Direct selling sector may touch Rs 159bn by 2021, needs reforms

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NEW DELHI: India’s direct selling industry is expected to touch Rs 159.3 billion by 2021 but certain reforms are required for sustainable growth, according to a study by industry body Assocham.
The direct selling industry has almost doubled since 2011 to reach Rs 126.2 billion in 2016, it said.
To further the growth of the industry, the Assocham study suggested relaxation under Foreign Direct Investment policy, enactment of Consumer Protection Bill and some amendment to the Prize Chits and Money Circulation (Banning) Act.
While GoI has come out with guidelines for the sector, the study pitched for certain other reforms to ensure conducive environment for direct selling entities for implementation of the guidelines at state level.
“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,” the study observed.
According to the study, the industry is “the most misunderstood and unacknowledged business activity” despite substantial growth over the years and a number of ways in which it has contributed to Indian economy. The main reason for the same is the use of networking and schemes through which the activity of direct selling is undertaken, it added.
The average sales of each participant in India is about Rs 20,000 per year, while the global average is about Rs 10,000 per month, it said, adding that there is more scope for growth.
The sales in the direct selling sector in India is dominated by consumer health segment, closely followed by beauty and personal care segment. In India, the direct selling industry has existed for several years, but the entry of global companies during the last five years has accorded greater visibility to this industry, which is still in a nascent stage, the study added.

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