LR - Info for the Russian Market


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This PP describes the opportunities the Russian market gives to ne partners

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LR - Info for the Russian Market

  1. 1. LR Russia Information for partners
  2. 2. Welcome Your greatest Challenge 5 x larger than Europe 2 x more growth in the beauty segment than in Europe 50% increase in income per year 13 cities with more than 1 Mio. residents 2 x higher consumption than the world population – your greatest chance to change –
  3. 3. The LR World
  4. 4. Welcome to the first phase of your market entry to Russia <ul><ul><li>Online partner registration without sale of products </li></ul></ul><ul><ul><li>Sponsor sets (catalogue, GV Mappe etc.) for sale </li></ul></ul><ul><ul><li>Start of product sales </li></ul></ul><ul><ul><li>Reduced starter kit price </li></ul></ul><ul><ul><li>High LR meeting activity </li></ul></ul>Pre-launch phase Launch phase <ul><ul><li>Leader meetings in existing markets </li></ul></ul><ul><ul><li>Info packages including different Power-points available for partners </li></ul></ul>Info phase in existing markets 16.4.2011 Global Leader Convention 1.6.2011 1 2 0
  5. 5. Agenda Information about Russia Entry strategy Next steps
  6. 6. Country: 2.000 km NS + 9.000 km EW (Land area is 17.08 million 9.000 km EW 2.000 km NS 886 km NS 636 km EW
  7. 7. Country: 1/8 earth's surface
  8. 8. Country: 9 time zones +6 +11 +10 +9 +8 +7 +5 +3 +2 UTC 1) UTC 1) 1 2 3 5 7 8 9 4 6 1) Temps Universel Coordonné = Koordinierte Weltzeit Moscow 12:00 am Berlin 10:00 am Vladivostok 22:00 pm
  9. 9. Country: Longest European river – Wolga Wolga 3530 km 3530 km
  10. 10. Country: Longest rail line worldwide (Moskau – Vladivostok) Moscow Vladivostok 9288 km
  11. 11. Country: Temperature -30° up to +50° +50° -30°
  12. 12. Totally different ways of living
  13. 13. Different Regions, Different Faces
  14. 14. Russia provides you several cities even bigger than whole countries POPULATION DENSITIES IN RUSSIA'S REGIONS People per Sq.Km. 0.0–3.0 3.1–13.0 13.1–32 32.1–50.0 50.1–8031.5 Moscow is the main business center (23.8% of Russia’s GDP & 17% of retail turnover) St. Petersburg Moskau Nischni Nowgorod Jekaterinburg Nowosibirsk Samara Omsk Kasan Tscheljabinsk Rostow am Don Ufa Perm Wolgograd Krasnojarsk Saratow <ul><ul><li>142 mil. inhabitant </li></ul></ul><ul><ul><li>13 Mega-Cities </li></ul></ul><ul><ul><li>High concentration West / South West </li></ul></ul><1,0 Mio. 1,0–2,0 Mio. 2,0–5,0 Mio. >10,0 Mio.
  15. 15. Russia is one of the leading economies of the world with a strongly growing BIP per head GDP TOP 15 worldwide (nominal) in 1.000 trill. US$ 2008 # 8 worldwide Quelle: credit suisse, global insight August 2009, cia world factbook 2008   Netherlands   Australia   Mexico   India   Canada   Brazil   Spain   Russia 1,7   Italy   United Kingdom   France   Germany   China (PRC)   Japan   United States 14,3 Quelle: Statistisches Bundesamt, Länderprofil Russland 2009 GDP per head, respective prices, in US$ 2005 2,096 2003 2,975 2,377 4,105 5,326 2004 2000 2001 2002 2006 2007 9,103 11,807 2008 1,760 6,929
  16. 16. Agenda Information about Russia Entry strategy Next steps
  17. 17. Direct Selling is growing strongly in Russia % DIRECT SALES TURNOVER IN MILLION EUR (NET) <ul><ul><li>Dynamic market growth </li></ul></ul><ul><ul><li>High awareness of Direct Sales </li></ul></ul><ul><ul><li>Market still not saturated in the regions </li></ul></ul>2003 2002 +26% 2009 2,440 2008 2,032 2007 1,900 2006 1,327 2005 1,413 2004
  18. 18. This is also reflected in growing number of independent distributors +22% 2009 4,9 2008 4,4 2007 3,3 Quelle: DSA Russia DISTRIBUTORS IN MILLION (DSA MEMBERS)
  19. 19. Beauty segment is a growing category in Russia Russian market still holds huge potential Russia has huge potential for manufacturers to tap into this growth, and according to a report from market researchers RNCOS, this potential extends to both domestic and foreign cosmetic manufactures. The RNCOS report Russian Cosmetics Markets Forecasts 2008−2012, highlights the fact that the cosmetics industry is currently registering one of the highest growth of any industry segment in the country This is highlighted by the fact that the beauty industry registered growth of 11 per cent during 2007, compared to growth of just 3 per cent in the more developed Western European market. Indeed, the report highlights the fact that this rate of growth is set to surge even further, providing average market growth of 13.2 per cent during the period 2008 to 2012. Source: Skin Care Fragrance Make-up RUSSIA VOLUME FORECAST, UNITS MILL. Quelle: Datamonitor 5,0% 2012 … … … 2008 … … … 2008 46.6 49.8 1.7% 2012 6,7% 2012 … … … 2008 xx% CAGR
