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What Is The Future Of Direct Selling In India? [A Complete Guide]

Sukanya Mukherjee -
  • India is the second-highest populated country in the world, comprising one-fifth of the youth population.
  • It has a rapidly growing appetite for financial independence.
  • In a developing country like India, people are always looking for opportunities to earn and build their businesses.
  • The direct selling industry is the people's industry.
  • The concept of direct Selling was first introduced in the United States.
  • At first, when it was introduced, it had many drawbacks.
  • It has gone through a lot of tough times to reach the level where it is now.
  • At present, it is practiced in more than a hundred countries around the world.
  • The business model of direct selling is quite intriguing, as it provides employment opportunities while eliminating middlemen and wholesale retailers.
  • In India, direct selling was first introduced in the late 1990s, when companies like Amway and Oriflame launched their operations.
  • These companies have followed the best industry practices, making them run a successful business.
  • These companies are leaders in the market, creating millions of well established direct sellers across the country.
  • Indian direct selling companies like Vestige and Tupperware, introduced in the early 2000s, also gave tough competition to other companies in the market.
  • They employed many women, leading to the creation of a large pool of talented sales professionals.
  • The direct selling industry has led to increased referral marketing, network marketing, and multilevel marketing.

What is Direct Selling?

  1. Direct Selling is a retail medium used by well known global brands, small entrepreneurs, and companies to market their product and service to the consumer.
  2. All types of goods and services are marketed by direct sellers, such as jewelry, cosmetics, housewares, insurance, and energy.
  3. Direct Selling is about getting great products and services into consumers' hands using an avenue where people can work independently to build a business at a low cost.
  4. Direct sellers work on their own.
  5. They have a strong personal relationship with prospective customers, which is built through face-to-face discussions and demonstrations.
  6. In the era of social networking, direct selling is a go-to-market strategy.
  7. For some companies, it has been more effective than traditional advertisements or securing premium shelf space.
  8. Millions of people around the world are involved in direct selling because they enjoy independence.

Advantages Of Direct Selling

  • The growing Indian market has developed a lot of direct selling companies.
  • The various benefits of direct selling are mentioned below.

Women Empowerment

  1. The direct selling industry contributes to empowering women in terms of financial independence.
  2. Companies like Amway, Vestige, and Tupperware are hiring mostly women and training them, making them the largest workforce in the direct selling industry.

Consumer Benefit

  • The consumers of the products sold by direct sellers benefit from the direct sellers' convenience and service.
  • They get the benefit of proper personal demonstration and explanation of the product being sold.
  • Sometimes, to attract more customers, the sellers offer home delivery.

Direct Selling Is An Alternative To Traditional Employment

  1. Direct selling opportunity can act as a fulfilling career for people who want to achieve success and pursue their independent direct selling business on a full-time basis.
  2. It is a flexible opportunity for people looking to earn household income or who do not have permanent employment.
  3. The startup cost in Direct Selling is typically low.
  4. People have to incur little to no inventory cost or other cash commitments at the beginning of the business.

Direct Selling Is A Plus Point To The Economy

  • According to the socio-economic studies of various markets, direct selling creates a positive benefit to the economy.
  • Direct Selling offers quality products to consumers.

Direct Selling Is More Reliable

  1. Gone are the days when buyers used to bluff about a product in short-term selling, especially in India, where consumer redressal forums cannot solve the large volume of complaints quickly and effectively.
  2. Here direct selling company comes to the rescue, as the seller cannot bluff about the product.

A Contribution Towards The Skill India Initiative

  • The direct selling industry is a labor-intensive industry.
  • The goods produced by these industries are sold by independent business owners, leading to the creation of professionals out of the unskilled laborers.

An Opportunity For The Make-In-india Initiative

  1. The direct selling industry is supplying more technology in the country, leading to better production of goods.
  2. Direct selling manufacturers create a pool of resources for the economy.

Predicted Future By Experts

  • According to the experts of KPMG, the direct selling industry in India has the potential to touch Rs.64,500 crore turnover by the end of 2025 from the current Rs.7200 crore.
  • Currently, India has a direct selling market GDP ratio of 0.2 to 1.2, which has a huge potential to grow.
  • The Indian direct selling market is dominated by segments such as cosmetics, wellness, and personal care.
  • By the end of the year 2025, the Indian middle class's disposable income is expected to grow at 2.5 times the current rate, leading to an increase in the purchase of more products and services.
  • Currently, around 5.8 million people are involved in the direct selling industry, which is likely to increase and become 18 million by the end of 2025.
  • A significant part of these direct sellers is women.
  • The predicted number of women involved in this industry could increase to 10.6 million by 2025, according to a report by KPMG, which is a huge number in a country like India, which has always been dominated by men.
  • Direct sellers are looking out for changes in the regulatory framework that governs these industries.
  • Once there is a change in this regulatory framework, the direct selling industry would have a huge potential in a developing country like India.
  • The industry is growing at a rate of 13-15% every year.

Also Read:

1) What are the keys to success when operating a small scale business?
2) Top-20 small-scale businesses you should take a look at!
3) Why do so many small businesses fail?
4) How To Start A Furniture Business Online?

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FAQs

Q- Which is the best direct selling industry in India?

  1. According to the experts, Amway is currently the best direct selling industry in India, followed by Vestige and Oriflame.
  2. Amway was established in 1959 by Jay Van Andel and Richard DeVos.
  3. Amway is a member of IDSA.
  • It is a 100% legal business in India.
  • In September 2016, the government issued proper guidelines relating to direct selling business in India.
  • The Direct Selling Association has been set up by the government which is a self-regulatory body controlling direct selling around the country.

Q- What are the kinds of products that can be purchased through the direct sales channel?

  1. Cosmetics and personal care products, household items, and wellness are powerful sectors in Direct Selling.
  2. Other product categories include food, beverages, nutritional products, jewelry and clothes, books, toys and games, and home improvement products.

Q- What is the main point of difference between direct selling and multilevel marketing?

  • Direct Selling refers to a distribution method where goods and services are distributed, eliminating the middlemen.
  • Multi-Level marketing refers more particularly to a type of compensation plan found in direct selling methods.

Q- As a direct seller, what are the main responsibilities?

  1. Responsibilities include providing accurate and truthful information to the customers about the company and the product, charging accurate prices, and providing quality products.
  2. A proper receipt must be provided to the customers.
  3. Contact information must be provided to the customers so that they can contact in case of any support.

Q- What qualification does one need for becoming a successful direct seller?

  • There is no particular qualification required by a direct seller.
  • They must have excellent selling skills, motivation skills, leadership skills, and a basic understanding of finance.