The success of direct selling companies such as Amway, Tupperware, Oriflame, QNet, and Herbalife Nutrition is partly reflected in the increasing employment numbers that such companies generate. Close to five million people are currently employed by this sector. Women contribute 53 percent of entrepreneurs engaged in the $1.5 billion direct selling industry in India, a report by the World Federation of Direct Selling Associations said.
Amway India will invest $14 million over the next two to three years in its direct selling business. This includes a $9.7 million R&D spend for product innovation, three to four million dollars in digital initiatives, and $1.4 million for plant automation and power optimization.
Amway introduced its Preferred Customer program for those who want Amway products for themselves and not for reselling them. The company’s ‘digital first’ approach to bring in young buyers will be implemented in India and internationally.
A report by trade body FICCI and its partner predicts that with adequate regulatory support, retail sales in direct selling could reach $8.9 billion by 2025 and provide self-employment opportunities to 18 million Indians, of which 60 percent could be women. FICCI formed a Task Force on the Direct Selling Industry and organizes an annual conference on the industry; details can be found here.
Government of India’s Ministry of Consumer Affairs, Food & Public Distribution issued a “Model Framework for Guidelines on Direct Selling” in Fall 2016, but states have been slow to adopt these guidelines. Several direct selling firms welcomed the guidelines, saying the government’s move would filter out fraudulent players and aid serious companies to grow.
Wellness and healthcare products account for 42 percent of direct sales revenue, with cosmetics and personal care products contributing 34 percent, home care products 11 percent and consumer and household durables seven percent. Direct selling companies import fewer goods as they develop local sources of supply.