  20. 20. The Russian Consumer is different! Source: Euromonitor <ul><ul><li>World Proportion: 11% </li></ul></ul><ul><ul><li>Russia Proportion: 20% </li></ul></ul><ul><ul><li>World Proportion: 3.8% </li></ul></ul><ul><ul><li>Russia Proportion: 7.8% </li></ul></ul><ul><ul><li>Higher usage rate of beauty products than in other markets </li></ul></ul><ul><ul><li>Partly more extreme color choices </li></ul></ul>Fragrances Lipsticks & Lip glosses
  21. 21. Personal Care currently by far strongest segment of all LR products. Other segments with hugh growth potential 5.57% Household products 7.68% Personal Care products 77.67% Others 1.65% Accessories 3.03% Food Supplements 4.40% Detergents Product Split Direct Selling Industry Russia (in %)
  22. 22. <ul><li>Consumption of Nutrition </li></ul><ul><li>% of people using supplements </li></ul>Nutrition currently under-represented but with enormous market growth 8% 80% 50% Market growth 2000 − 2008 (CAGR) Quelle: Datamonitor 22% 5% 9% but
  23. 23. Individual business registration required in order to receive bonus Russia tax authorities are very strict, one has definitely to be registered as entrepreneur before receiving any money. Even interim arrangements are not given. NO BONUS NO CAR NO REGISTRATION AT AUTHORITIES
  24. 24. Partner Categories Type of partnership Bonus Where? How long? A Partners without Entrepreneurial Registration <ul><li>Personal Bonus as discount/ voucher </li></ul><ul><li>Group Bonus is accrued </li></ul>- - B Partners with Entrepreneurial Registration, but without VAT eligibility (Individual Entrepreneurs) <ul><li>Payout of Bonus </li></ul><ul><li>Group Bonus without VAT </li></ul><ul><li>Tax- Authorities </li></ul><ul><li>Different from city to city (7-42 days) </li></ul>C Partners with Entrepreneurial Registration and with VAT eligibility (Entrepreneurs or Limited Liability Company) <ul><li>Payout of Bonus </li></ul><ul><li>Group Bonus with VAT </li></ul><ul><li>Tax- Authorities </li></ul><ul><li>Different from city to city (7-42 days) </li></ul>
  25. 25. All products have to pass a serious certification process
  26. 26. Agenda Information about Russia Entry strategy Next steps
  27. 27. First class located headquarter with metro connection Office DSC Meeting Rooms ü ü ü
  28. 28. Top Team
  29. 29. LR will start with a reduced product portfolio Product Portfolio Russia 2011 Platinum / Nanogold All statements under reserve of sucessful product registration Fragrance AV-Care Deco Nutrition
  30. 30. Attractive pricing at FULL PV/BV Exchange rate: 1€ = 42RUB Retail price gross Russia (in RUB) FULL PV / BV 749 1.059 * 1.149 499 499 999 749 *Rule for Nutritions: buying proce gros = retail price gross Reason: reselling of nutritions is forbiden by law in Russia 1.799
  31. 31. Wellknown documents to support your business Collection (April 2011) GV Mappe (April 2011) Konzept zum Erfolg ( Juni 2011) Corporate Movie (April 2011) Decobrochures (Juni 2011) AV – Brochure (Juni 2011) Collection Compact (Juni 2011) Partnerapplication (Juni 2011) Magazin (special launch magazin In June 2011) ü ü ü ü ü ü ü ü ü
  32. 32. Starter kit from ~ 1.899 RUB (<50 EUR) 1.899 RUB OR 1.899 RUB Extensive Package of print material
  33. 33. Different ways to place an order and pay it <ul><li>Where? </li></ul>How? Payment <ul><ul><li>Place your order </li></ul></ul>or <ul><ul><li>Pick up your packet </li></ul></ul>Only prepayment possible Important for Bonus calculation: Only paid orders regarded No mininmum order value pick up (reservation for 3 days) Over the counter (cash, credit- or debitcard) <ul><ul><li>Decide on home delivery </li></ul></ul>Via banktransfer + delivry fee (no creditcard) <ul><ul><li>Place your order </li></ul></ul>Over the counter (cash, credit- or debitcard) No Service Fee
  34. 34. LR Distribution Center is tailored to the needs of our prospective partners Order taking Pick up Small Meetings Business Presentations
  35. 35. LR starts in Russia with one DSC Moscow Other DSCs to come Choice of location depending on regional development of turnover 1.000km
