It’s easy to forget that direct sellers are still active in the Kiwi market when ecommerce is so dominant, but as recently as 2015, total retail sales for the industry topped $215 million according to its representative body. Now, a new player from the United States has announced plans to enter New Zealand.
Nerium International describes itself as a “global leader in science-based, age-defying skincare products”. Order prices for its five products range from AUD$85 for five ‘Eye-V Moisture Boost Hydrogel Patches’ to AUD$160 for ‘Age-Defying Night Cream’.
The Texas-based company was founded in 2011, and already boasts more than $1 billion in cumulative sales. Also targeting Australia, South Korea, Japan and Hong Kong, it will be officially active in New Zealand from April 7, and will hold corporate lead regional training events in New Zealand from 8-11 May. It’s planning a launch event for later in the year.
“We are pleased to announce that Nerium International will open for business in New Zealand, a thriving market for both the global anti-ageing skincare segment and the direct sales industry,” said Nerium International founder and CEO Jeff Olson.
“Nerium International’s leadership team looks forward to bringing our unique business model and revolutionary products to New Zealand as we continue to expand into the Asia-Pacific market.”
In statistics published by the Direct Selling Association of New Zealand, personal care products earned more than $46 million in retail sales from 2015, clocking in behind leading category ‘Nutritional products’ and second-place category ‘Household products’. It put total retail sales at $215,688,540 – DSA executive director Garth Wyllie says he doesn’t expect the 2016 data to be substantially different.
Nerium has been bolder than the DSA, stating in its press release: “With the New Zealand direct selling industry at $1.9 billion and growing, Nerium International looks forward to participating in this thriving market.”
Later communication indicates Nerium had intended to quote the economic impact of direct selling to New Zealand rather than the value of its sales. The latest data from the DSA indicates the economic impact of direct selling in New Zealand is around $2.8 billion.
“I anticipate a small growth with some companies showing stronger growth than others. Particularly those with a focus on party plan/show and tell selling,” Wyllie says.
He says direct sales makes up around 20 percent of the total cosmetic market, but there’s scope for growth in this area.
Asked how direct selling has adapted to compete with the convenience of ecommerce, Wyllie says ecommerce is now part of the direct sellers’ strategy.
“The days of pure door-to-door selling of cosmetics is long past and these products are much more sold by networking and party plan structures supported by strong social media and internet based back room systems,” Wyllie says. “Ecommerce has yet to form a personal relationship in the way that the local Avon lady has been able to with their customers nor does it have the ability to explain how the products work best with particular skin types.”
Those involved in network marketing often join because they’ve tried the product and loved it enough to share with others, Wyllie says. While not all of these sellers progress to running a business, and instead simply purchase at a discount, they’re all part of the direct selling mix.