Top 4 Trends to Look Out for Direct Selling Business in 2022

Shalmoli Sarkar — Tue, 01 Feb 2022 08:35:12 +0000

The catastrophe caused by the outbreak of the virus has plagued the businesses in India , not leaving direct selling business an exception to it. Despite the unprecedented challenges laid by the first wave, the vaccination drives brought an air of positivity and the industry remained resilient despite its own set of challenges. The sector according to the industry body IDSA has clocked a double-digit growth of 28.26 percent to Rs 16,776.2 crore in FY 2019-20 against Rs 13080 crore in FY 2018-19. The grim times of the second covid wave also could not deter the growth that made the direct selling business grow by 4.7 percent to touch a sales value of Rs 7518 crore. According to a joint report by the FICCI-KPMG report, the industry currently pegged at approximately Rs 16,000 crore is projected to become Rs 64500 crore by 2025. Here are some of the trends that direct selling businesses can expect in 2022.

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According to a joint report by the FICCI-KPMG report, the direct selling business is currently pegged at approximately Rs 16,000 crore is projected to become Rs 64500 crore by 2025.

The trends that a direct selling business can look for in 2022

An alternate source of income: There has been a loss of livelihood and paycuts in the pandemic, which made direct selling an alternate source of income for sustainability. According to a recent report by Indian Direct Selling Association (IDSA), the industry witnessed 53 lakh, new entrants, during April-September 2020 period. With no minimum qualifications, zero seed capital, and flexible working hours, direct selling became an alternate and popular source of income while handling a full-time job. Therefore, direct selling businesses will get more independent sellers.

More sellers from tier-II and III cities: Increase in disposable incomes and aspiring to live a better life is paving the path for demand and supply for direct selling business in smaller towns.IDSA in its annual survey has found Assam alone contributing for Rs 771.6 crore which is 47 percent of the total revenue of North East India’s direct selling market, which shows that the demand for tier 2 and 3 cities will grow and will present more business for direct selling businesses.

Digital adoption: Since it does not require any pre-requisite skills to become an independent seller, the use of digital or virtual tools or technology is alien to them, which is a challenge for businesses. Here are the four platforms that are underutilised by the businesses:

CRM system provided by the Company
Resource sharing platforms such as Google Suite
Meeting tools such as Zoom, Skype, etc
Marketing platforms such as Facebook, Instagram, etc.

Right now businesses must impart training on the usage of the platforms to their network of independent sellers.

Good news for health and nutrition businesses: Health and immunity will assume greater importance and would witness traction. The first half of the pandemic hit 2020-2021 made sales of Rs 7518 crore, with most sales brought in by the health and nutrition businesses followed by cosmetics and personal care followed by household goods and durables segment. According to IDSA, 55 percent of the gross direct selling turnover comes from the wellness category.

Thus, the direct selling business will be a fast-growing sector in times of adversity, the industry will be providing an alternate career to millions. Therefore, it will be a win-win situation for businesses to invest in training the sellers on social media marketing, usage of virtual technologies, etc. to increase customer base.

The post Top 4 Trends to Look Out for Direct Selling Business in 2022 appeared first on Dutch Uncles.

Highlights of Tamil Nadu’s Direct Selling Guidelines

Shalmoli Sarkar — Sat, 03 Apr 2021 10:35:04 +0000

Tamil Nadu, a place with diverse manufacturing has brought out several guidelines and compliance for effective running of Direct Selling businesses in India. Below are the guidelines of Tamil Nadu’s for Direct Selling companies as per Tamil Nadu Direct Selling Guidelines dated 2018:

The Direct Selling company is mandated to provide information to the consumer upon purchasing which shall contain the name of purchaser and seller, delivery date of goods or services, procedures for returning the goods and warranty of the goods and exchange or replacement of defective goods.

Any business owner who wishes to sell either by offline or by an e-commerce platform / marketplace , the Direct Selling company owner must take written consent from respective Direct Selling Entity in order to undertake or solicit such sale or offer.

No company under the disguise of direct selling business will promote a pyramid scheme i.e. recruiting members via promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products.

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Direct selling is a relatively new business model in India that has generated self- employment opportunities for 5 million people out of which 60 percent are women as per a report from KPMG.

It is mandatory for the businesses to have a complaint number for tracing and tracking the complaint and keep records of time taken for redressal of complaints received over phone, email, website, post and walk-in.
Direct selling businesses should provide prospective consumers with accurate and complete explanations and demonstrations of goods and services, prices, credit terms, terms of payments, return policies, terms of guarantee and after sales service.
The companies shall maintain a proper book of records mentioning the details of the products, price, tax and quantity.
There will be no unfair recruitment practices by display of misleading sales information or potential earnings of direct selling.
There will be prior permission taken to visit the customer’s premises for selling directly and it is mandatory for direct sellers to carry identity cards.
The direct selling businesses shall maintain a proper and updated website containing relevant information of entity, management , product information, product quality certificate , complete income plan, terms of contract with direct seller and complaint redressal mechanism for direct seller and consumers. It is compulsory for the sellers to create a space in the website for registering consumer complaints and should ensure complaints are attended within 45 days of registering complaints.

What is in it for the startups?

The businesses that will operate under direct selling model must adhere to the direct selling guidelines set by Tamil Nadu government. The direct selling sector in India has been in the limelight for several reasons due to several lawsuits that have been registered in the past. Direct selling is a novel business model in India that has generated self- employment opportunities to 5 million people out of which 60 percent are women as per a report from KPMG. But there exists a lack of clarity on the legislations governing the industry, due to which often direct selling companies are mistaken to be fraud involved in pyramid or Ponzi schemes and eventually have been harassed in the past from police and local state government. Such incidents tend to hinder the growth of the industry eroding customer trust and confidence.

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