The Direct Selling industry in India has almost doubled since 2011 to reach Rs 126.2 billion in 2016 and is expected to grow at a compounded annual growth rate (CAGR) of about 4.8% to reach Rs 159.3 billion in 2021, reveals the study undertaken by ASSOCHAM.
The average sales of each participant in India is about said USD 300 per year, that is Rs. 20,000, where the global average is about USD 1,700 per participant per year, or about Rs. 10,000 per month, reveals the ASSOCHAM paper.
“Direct selling opportunities can be enhanced in India provided we create a conducive environment which is protecting all the stakeholders within the framework of the regulatory framework,” adds the study.
The Direct Selling industry’s contribution to the country can be mapped to various schemes introduced by the Government of India in the past two-three years. The industry has been playing a significant role in Skill India initiative by imparting soft skills, marketing and leadership trainings in its network. It has also contributed positively to several other flagship schemes launched by Government of India like Make in India, Digital India, Startup India and Women Empowerment, noted the study.
Despite substantial growth over the years and a number of ways in which it has contributed to Indian economy, this industry is the most misunderstood and unacknowledged business activity.
In majority of cases (of course where credible entities/ promoters are involved) such network marketing schemes are means to increase the expanse of business. However, the public has been on receiving numerous unscrupulous schemes where people have lost money, credibility, honour and livelihood, noted the study.
Though the guidelines received the overwhelmed response within the industry, there are certain other reforms which needs to be restructure to ensure a sustainable operating environment for the Direct Selling entities need for implementation of guidelines at state level, need for relaxation under the Foreign Direct Investment (‘FDI’) policy, enactment of Consumer Protection Bill and need for amendment under the PCMCS Act.
Apart from the minimum cost and low risk involved in direct selling, the popularity of this model stems from the fact that entrepreneurs engaged in direct selling are able to provide a personal touch to their interactions with customers through personalised and custom-made demonstrations and in turn, expand their professional network of contacts.
The sales in the direct selling sector in India is dominated by the consumer health segment, closely followed the beauty and personal care segment. Food and beverage category in direct selling registered strongest value growth of 34 per cent during 2014-2016. Wellness and healthcare category is emerging as a clear winner in direct selling industry with significant growth year on year.
In India, the Direct Selling Industry has existed for several years, but the entry of numerous international companies, during the last five years has accorded greater visibility to this industry, which is still in a nascent stage. According an Annual Survey 2015-2016, it is estimated that over the past five years, about 5,00,000 people benefited from the opportunities offered by the industry.


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