The closure of retail that occurred during the pandemic, opened a business opportunity for two other segments of commerce: firstly, e-commerce, which soared while consumers remained isolated at home. And also, to direct sales, the marketing of products that are through independent resellers.
It happens that while many jobs were lost due to the cessation of many activities, there were those who chose this route as an alternative to generate new income with a very low investment. Thus, this year the number of entrepreneurs motivated to sell everything from cosmetics and household items to “wellness” line products grew by 20%, whose sales multiplied in these months of quarantine.
According to data from the Chamber of Direct Selling Companies (CAVEDI), which groups together companies such as Avon, Natura, Tupperware and Essen among others, there are about 1.2 million resellers, and 90% are women, who generated a volume of sales approximately 20% higher than in 2019. Last year, direct sales sold $ 65.8 billion, 11% above the previous year.
“The growth in volumes has been taking place in recent years and accelerated with the pandemic,” says Gonzalo Falcon, executive director of the chamber that groups these types of companies (CAVEDI). For that, the digitization of the companies was key. “The leap that companies planned to make in three years, they did in seven months,” he says.
This technological leap was central to Avon, one of the leaders in the direct sale of cosmetics: not only did it digitize its traditional brochures where it exhibits its products, but it has just launched a new ecommerce platform, where consumers and resellers can access the merchandise and then receive it in their homes.
Although the company – which has just turned 50 in Argentina – has seven stores, the focus of the business continues to be direct sales. “After the pandemic, as people’s mobility recovered, new resellers began to join in seeking to generate new income. Today we have 10% more in the company ”, says Rolando Castro, CEO of Avon, the brand that since January of this year has been part of the Natura & Co group, together with The Body Shop, the Brazilian Natura and the Australian Aesop.
The sales equation, for this company born in 1886, in the United States, changed in this very particular year: it had to decrease the production rate of its 31 lipsticks per minute, for example, to intensify the lines of alcohol gel, masks for the eyes, depilatory waxes and nail polishes, says the businessman. At its Moreno plant, one of the 9 it has in the world, Avon manufactures 400 thousand products per day, of which it exports 35% to Chile, Paraguay and Uruguay.
According to data from the Argentine Chamber of the Cosmetics and Perfume Industry (CAPA), the market share of the cosmetic industry is channeled by 72.5% to retails, 23% to direct sales; 2.5% in the professional channel (hairdressers) and 2% through the web.
Another of the large companies that stands out in direct sales is Amway, the one with the highest turnover in the world. In the domestic market it has four business units: beauty, personal care, home care and nutrition. The latter represents 30% of the turnover. “Many of these products are made with components based on vegetables from our 2,500 hectares of organic farming fields around the world,” they specified in the company that has 40,000 “entrepreneurs” in the country, marketing their products.
In any case, the item that is strong in local direct sales is cosmetics: they account for 45% of total sales, compared to 16% for home products, 8% for “wellness” and the rest is divided into categories. minors.