Direct Selling Industry Growth In India Is Slowing

William Pickney,COO,Amway India


The direct selling industry, which is facing challenges in the Indian market due to regulatory issues, has witnessed a reduced 4.3% growth in 2013­-14 compared to 12.2% in 2012­13 fiscal, says a report. Gross sales stood at Rs 7,472.2 crore in 2013­14 while the industry had posted a growth of 12.2% in 2012­-13 with sales amounting to Rs 7,164.1 crore, said a report issued by industry chamber PHD in association with the Indian Direct Selling Industry (IDSA).

The direct selling industry has registered growth rate of about 4.3% in 2013-­14 as against the growth rate of 12.2% of 2012-­13, 22% of 2011-­12 and 24% of 2009-­10, the report said.

Although the growth rate in India is on a decline in the past three fiscal years, on a global basis the direct selling industry has grown over 8% in 2013, it added. The North region accounted for 29% of sales ­­ the highest level ­­ with an increase of 12.2%, followed by South region with 25%. However, the South region saw a drop in sales.

Southern region, which was earlier our main base, is not doing well due to lack of clarity on the policy for direct selling. In state like Kerala, direct selling has stopped, said IDSA Secretary General Chavi Hemanth.

Products related to healthcare/wellness contributed 44%, followed by cosmetic and personal beauty with 33% and 12% respectively, the report added.

IDSA members companies have paid tax amounted Rs 1,063 crore to the exchequer for year 2013­-14 has, she said. Presently, India has a direct seller base of 62,37,373 and out of that 43,83,487 are active, which is around 70%. Women contributed 58.3% in FY 2013-14 and share of men increased to 42%. However, globally contribution from women is around 80%, Hemanth added.

The report further said Bengaluru was the most attractive market for the direct sellers followed by Delhi, Ludhiana, Mumbai and Jaipur. According to the IDSA Chairman, untoward incidents have severely impacted the sentiment of industry players. The association is seeking a policy framework for the direct selling industry and exclusion from the PCMC (Prize and Money Circulation schemes) Act. Following Prime Minister Modi's invitation to 'Make in India', IDSA has targeted reduction of its import to 10% by fiscal 2019-­20 from existing 30% levels.

Amway India is one of the companies that continues to face strong regulatory challenges. 


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