Direct selling industry likely to top Rs 53,200 mln

The direct selling industry is expected to reach Rs 53,200 million by 2012-2013. The Indian Direct Selling Association (IDSA) in association with Ernst & Young has released an Annual Survey 08-09 on the Indian direct selling industry which aims to assess the current state of this industry in India and most importantly to identify the contribution it makes to the economy. The survey indicates that the total market size of Direct Selling Industry grew by 17% in 2008-09, to reach Rs 33,300 in 2008-09.

Fredrik Widell, Chairman, IDSA and Regional Director South Asia & MD, Oriflame India informed, "Direct selling companies have been active in contributing to the social and economic development of the country, with over Rs. 3,700 million paid as taxes to the Government exchequer by IDSA member companies alone".

Mr Pinakiranjan Mishra, Partner & Industry Leader, Retail & Consumer Product Practice, Ernst & Young adds that ' Comparing India with other similar developing countries such as Malaysia, Thailand, Indonesia, etc, indicates that while India has a significant number of consultants involved in direct selling, the revenue generated out of the network is still low. Therefore an increased focus on new and emerging product categories, growth in depth and breath of distribution along with improved productivity of the sales consultant network will help to boost the growth of this industryu2026

Chavi Hemanth, Secretary General, IDSA says, "With over 13 years of activity in India, direct selling has emerged as a predominant medium for the sale and marketing of product and services across a range of consumer needs, with the associated industry encompassing a size of Rs. 33,300 million for the year 2008-09". She further added "IDSA collaborated with Ernst & Young in creating a report on the direct selling space in India.u00a0 This joint effort will act as a valuable tool for facilitating effective communication and awareness creation about the direct selling activity in India to the key stakeholders, media and Government and eventually highlight the attractiveness and potential of this industry to the overall Indian economy".

Objective of the Survey:

The 2008-2009 survey on the direct selling industry conducted by Ernst & Young in close collaboration with the Indian Direct Selling Association (IDSA) aimed at assessing the current state of the direct selling industry in India across several key parameters encompassing revenues, sales force employed, product category coverage, distribution reach and most importantly the contribution of this industry to the government exchequer. The Report also addressed points like challenges faced by this industry and the overall future outlook.

u00a0Methodology of the Survey:

To obtain a comprehensive perspective of the direct selling activity, an exhaustive list of companies across product categories and services was first compiled. Subsequently, a total of 50 companies representing the industry universe were selected in consultation with IDSA, taking into account parameters such as revenue, size, product category coverage and acceptance for participating in the interaction.

u00a0Key activities in the interaction process ranged from preparation of the questionnaire to verification of the survey findings along with top management personnel and also key inputs from experts in the direct selling industry

Fredrik Widell, drawing attention towards global trend of the direct selling industry, said, "The domestic direct selling market might sound optimistic with over 17% growth this year but when India is compared to the top 25 countries internationally for direct selling activity, we see that in terms of the number of sales consultants involved, India ranks 11th but in terms of the total industry size, India ranks a distant 23rd internationally". However, we are positive that India will long term be a major player in the world Direct Selling industry. We are confident and adamant in together with the Government regulate the industry so that only serious companies offering high quality products/services with a clear focus on end consumers & consultants are operating in India