With a developing economy, and growing consumerism, various store and non-store formats have evolved to cater to the growing retail sector in India. The direct selling market at INR72 billion (2012-13) is one of the fastest growing non-store retail format, recording a double digit growth of more than 20 per cent over the past five years. The growing Indian market has attracted a large number of local and foreign direct selling companies.
Though direct selling is a relatively new industry in India, in less than two decades it has provided self-employment opportunities to more than 5 million people, out of which nearly 60 per cent are women. Besides providing additional income opportunities to direct sellers, the industry also generates direct employment. Majority of the direct selling companies outsource production, packaging and distribution of their products, thus generating direct employment across the value chain while enabling the development of the SME sector. The industry also contributes to the exchequer and in 2012-13 alone the industry generated INR10 billion in taxes. Many direct selling companies have been in the forefront by actively contributing towards social activities.
However, there has been a lack of clarity on the legislations governing this industry. We strongly believe that a clear distinction between fraudulent companies and legitimate businesses should be drawn.
Direct selling in India
Modern direct selling can be considered to have been kick-started in India in 1980s. The industry witnessed major growth post-liberalisation with many global players entering the Indian market. Amway was one of the first major global direct selling companies to enter India in the year 1995, whichwas followed by companies like; Avon, Oriflame and Tupperware in 1996.
Around the same time Modicare was one the first few Indian companies to adopt this channel of distribution.
Today, the direct selling market in India is estimated to be around INR72 billion. Our interactions with industry stakeholders suggest that the industry has also created a positive impact on several other social and economic parameters:
Direct selling provides additional income opportunities to a large number of people and promotes micro-entrepreneurship. Currently, over 5 million direct sellers are estimated to be engaged with the industry, and are projected to grow further with the growth of the industry. In addition to providing income opportunities, direct selling also imparts transferable skills in sales and management, which can be used outside the direct selling industry, as well.
Direct selling offers self-employment opportunities to a large number of people, especially women. Direct selling gives women the flexibility to manage their time and balance their work and personal lives. The industry in FY13 is estimated to have provided self-employment to 3.4 million female distributors. Many companies work towards the empowerment of women.
Many direct selling companies rely on SMEs for manufacturing their products. In a lot of cases, the direct selling companies impart the manufacturing know-how, technology and processes to enable the SMEs to produce excellent products. Many direct selling companies also invest in providing the right equipment and machines to the SMEs for production. Driven by these initiatives, several SMEs have now developed capabilities to cater to the needs of other MNCs and have commenced supplying to them, in the process promoting India as a manufacturing destination.
Besides providing additional income opportunities to direct sellers, the industry also generates a large number of jobs. Majority of the direct selling companies outsource production, packaging and distribution of their products, thus generating direct employment across the value chain.
In terms of responsibilities towards society, direct selling companies have been in the forefront. Many of the companies involved in direct selling actively contribute towards social activities. Avon’s Breast Cancer Crusade and Amway’s Sunrise project for education are well known for their social impact.
QNET is a leading multinational company in the e-commerce direct selling space, with its head quarter at Hong Kong and business operations in more than hundred countries.
In India the company operates through its sub franchisee Vihaan Direct Selling (India) Pvt. Ltd based at Bangalore. The company has several products in different categories viz., Skin care, Home care, Nutritional supplements, Lifestyle products (watches) and Vacation packages. These products are promoted through its Independent Representatives (IRs). A person has a choice of either being just a consumer of the product or become an IR wherein he/ she earns an extra incentive in the form of commission based on sale of products only.
The company has a very transparent business policy and procedure which is available on its website www.qnetindia.net
QNET in India currently has an IR base of approximately 200,000 individuals who follow the business opportunity of QNET.