With per capita income in India constantly on the increase and middle class families having more disposable income in their hands, the direct selling industry in the country is expected to reach Rs.5,320 crore by 2012-13, up from Rs.3,330 crore in 2008-09, according to a new survey by global consultancy firm Ernst & Young. The direct selling industry could help in women’s empowerment as almost 70 per cent of the people employed in the sector are women, it says.
“Overall direct selling industry grew by 17 per cent in 2008-09, while a 10-15 per cent annual growth is expected for the overall industry in the next 1-2 years. While the growth now is mainly confined to metros, future growth in direct selling is also expected to be driven by the emerging markets in tier I and II cities,” says the survey conducted in association with India Direct Selling Association (IDSA), self-regulatory body for the direct selling industry in India.
According to Ernst & Young Partner (Retail and Consumer Product Practice) Pinakiranjan Mishra, “More than money, this mode of marketing needs a lot of learning and communication. Besides, direct selling has become an additional source of income for several families. So the market is here to grow.”
Over 2 lakh every year
The survey shows that over 18 lakh people are employed as sales consultants and 2.2 lakh more are added every year. “This industry, where over 70 per cent of those employed are women, can become a major force behind women’s empowerment,” he added.
IDSA chairman and Oriflame India managing director Fredrick Widell said they have been urging the Government of India to formulate a policy or come out with some kind of legislation to regulate the fast-growing direct selling market, which is turning out to be a major employer.
“Like other Western markets where direct selling is being properly regulated and there are strong legislations to protect the interest of consumers as well as companies, India also needs to adopt a similar mechanism to ensure a healthy growth of the sector and check spurt of fly-by-night operators whose unscrupulous ways hurt the industry,” he added.
Pointing out that health products have emerged as a leading product category in the direct selling space, Mr. Widell said: “At this time of the global economic slowdown, this market has grown because of the good growth of the health sector, which is largely recession-free.”