Learnings from Tupperware

Change is inevitable

Tupperware Philippines was fast enough to ride with Carlo’s Yulo success with the offer of 1 million pesos worth of Tupperware products and just recently last Sept 17, Tupperware Brands filed Chapter 11 – Bankruptcy ?in the US.??

What triggered the bankruptcy ? Our business environment ?witnessed dramatic shifts during the COVID-19 pandemic, impacting various sectors and business models. One such business model that faced significant challenges is multi-level marketing (MLM), exemplified by brands like Tupperware and AVON. These companies, known for their direct sales approach, experienced a direct hit during the pandemic. Concurrently, there was a remarkable rise in e-commerce and direct-to-consumer (D2C) shopping, reshaping consumer behavior and market dynamics.

Tupperware, a well-established name in the MLM industry, relies heavily on in-person sales and party-based marketing strategies. The pandemic-induced lockdowns and social distancing measures brought these activities to a halt, significantly disrupting their sales channels. As a result, Tupperware, among other MLM companies, had to pivot rapidly to sustain their business.

Challenges Faced by MLM Companies

·?????? Reduced In-Person Interactions: The essence of MLM lies in personal interactions, demonstrations, and social gatherings. COVID-19 restrictions eliminated these opportunities, thus affecting sales and recruitment.

·?????? MLM – Credit terms extended to consumers, unique to the Philippines is the – “ use first and will collect month end or next month.? Personal collection was very successful selling 2x priced fabric softeners vs retail brands during the pre -pandemic period.

·?????? Supply Chain Disruptions: Global supply chain issues caused delays in product availability, further hampering sales efforts.

·?????? Economic Uncertainty: The economic impact of the pandemic led to reduced discretionary spending, affecting sales of non-essential items like those offered by MLM companies. Consumer coping behavior shifted to unbranded consumer goods as alternative substitute swiftly adapted to the changing landscape:

Embracing Digital Transformation

Many companies accelerated their digital transformation efforts, leveraging online platforms for sales and marketing. Virtual parties, social media marketing, and e-commerce websites became vital tools. Tupperware, for instance, enhanced its online presence and embraced digital marketing strategies to reach consumers.

E- commerce first Brands – Rise of E- commerce availability disrupting the model of Distributor and retailer model before reaching end consumers. Case in point is the success of? Dr. Schiba ( co-founded by Tim Michael’s) huge success? in the Philippine market – Ecom native product.

The Rise of E-Commerce and D2C Shopping

Changing Consumer Behavior

The pandemic accelerated the adoption of e-commerce and D2C shopping. Consumers, confined to their homes, turned to online shopping for convenience and safety. This shift was marked by several trends:

·?????? Increased Online Purchases: Consumers embraced online shopping for a wide range of products, from groceries to luxury items.

·?????? Preference for D2C Brands: Direct-to-consumer brands gained traction as they offered unique products, competitive pricing, and direct engagement with customers.

·?????? Enhanced Digital Literacy: The pandemic period saw a rapid increase in digital literacy, with more consumers comfortable making online purchases.

·?????? Mobile Payment Boom : Transactions was easier and on-line payments and delivery was faster now for the Philippines.

·?????? Digital Influencers and Sellers – Side Hussle gig. – rapid increase in online reseller business shifted a “ on-line side business” for most families and stay at home parents.? No need to stick with traditional one Product to push and sell .

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The COVID-19 pandemic served as a catalyst for significant changes in the business landscape. MLM companies like Tupperware faced unprecedented challenges but also opportunities for innovation and growth through digital transformation. Simultaneously, the rise of e-commerce and D2C shopping reshaped consumer behavior, creating new avenues for businesses to connect with their customers. As the world continues to adapt to the post-pandemic era, the ability to navigate these changes will be crucial for sustained success.

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