Direct Selling, also referred to as Multilevel Marketing (MLM) or Referral Marketing or Network Marketing, is a retail channel used by many global brands and entrepreneurial companies. But what is the changing perception about the future of direct selling in India.
It is interesting to note how the role of marketing and product design has evolved over the years. And with it, the perceptions and behaviours associated with Direct Selling too have changed.
Direct Selling has been primarily involved in door-to-door or person-to-person sales. However, the advent of affordable and easily accessible Internet and the advancements in technology has changed the way Direct Selling is done today in India. This article discusses the changes that have taken place in the Direct Selling industry. It also discusses how the perception about Direct Selling companies has changed.
A Brief About Direct Selling
The Direct Selling business is a win-win option for the Direct Selling Companies, the Direct Sellers, and the Consumers. Even the government of India benefits – it earns substantial revenue from the Direct Selling companies.
Direct Selling companies hire consultants, popularly known as Distributors or Direct Sellers or Network Marketers, but not directly on their payrolls. It enables them to spread the word about their business without spending on expensive advertisements. It also helps them to avoid overhead costs.
The Direct Sellers collaborate with a Direct Selling company and have the freedom to run their business on their own terms. They have the liberty to work during convenient hours. And they have the liberty to work from anywhere – yes, even from the comfort of their homes!
Direct Sellers earn attractive commissions and incentives for the sales they execute and new salespeople they recruit. Further, the Direct Sellers also earn a residual income. It is an income earned without any efforts by them – they earn a percentage of the commissions on the sales done by the salespeople recruited by them, popularly called downline in the Direct Selling world.
Direct Selling in India Till a Few Years Ago
In the years bygone, Direct Selling was always considered as a side job to earn some extra income. It was never seen as a full-fledged career option. And that was mainly due to the various scams that jolted the Direct Selling industry in the absence of any laws, rules or regulations from the government of India.
Many companies started their operations as MLM companies by incorporating the illegal pyramid business model. These companies duped innocent investors and vanished in no time. It discouraged many from joining MLM companies, and even those who joined hands with Network Marketing companies did so knowing very well that they were taking a big risk.
Direct Selling – Changing Times. Changing Perceptions.
Gone are the olden days when people were reluctant to join a Direct Selling business. The changing times have changed the overall perception of the Direct Selling industry.
It started with the Indian government stepping in to boost the industry. It came up with initiatives like Make in India, Startup India, Women Empowerment, Skill India, and Vocal for Local. It then went a step ahead, it drafted regulations to safeguard investor interests.
As per new government guidelines and regulations, companies that incorporate the pyramid business model are illegal. It has made it mandatory for all Direct Selling companies to register with a governing body and have a permanent office address in India.
The Direct Selling industry welcomed the steps initiated by the government. People who were reluctant to join hands with a Direct Selling company were now encouraged to step into the Network Marketing world confidently.
Direct Selling also came into the limelight during the Covid-19 pandemic. How? Let us find out more in the section ahead.
How the Covid-19 Pandemic Brought Direct Selling to the Fore
The deadly Covid-19 pandemic disrupted normal life. It submerged economies worldwide into a recession. It increased the unemployment woes the world over.
The frequent strict lockdowns implemented by the government of India confined people to their homes. Most industries struggled to sustain their operations and, with it, their revenues. Many people lost their jobs and struggled to meet two ends meet.
Most companies remained subdued across industries during the pandemic. The Direct Selling industry stood out. It grabbed the opportunity knocking at its door. It leveraged technology and the Internet and increased its eCommerce activities.
Tech-savvy consumers who could not move out of their homes were glad to purchase orders for their daily needs and essential requirements online. And they were excited to get them delivered right at their doorstep.
Further, Direct Selling companies provided livelihood opportunities to millions who lost their sources of income. As per a FICCI-KPMG report, the Direct Selling industry in India has grown by more than 15 per cent in the last five years. And the industry is poised to reach INR 645 billion by 2025.
