Direct Selling has now been in India for more than the last two decades. But it prominently came to the fore during the Covid-19 pandemic. Most companies and industries struggled to sustain their revenues and operations due to the economic recession that set in due to the pandemic. The Direct Selling Industry, also referred to as Multilevel Marketing (MLM) or Network Marketing or Referral Marketing, stood out during the pandemic. This article discusses how the Direct Sales Industry is shaping up India’s economy and its benefits compared to retail marketing.
Direct Selling V/s Retail Sales
Direct Selling is the sale of a product or a service directly to the consumer without any intermediaries or physical stores in between. In simple terms, Direct Selling can be defined as a person-to-person sale. Direct Selling companies deliver their products or services at the doorsteps of the consumer rather than making the consumer come to any location to make their purchase.
Retail, in contrast to Direct Selling, takes place in a particular location. Unlike Direct Selling, Retail makes consumers go to a store to make their purchases that are on display in the stores. The store is present all the time. Unlike Direct Selling, Retail does not involve selling at parties or making any sales call.
Direct Selling Industry – Generating Self Employment
Since its advent in India, Direct Selling companies have enabled people to earn and become financially independent. But it was during the deadly Covid-19 pandemic that Direct Selling companies prominently came to the fore.
Direct Selling companies provided livelihoods to millions who lost their jobs or were compelled to take a salary cut due to the economic recession that set in following the onset of the Covid-19 pandemic. It showed people the way to achieve financial independence and become entrepreneurs.
How Direct Sellers Earn by Partnering Network Marketing Companies
When you join hands with a Direct Selling company, you are known as Direct Seller, Distributor, or Network Marketer. You earn an attractive commission when you sell the company’s product or service. You are also incentivized for recruiting more salespeople. The salespeople recruited by you are placed under you – popularly referred to as your downline. You earn a percentage of the commission on sales by your downline and its downline too. This earning is known as residual income, and you earn it without any effort of yours!
Government Boost to the Network Marketing Industry
The unemployment crisis compounded the economic recession after the onset of the Covid-19 pandemic. To tackle this crisis, the Government of India took several initiatives to boost the industry.
For example, initiatives like Make in India, Vocal for India, and Startup India aimed to make India self-reliant under the slogan Aatmanirbhar Bharat. And initiatives like Women Empowerment aimed to make women financially independent, and Skill India to develop skills of individuals to enable them to be job-ready for various industries.
Direct Selling Industry – Aligning with Government’s Initiatives
You should note that the workforce employed by the Direct Selling Industry comprises more than 50 per cent of women. That’s well in line with the Government’s push for Women Empowerment.
Further, the Direct Selling companies impart training to their Sales Representatives that make them ready to rock in the marketing world. That’s well in line with the Government’s initiative of Skill India.
And selling products manufactured in India, Direct Selling companies nicely align with the Make in India initiative. Along with it, achieving the Government’s vision of Aatmanirbhar Bharat.
Government Boost to Industry & Regulations to Safeguard Investor Interests – Augurs Well
Further to boosting the Network Marketing Industry with several initiatives, the Government has also looked into the grievances and interests of investors wanting to join Direct Selling companies.
The Indian Government has drafted regulations that make it mandatory for Network Marketing companies to register with a governing body. The Government has further made it compulsory for companies to have a permanent address in India.
Companies that operate under the guise of an MLM company but implement the pyramid business model will subsequently be considered illegal.
With the interests of investors taken care of and the industry boosted with several initiatives, it is a win-win situation for the Direct Selling companies and those who join them as Distributors.
Direct Selling Industry – Flourishing with Time
In Direct Selling, Distributors replace retail stores in the supply chain and personally offer goods to their customers. Direct Selling companies sell items like jewels, clothing, houseware, cosmetics, and services like insurance and more. The Direct Selling channel offers a great opportunity for you to build a business with a low startup and overall cost.
The Direct Selling Industry in India is growing and flourishing. It is reflected in its continued growth rate that is climbing at an impressive rate of 12.1 per cent Year-on-Year.
The Indian Direct Selling Industry is currently ranked 15 globally. And it is expected to employ more than 18 million by 2025.
As per industry estimates, the Direct Selling Industry is poised to grow at a Compounded Annual Growth Rate (CAGR) of around 4.8 per cent. It is expected to reach INR 15930 crores by the end of 2021.
Direct Selling Statistics & Facts – Pointer to Direct Selling Industry’s Dominance Ahead
The Indian Direct Sales is going to be one of the fastest expanding sectors. It has significantly contributed to the Government’s revenues during the unemployment and economic crisis and will continue to do so in the years ahead.
