What is the most expensive household vacuum?
I guess the majority point to Dyson, and a few come with Miele, a German high-end brand. The answer, to your surprise, is Vorwerk Koblod.
The VK200 vacuum as shown below sells for GBP 1,199, or around RMB 10,333. With all accessories added, the price comes to GBP 1,500, or around RMB 13,000.
How come Vorwerk? What is its uniqueness?
Founded in 1883 by brothers Carl Vorwerk and Adolf Vorwerk, Vorwerk remains a family enterprise. It started with carpet selling, and later approached home appliances in which it creatively employed direct selling.
Now its main businesses covered Kobold-branded vacuum, Thermomix cooking machine, JAFRA cosmetics, Vorwerk carpet, Lux Asia Pacific health care products (water purifier, air filter, etc.), as well as AKF Group engaged in finances.
In 2017, Vorwerk saw its sales reach EUR 2.9,061 billion, reputed as the fourth largest direct seller in the world, next only to Amway, AVON and Herbalife.
As to sales, Thermomix achieved EUR 1.12 billion with 39% share, Kobold EUR 791 million with 27% share, JAFRA cosmetics EUR 363.4 million with 13% share, Vorwerk carpets EUR 58.1 million with 2% share, Lux Asia Pacific EUR 25.1 million with 1% share, newly acquired Neato floor cleaning robot EUR 62.7 million with 2% share, and AKF EUR 446.1 million with 15% share.
Vorwerk shares a similar business mode with Amway and Herbalife. Take Kobold vacuums for example, salespersons will target high-income communities and offer a free door-to-door cleaning to facilitate sales promotion.
Thermomix features a family-sharing mode——inviting friends to parties. To run bigger, a great many direct salespersons are necessary (not paid, not Vorwerk employees)：
Kobold owns 2000 employees, 14,700 direct salespersons.
Thermomix has 3,400 employees and 45,000 direct selling salespersons.
JAFRA has 2,000 staff, 57,2000 direct salespersons.
Lux Asia Pacific has 2,000 employees, 320 direct salespersons.
Is Vorwerk worth the price?
There are several considerations as to products.
1.Product quality
Some Vorwerk models are made in Shanghai, featuring best-in-class quality and materials.
2.Technology
This stick-type vacuum features a smaller motor power (usually 400-700W, 700W for VK200), lower than that of traditional horizontal-type vacuum (usually 1400W-2000W for horizontal-type vacuum of Miele, another premium vacuum brand). Vorwerk shows no technology superiority.
3.Price
Given heavy spending on direct salespersons, direct sellers’ prices usually go far beyond brand and quality premium. A good case in point is Kobold vacuum selling for GBP 5,000 at least (around RMB 15,000 with all accessories included), far higher than it should.
Sales Channel:
Vorwerk products are merely sold by salespersons, not available online or at stores (some stores have been opened in recent years, mainly for price anchor, not a mainstream sales channel). With a set of promotion skills and verbal tricks, sales people will easily persuade consumers unfamiliar with the market into buying.
They will offer dust removal, floor cleaning, anti-acne and other services in free cleaning initiative. Potential clients will be informed that service like this usually charge several hundred yuan, and buying one machine will pay off in the long run.
A latent rule exists in direct selling——salespeople themselves largely contribute to overall sales.
All in all, Vorwerk products are less cost efficient and Chinese consumers are more inclined to reject direct sellers.