  36. 36. Due to the large size of the country delivery times vary Irkutsk Khabarovsk Vladivostok Barnaul Krasnoyarsk Voronezh St. Petersburg Moscow Nizhny Novgorod Yaroslavl Kazan Perm Ekatarinenburg Ulyanovsk Izhevsk Saratov Wolgograd Rostov on Don Krasnodar Samara Ufa Chelyabinsk Omsk Novosibirsk <ul><ul><li>Delivery to all regions </li></ul></ul><ul><ul><li>Delivery time may be up to two weeks </li></ul></ul><ul><ul><li>Shipping costs of service provider are to be passed </li></ul></ul><ul><ul><li>Shipping costs depend on the orderweight </li></ul></ul>3–4 days 3 days 5–6 days 7–8 days 9–10 days 11–12 days 13 days
  37. 37. Marketingplan fully implemented from day 1
  38. 38. LR will definitly start the orgaleader car concept Level 1 Level 2 Level 3 LR Polo also planned
  39. 39. Two competitions will support Russian launch Competition Qualification criteria Incentive RUSSIAN LEADER DEVELOPMENT PROGRAM Every Russian partner who qualifies until May 2012 for teamleader (standard 3 month qualification needs to be completed) <ul><ul><li>Trip to Ahlen including 3 hotel nights and flight </li></ul></ul><ul><ul><li>2 day seminar in HQ </li></ul></ul><ul><ul><li>Tour through HQ </li></ul></ul>CROSS SPONSORING AND EDUCATION INCENTIVE All non-Russian TL or OL who develop a OL in Russia in their downline until May 2012 (standard 6 month qualification needs to be completed) <ul><ul><li>Payment of next 2 trips to Russia for further support of OL </li></ul></ul><ul><ul><li>Payment of flight + 3 hotel nights but no more than 1.000 EUR per trip </li></ul></ul>1 2
  40. 40. Welcome to the second phase of your market entry to Russia <ul><ul><li>Online partner registration without sale of products </li></ul></ul><ul><ul><li>Sponsor sets (catalogue, GV Mappe etc.) for sale </li></ul></ul><ul><ul><li>Start of product sales </li></ul></ul><ul><ul><li>Reduced starter kit price </li></ul></ul><ul><ul><li>High LR meeting activity </li></ul></ul>Pre-launch phase Launch phase <ul><ul><li>Leader meetings in existing markets </li></ul></ul><ul><ul><li>Info packages including different Power-points available for partners </li></ul></ul>Info phase in existing markets 16.4.2011 Global Leader Convention 1.6.2011 1 2 0
  41. 41. Prelaunch Software inclusive User Manual and Support for free <ul><li>Benefits: </li></ul><ul><ul><li>Create your very own subdomain </li></ul></ul><ul><ul><li>Register potential partners directly in your downline </li></ul></ul><ul><ul><li>Use the downline navigator to check on your new russian structure </li></ul></ul><ul><ul><li>Contact & Inform all interested Partners </li></ul></ul> Details to follow In April 2011 Available in 6 languages
  42. 42. Starterkit with a very special price – Only pre registered partners are allowed to order 1.399RUB OR Only for prelaunch partners Delivery from June 2011 1.399 RUB Extensive Package of print material Special delivery fee rate of ~ 5 EUR for preregistered Partners All preregistered partners obtain the possibility to conclude a partnerapplication with the special Starterkit from 01.06. till 30.06. The data of the other preregistered prospectives will be deleted at 01.07.2011
  43. 43. Prelaunch Phase 15.04.2011 − 25.05.2011 Pre – sponsor package <ul><ul><li>Collection + GV-Mappe + Company DVD EKB 4,00 EUR / > 10 Units 3,50 EUR </li></ul></ul>2 3 Homepage Russia <ul><ul><li>Company Information in Russian language </li></ul></ul>Prelaunch Software 1 <ul><ul><li>Opportunity for all existing partners to pre-register Russian partners </li></ul></ul><ul><ul><li>Sponsorsets available </li></ul></ul><ul><ul><li>All partners joining in prelaunch phase can get reduced Starterset from June1 </li></ul></ul><ul><ul><li>Available in 6 languages </li></ul></ul>For free No Product Sale
  44. 44. Meeting Calendar April May June July August Sept. … January Show room opening Info-Meetings Official opening in Moscow LR standard Meetings Moscow Special Business Days 1x per week in Moscow 28.05. 9.7. 6.8. 10.9. Regular Sales / Company Presentations All statements under reserve
  45. 45. LR perfectly prepared your successful start in Russia FAQs & Company presentations <ul><ul><li>All about Russia </li></ul></ul><ul><ul><li>Marketingplan </li></ul></ul><ul><ul><li>presentation </li></ul></ul><ul><ul><li>Company </li></ul></ul><ul><ul><li>presentation </li></ul></ul><ul><ul><li>Image </li></ul></ul><ul><ul><li>presentation </li></ul></ul>From March 7th