As per KPMG and FICCI, the Indian Direct Sales Industry will expand to INR 645 billion by 2025. The study further notes that the Direct Sales industry registered more than 16 per cent growth over the last five years.
Worldwide Direct Selling Updates
As per the World Federation of Direct Selling Association (WFDSA), in 2019-20, around 120 million people are working in the Direct Selling Industry worldwide. Around 44 million work part-time in the Direct Selling sector. And more than 15 million of those people have taken Network Marketing as their career.
Another interesting statistic to note, worldwide, the Direct Selling Industry comprises 74 per cent of women and 26 per cent of men. And 60 per cent of the inactive people are solely into the business to buy products for their own use!
Direct Selling Industry will Play a Major Role in Building India’s Economy
In line with the Government’s Vocal for Local initiative, the Direct Selling companies have encouraged Indians to buy and explore products manufactured in India. It has helped to boost the local manufacturing units.
In line with the Government’s vision of Aatmanirbhar Bharat (Self-reliant India), the Direct Selling companies have instilled a sense of ownership and determination amongst their Distributors to succeed. Indeed, the industry is promoting micro-entrepreneurship and livelihood opportunities to many.
The number of Direct Sellers in the financial year FY2018-19 was more than 5.5 million. This figure is set to grow exponentially to more than 18 million by 2025. Indeed, the Direct Selling Industry is proving to be an employment generation machine for the Government.
In line with the Government’s Women Empowerment initiative, the Direct Selling Industry has empowered women significantly since its inception. Today, more than 2.0 million women are part of the workforce employed by Network Marketing companies. And many of them have gone on to become successful entrepreneurs.
Direct Selling to be Part of Academics in India
In India, the career option list is long; It includes professions in medicine, engineering, accountancy, management, and more. An addition to the already existing long list is now a career option in Direct Selling.
Sensing the excellent prospects of the Network Marketing Industry in India, the Indian Direct Selling Association (IDSA) and Shoolini University jointly have taken the initiative. They have launched a ‘Center of Excellence for Direct Selling in Academics’ (CEDSA). It will impart a year-long PG Diploma in Direct Sales beginning in the academic year 2021-22.
What Makes the Direct Selling Business Attractive?
The rise of the Direct Selling Industry has taken the world by storm. Ever wondered what has made Direct Selling so popular and go on the rise? Well, it is quite simple to answer the question and acknowledge its growing impact.
Joining a Direct Selling company involves low risk compared to starting any other business. Even the startup costs involved in joining the business is negligible.
When you join a Direct Selling company, you pay a small fee to buy a one-time sales package which is part of your sales kit, and you get complete support and training from your company.
A Direct Sales business gives you a sense of ownership and encourages you to operate as per your own rules and during convenient hours.
Direct Selling can also be considered part-time work. Wouldn’t generating some extra income be better than wasting time gossiping or watching TV? Further, you always stand a chance to transform your part-time business into a big venture.
Make an Informed Decision when Choosing Your Network Marketing Company
We have seen so far how Direct Selling benefits the company, the Government, and you. We have seen how Direct Selling will play a prominent role in shaping the economy of India in the days to come. However, when choosing a company to collaborate with, you need to make an informed decision. It would help if you verified its existence and credibility. You need to ensure that it complies with all Government guidelines and regulations. You need to ensure that the company you partner with does not incorporate the illegal pyramid business model. It would help if you were comfortable with selling the products or services of the company. And finally, you should be satisfied with the compensation plan offered by the company. If you consider all these points and choose your company accordingly, you are well on your success path.
Conclusion: There is a future in India for Direct Selling; go for it.
There are no criteria required to join a Network Marketing company. You do not need a hi-fi qualification, nor any previous experience. Whatever your gender or socioeconomic background, anyone can join a Direct Selling company.
However, the Network Marketing business is not a get-rich-quick scheme. It will help if you put in hard and smart work. If done the right way, you are bound to succeed.
To succeed in the Direct Selling business, you need a passion for sales and good communication skills. Meeting people and making friends with them is a big plus. However, this is not to scare you. Your company back you to the hilt. Your company will ensure that you succeed in your goals. After all, your success is theirs too! You can take up the Direct Selling business part-time by continuing with your current job, or you can join the company on a full-time basis. The choice is entirely yours. Most people join on a part-time basis, and once their business grows, they give up their job. Your decision is in your hands. Go for it and see your life change for the better. Owning your own business will enable you to be your own boss!
