Avon Romania set to increase faster than the market

Avon Romania, the largest company operating direct sales for cosmetics on the domestic market, intends to persuade all of its 100,000 sales representatives to use the Internet when placing orders. At present, 90% use the online order system.
“A ‘paperless’ business could simplify operations and reduce costs,” believes Angela Cretu, general manager of Avon Romania. She also believes many of the company’s documents could be transferred from paper to an electronic format.
The company currently issues between 800,000 and one million sales catalogues, which are distributed once every three weeks.
“The Romanian cosmetics market is just taking shape and the profile of female consumers, who take great interest in body care, has an advantage over our other European markets,” stated Cretu. She expects Avon Romania to witness a higher growth in sales than the market level this year,.
Last year, the company generated turnover worth 126m dollars, up 13% year-on-year. During the same period, net income advanced 15%, to 19m dollars.
“Of course modern retail growth is always a challenge, but we are continuing to rely on our personal relationships with customers, which direct sales offers,” stated Angela Cretu.
Direct sales companies such as Avon and Oriflame rely a great deal on rural areas for sales, where retail is not as strongly developed.
Last year, rural areas generated 38% of Avon sales. Female cosmetics ranked first (93%), whilst male products accounted for the rest.
In 2006, the company invested 12m dollars in order to build a regional distribution centre in Chiajna (near Bucharest), with an 11,500 square metre area. Around 70% of the 7 million products packaged daily in the new Avon centre are distributed domestically.
Avon plans to invest several hundred thousand euros in a new assembly line, which will be added to the distribution centre. At present, the company has 250 employees in its regional centre, which also serves Bulgaria, Moldova, Macedonia and Albania.
Last year, Avon Romania increased its brand awareness on the Romanian market to 95%, up from 59% in 2000, according to company data. The company has doubled promotional investments over the past three years, which last year reached a value of 3.7m dollars.