Oriflame seeks partners to up local content

Bindu D Menon New Delhi | Updated on February 10, 2011

In a bid to cut costs and increase localisation, Oriflame India, a wholly-owned subsidiary of the Swedish direct seller of cosmetics, is looking for products and components suppliers from the Indian market. With its local production moving up significantly, the company is seeking partners who will additionally do third party manufacturing for it.

“Over the years, the imports have come down and the local production is going up steadily. In a bid to cut down on logistics and supply chain costs, we are looking at partners who will help us in sourcing fair traded products,” Mr Alexander af Jochnick, Board Member, Oriflame, told Business Line.

Oriflame has its own production facility in Noida which manufactures and exports to 62 countries globally. Its other major global production facilities are at Sweden and Poland. Mr Jochnick, who is in India to mark Oriflame's 15 years in country, said that Oriflame India's business has registered 30-40 per cent compounded annual growth over the past few years in spite of the global slowdown. “India has been growing steadily and we see more investments being made into the country. Additionally, we will also be increasing our product basket to include accessories in our kitty.”

The company said it plans to launch 350 new products in 2011. Currently, it has about 600-odd products and the company services 1,300 locations.

“Asia contributes as much as 10 per cent to Oriflame's global turnover ( €1.3 billion). India is among our top ten markets. Going by our growth here, India will be in the top five league shortly,” he said.

Wellness foray-on hold

Asked about its foray into the wellness space, Mr Marcus Sandstrom, Managing Director, Oriflame, said, the company will not be entering the segment. “We were mulling to enter wellness. However, we have stalled the launch for the current year as we are concentrating on our skin and personal care range”.

The East and North-East region contribute around 40 per cent of Oriflame's sales in the country..

Asked if it will also come up with television commercials for the brand, he said the company is focusing both on above-the-line and below-the-line activities to increase its brand's awareness.

Published on February 10, 2011

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