Several Swedish companies organised in Egypt to celebrate Sweden’s National Day, including Tetra Pak, Volvo, IKEA, Absolut, and Oriflame.
A large number of women in Egypt buy Oriflame’s products, as it suits all economic classes and maintains a high quality.
Daily News Egypt met with Oriflame Egypt’s Managing Director Klas Kronaas and sat down with him for an interview about Oriflame’s operations in the country.
When did you start working for Oriflame Egypt?
I have been living in Egypt for a year and a half but I am still somewhat new to the country. I have worked with Oriflame for five years in seven different countries, with Egypt being the seventh.
What were the previous six countries?
Kenya, Uganda, Tanzania, India, Pakistan, and Sri Lanka.
Were not you concerned about working in the Middle East, given what the media has been reporting recently?
Absolutely not. I do not always trust what I hear. In addition, troubles are everywhere.
I have friends and colleagues who live in Egypt; they see that it is perfectly safe.
What is the situation like for Oriflame in Egypt?
Next year is our 20th anniversary. We will be celebrating this event by launching new products. It has been a very successful 20 years.
We are the number one direct-selling company here and one of the top cosmetics companies in Egypt.
What do you mean by direct-selling company?
It means that you will not find us in stores, as we do not work through ordinary retail outlets. Anyone who picks up our Oriflame catalogue can sell our products, making for him/herself an extra income.
So it works this way: people become members of Oriflame, and then they can sell our products through our catalogues, getting an immediate profit of 30 percent from any item they sell.
How does this system help Oriflame grow?
It helps a lot. At the moment we have 100,000 people who are selling our products in Egypt. Looking at the infrastructure in Egypt and the traffic in Cairo, it is so much easier to buy products from a neighbour for example, or from a friend, than it is buying them from a specific store.
So most of the people know at least someone who sells our products, and our products are easy to find.
How many offices do you have across Egypt?
We have seven offices located in Mohandessin, Maadi, Heliopolis, Alexandria, Ismalia, Suez, and Mansoura.
How does Oriflame Egypt’s sales compare to Oriflame markets worldwide?
Egypt is one of our biggest markets worldwide, bearing in mind its high population.
Is Oriflame Egypt targeting a specific social class?
No, actually if you browse our catalogue, you will find prices that target a mass consumer brand.
So we have everything: our most premium products that target high income clients, and then we have products at reasonable prices for everyone.
Keep in mind that we do not produce anything locally, so this raises prices a bit. Everything is produced in Europe.
How has the increase in foreign currencies (Euro and US dollar) affected the company in Egypt?
Of course it affected us negatively. As I mentioned, our products are produced in Europe, so when the Egyptian pound drops, products become more expensive, which impact our profitability.
How do you plan to overcome this issue?
We see it from another perspective. It will not be an ongoing problem because I believe it is a short-term situation.
Maybe some cost cutting in the organisation is needed. Also, in order to overcome this situation we need to be more effective. We will most likely need to increase prices a bit to compensate for the currency difference.
As I told you, we believe that the economy will turn around, tourism will recover, and the Suez Canal will achieve its objectives.
We have been present in Egypt for 20 years and we are looking forward to the future. We will not panic over a temporary situation in a long-term investment.
Tell us about Oriflame in other Arab countries.
In North Africa, we are in Morocco, Algeria, Tunisia, and Egypt. We also have franchises in Sudan and the UAE. This is basically our presence in the region.
On the other hand, our main markets in North Africa are Egypt, then Morocco, then Algeria, and then Tunisia.
Are you looking to expand in more countries?
We are present in 66 countries worldwide. We always look at the size of the cosmetics market, and whether there are new markets we should enter.
In countries that are suffering from an economic crisis, do you think cosmetics are considered luxury products, rather than essential ones?
It depends on how you define cosmetics. For example, if you include soap, shampoo, and tooth paste, then of course it is essential, as these are products that you must have.
On the other hand, there are other luxury products within the cosmetics industry.
With regards to Oriflame’s model, it is practical for countries experiencing economic struggles, as our products target several economic classes. In addition to this, people can make an extra income by selling our products.
How did Oriflame Egypt do in 2015?
It was a very successful year. We opened new service points where people can pick up our products.
This was a positive step, as our main investments are more of an infrastructure.
What do you mean by “more of an infrastructure”?
I mean that as we acquire bigger warehouses, service points, offices, and hire more people, we will be able to expand.
How many employees do you have in Egypt?
In addition to these 100,000 independent vendors, we have 200 employees.