Swedish brothers Jonas and Robert af Jochnick quit their jobs in 1967 to start Oriflame; a nature-inspired beauty products company. They were discouraged by peers and family for giving up a stable career and plunging into the venture. Despite a fragile start, they perservered and worked tirelessly to build the business. Today, Oriflame is a listed company publicly traded at the Stockholm Nasdaq Exchange; and the world’s leading beauty company selling direct.
Deeply rooted in the history and heritage of the company, Oriflame has committed to inspire and offer people similar opportunities for achieving their dreams. Individuals can become Oriflame‘s directselling consultants with low entrance fees and no risk; developing their career according to personal goals and circumstances. More than three million independant consultants in over 60 countries now market Oriflame’s products, and this network continues to expand.
Broadening the network to China
In 2006, Oriflame became the third foreign cosmetics company to be granted a direct sales license in China. Part of Oriflame’s strategy to grow its network and reach in the country is a robust support system for all of its local consultants. This includes brand marketing, provision of training, and more importantly, the timely delivery of Oriflame’s wide portfolio of Swedish, nature-inspired beauty products.
Oriflame has a strategic logistical network for the distribution of goods from its production sites to distributors, consultants and end-consumers in China. Apart from a central warehouse, domestic distribution sites responsible for the lastmile delivery are set up in key locations across the country. These distribution sites are critical touchpoints. They have to ensure sufficient inventory for all products while preventing obsoleteness; and facilitate efficient dispatch.
To ascertain and maintain high-standards of operations and efficiency at these distribution centres, Oriflame worked with partners such as Arvato – a leading business process outsourcing provider. Arvato surrounded its solutions with IT integration and automation to manage the large variety of Oriflame products and fulfil the need for speed during dispatch. For instance, a centralised IT back-end system is utlised to allow Oriflame end-to-end inventory visibility across all its sites in China. Oriflame benefits from greater accuracy in demand forecasting and better inventory management that align with its country-wide sales strategies.
Computerised tools, such as the Pickby- Light system; Radio Frequency (RF) scanners, and digital weighers are also used to ensure that orders are picked and packed with minimal human error. The enhanced efficiency brought by these digitised tools meant reduction of costs through elimination of excessive manpower.
Perfecting the sales and purchase journey
For Oriflame’s direct-selling consultants, a stable and efficient last mile fulfilment supports their sales efforts which also translates to better purchase experience for their end-consumers. The seamless flow of information for example, allows consultants to track their orders in realtime via the Oriflame app, WeChat app, or Short Message Services (SMS). This feature allows consultants to inform their customers the status of their orders with greater certainty.
Because of the scalability and flexibility built into the last mile distribution system, Oriflame’s consultants can also be sure that they can take full advantage of promotional periods, such as during China’s annual 11.11 Global Shopping Festival to maximise sales. Surge in order volumes are fulfilled with consistent efficiency and accuracy by virtue of Arvato‘s digitised processes and computerised tools; maintaining a high standard of customer service.
Notably, the option for value-added services such as postponement strategies at the domestic distribution sites also contribute to Oriflame’s customer journey. Arvato inserts the promotional materials at the distribution sites only when an order has been placed. Customers and consultants therefore only receive the latest, most up-to-date marketing collaterals.
Towards bigger dreams
Oriflame’s direct-selling model has proven successful in helping millions of its consultants worldwide build a career and fulfil their dreams, with no exception in China. A key component in backing Oriflame’s network expansion has been its supply chain model. The agility and flexibility of its logistics has allowed Oriflame to adapt swiftly according China’s dynamic market environment.
As Oriflame continues to expand its network, their digitised supply chain will act as a strong foundation from which varied market strategies can be built upon; allowing more people to benefit from the Oriflame opportunity and fulfil their own dreams.