Direct Selling in Academics is an Addition to the List of Career Options
The implementation of a PG in Direct Selling in academics has changed how people perceive Direct Selling. Direct Selling is no more looked down upon as a side job or a hobby. Today, budding entrepreneurs look up to Direct Selling as a full-time career.
People are today getting attracted to Network Marketing and find it appealing. They foresee Multilevel Marketing as an option to attain financial freedom and become future entrepreneurs.
Men are into Direct Selling too! Direct Selling is Online too!
All along, Direct Selling was perceived prominently as a door-to-door or person-to-person sales model. It was perceived as more of a home-based business more suitable for women. The data emanating from the Direct Selling industry supports this theory.
Yes, more than half the workforce by the Network Marketing industry comprises women. And that’s very much in line with the government’s initiative of Women Empowerment. But times have changed. Many who lost their jobs during the pandemic or earlier due to the economic crisis have shifted their attention to Network marketing.
Men are also now finding the Direct Selling business a better means to be self-employed. They are finding it a better means to attain financial freedom and become entrepreneurs. Today, many men are joining Direct Selling companies and look at it as a livelihood option to support their families.
Also, today the Network Marketing business is run using online ways. It has come a long way from the traditional ways in which Direct Selling was done. Today, Direct Sellers no longer have to take the pains to travel for meeting their prospects or customers. They now connect with them using online video conferencing tools or smartphones.
Using Social Media Platforms in a Big Way has become the Norm Today!
The changing times have ushered in newer platforms for marketers to trend. Apart from big Multilevel Marketing companies, Direct Sellers also use their social media profiles for Direct Selling.
When restaurants and hotels were closed during lockdowns, many ventured into the food business and sold their dishes via FB and Instagram platforms. It also became a good medium for Direct Sellers to showcase their products and increase their reach and visibility to prospects and customers.
Today, a lot of self-employment are generated by the Network Marketing industry in India. Direct Selling has become popular and attractive to many due to the low risk involved in it. Further, owning a business that promises high returns with low investment appeals to many energetic wannabe entrepreneurs.
Network Marketing has Evolved.
One cannot deny that the Covid-19 pandemic has been instrumental to a great extent in redefining and reshaping the Direct Selling industry and its existence.
Network Marketing, over the years, has undergone a revolution. The channels and strategies used to market a product or service have changed significantly.
Whereas traditional Direct Selling sent direct mails, used print newsletters, or distributed catalogues in bulk, modern Direct Selling uses digital marketing channels.
Whereas traditional Direct Selling deployed costly telemarketing and involved longer campaign cycles, modern Direct Selling though haven’t revamped telemarketing totally, have shifted seamlessly online.
eCommerce is not expected to slow down anytime soon. And in-store retail sales are predicted to decline. Social selling that is a boon to marketers will continue for a long time to come.
The social distancing norms have disciplined consumers in exercising caution when shopping or visiting close contact services. It will enable to increase the demand for Direct Selling methods.
Conclusion: Traditional Multilevel Marketing has undergone a dramatic transformation.
Modern Direct Selling is today perceived as coming a long way over the traditional Direct Selling ways. Today, direct selling is dramatically transformed; it implements marketing ways that use advanced technology and leverages the Internet. It has allowed the Network Marketing industry to stay relevant in today’s changing marketplace.
The perception of Direct Selling in India has undergone a big change too. Government boost to the industry and initiatives to safeguard investor interests have encouraged many to embrace Direct Selling.
Further, the introduction of Direct Selling in academics has attracted budding entrepreneurs to consider Network Marketing as a full-time career option. Though there is little research done in Direct Selling, technology and social media have changed the Direct Selling industry for the better. The transition from traditional Direct Selling to present-day Direct Selling gives distributors and customers a pleasant experience. The changing perception of the future of Direct Selling in India augurs well. Go ahead, and step in with confidence.
