sales are also on the upward trend, the dominating product category is beauty and personal care with over 80% share of the market.
In Central Europe, Germany has seen a one-digit increase in sales in 2012. The direct selling companies there were facing increased competition from other sales channels, especially E-Commerce. As a solution, some direct selling companies have opened online shops or have announced plans to do so.
In Western Europe, the French direct selling market has seen an increase in both sales and number of direct selling representatives. Meanwhile, in the UK more young people are joining the sales force in direct selling, bringing high technology affiliation with them. In both countries party plan sales gained increased importance as a direct selling method, reaching a double-digit share of total sales. In Italy the sales were down in 2012, though the number of sales representatives increased, but in H1 2013 the direct selling companies resumed growth.
In Scandinavia, direct sales were down by several percentage points in Sweden, while in Finland and Norway they grew, even at a double-digit pace in Norway. The highest selling categories in all three countries were wellness products and cosmetics and personal care.
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