Country Focus
January 2011
Austria Survives and Thrives Through Change
Vienna: View into 6th and 7th district at sunset
Fact FilePopulation: 8 million Capital: Vienna Geography: Number of direct sellers: Annual
sales: Ed Note: |
In the midst of a global recession, Austria is quietly going about its business as the direct selling industry proves that having the right attitude and willingness to adapt means any challenge can be overcome. Judith Wojtowicz reports.
INDUSTRY observers believe the global recession has not impacted Austria as seriously as some of its European neighbours. Reasons include a stable and prosperous environment with a generous welfare system and a government that acted promptly at the first sign of trouble in 2008.
Despite enjoying a well-developed economy and high standard of living, the country is, nonetheless, familiar with recessionary downturns from previous experience. Austrians’ naturally cautious nature means they are, therefore, more inclined to save than spend, which means less dependence on credit.
Unemployment has not risen as steeply as elsewhere, partly because the government subsidised reduced working hours schemes to help companies retain their people. At the same time, social security benefits pay up to 80 per cent of salary for six to 12 months, which means there is less urgency to seek an alternative source of income, such as direct selling.
However, unemployment is expected to rise this year, the banking sector has required government intervention, and economic restructuring is ongoing. Against this background direct selling organisations (DSOs) have been reviewing their operations and planning new initiatives to take advantage of these changing conditions.
The industry here was shaken a few years ago by a major legal challenge from the tax authorities which took some time to resolve. For those who held their nerve and supported their networks, the situation turned out well, raising standards by providing clarity and credibility. Today, the regulatory environment is more straightforward, and the image of the industry is generally positive. Party plan remains the most popular way of doing business in a country known for its hospitality.
Michael Tziallas, Managing Director of Tupperware Austria, the largest DSO in the country, speaks for all when he says current economic conditions should be seen as an opportunity. “During a recession, we should all achieve our best ever results by opening our doors to as many new people as possible through investment in innovative strategies,” he said. “Direct selling was, is and always will be relevant as long as we continue to change and adapt. Many people have made the mistake of confusing direct selling with the old-fashioned image of a 60s housewife, but this is absolutely not the case today.
“Direct selling is a way of life, and Austria is a great place to do it for those companies who refresh their methods to meet changing circumstances. For the individual, it is a way to start their own business from home without financial outlay and a chance to escape from the sofa by meeting new friends, socialising and having fun while making money at the same time,” he added.
“Companies thinking of entering this market should have a high-quality product range and take time to understand the culture. It is not simply about offering a flexible earnings opportunity – it is more about keeping their promises and maintaining their integrity so people can be proud of being part of that organisation, regardless of who it might be.”
