Introduction: What Exactly is Direct Selling?
Direct selling is the practice of promoting and selling a product or service directly to a
consumer outside of a traditional retail setting (like a customer's home, place of
business, etc.) through personal explanation and demonstration. It's been around for a
long time and is very much like the standard retail setup for everyday items, making it
one of the earliest forms of commerce.
Scope of Direct Selling: A Step Towards Global Penetration
Direct selling is a growing and innovative method of promoting goods and services to
consumers. A direct salesperson's ability to explain and demonstrate a product's
benefits to a consumer is a major factor in the success of direct sales. Since it is a
unique
distribution method that falls between wholesale and retail, it encompasses both B2B
and B2C transactions.
Direct selling shares many similarities with more conventional forms of marketing
consumer items, despite its unique characteristics. In either instance, the distributors or
direct sellers might earn a commission on product sales, and this commission can be
based either on the individual's sales or on the group's total sales, just like in
traditional
sales situations.
Evolution of Direct Selling Market Globally
Direct sales generally depend on the explanation and demonstration provided by an
independent direct salesperson to the consumer. Direct selling started with hawkers and
peddlers, who traveled great distances to sell unbranded products and services.
The early direct sellers exchanged pottery, stone weapons, tools, agricultural products,
and raw materials with people from other lands. They later evolved into independent
salesmen who went from doo
A Runthrough of the Benefits of Direct Selling
-
Self-employment opportunities and women empowerment:
From around 7.9 million in 2020–21 to 8.1 million in 2021–2022, the number of
distributors in the industry saw a growth of over 2.6 million.* Many people,
especially women, can find work as independent contractors in this sector. The
total number of active direct sellers in FY21 grew 6.32 percent to 7.9 million
against 7.4 million in FY 2019-20.* "In terms of the gender ratio of Direct
Sellers,
the industry currently comprises 53 percent of male and 47 percent of female
active Direct Sellers,"as per the report.*
- Increase in product reach to Tier II, III & rural
areas:
Nearly 70% of
India's population lives in rural areas, but only 34% of FMCG is sold there.* As
a
result, many direct selling businesses are broadening their scope and
penetrating
Tier 2 and Tier 3 urban centers and rural areas to educate consumers about their
products and services. Because of the consistent high quality and low price
points, the direct selling channel has seen a rise in the volume of products
sold.
- Sourcing from SMEs leading to growth and
technology
percolation:
When producing goods in India, many direct selling organizations work with
contract manufacturers who are mostly Micro, Small, and Medium Enterprises
(MSME). More than half of direct selling organizations' product sales in 2011
were from small and medium-sized enterprises (SMEs).* Many times, the direct
selling corporations teach the SMEs their cutting-edge production methods and
technologies. Many direct sellers also put money into helping small and
medium-sized enterprises (SMEs) get the machinery and tools they need to get to
work.
-
Contributions to social causes:
About 81% of direct selling enterprises in the
organized sector participated in CSR initiatives in the past year.* . Typically,
businesses will donate up to 1% of their annual profits to charitable causes.
- Contribution to exchequer:
Direct sales produce tax revenue at every stage of
the supply chain because of the business model. Driven by the increasing share
of
middle income households and the potential for increasing penetration, the
direct selling market in India has the potential to reach INR 645 billion by
2025.*
Direct Selling: A Global Perspective
The direct selling sector in China has experienced explosive growth since 2006 and
continues to do so now.* The current rate of industrialization in China is 2%, which is
twice as high as India's current rate of 0.8%. Direct sales have a far larger share of some
other Asian markets, such as Indonesia, Japan, and South Korea. With 4.3%, Malaysia
has the highest direct sales penetration in all of Asia. At 0.4% of retail sales, India has
one of the lowest penetration rates for direct selling among comparable economies.*
Why is Direct Selling Becoming Popular Worldwide?
These are the key growth drivers that make direct selling popular across the globe:
- Increasing Personal Disposable Income:
Thanks to booming economic
activity, the average Indian family can expect to see their annual income double
from their current earnings. Rising employment has boosted consumer spending,
which has boosted sales in the direct selling sector.
- Urbanization and Lifestyle Changes:
It is projected that a significant
percentage of India's population will live in urban regions by the mid years of
this
decade. Direct selling products, such as packaged food, cosmetics, and home
appliances, should see increased demand due to their convenience and ability to
improve consumers' quality of life.
- Significant rise of women in urban workforce:
The percentage of working
urban women in India climbed exponentially with the passage of years. Having
more money available to spend is a direct outcome of more women entering the
labor force.
- The expanding scope of direct selling:
Expanding into Tier 2 and Tier 3
cities as well as rural areas, Direct Selling companies aim to educate consumers
about their products and services. Increases in the volume of products sold
through the direct selling channel are a direct outcome of the company's efforts
to
maintain both high product quality and reasonable costs.
Conclusion: Mi Lifestyle Marketing Private Limited as a Leading Direct
Selling Company in India
Creating an enabling environment for the industry, and mitigating some of the
challenges it is facing today, may be necessary for the direct selling
industry
to reach
a size of INR 645 billion by 2025,* driven by growth in consumer markets and an
increase in the penetration of direct selling to globally comparable levels. The sector has
been affected, and this is now seen as a major threat to expansion.
The goal of Mi Lifestyle Marketing is to provide the greatest
items directly to
the
customers, who are the foundation of the business. Our authorized distributor networks
are run by trained leaders and representatives who make sure customers get
high-quality products and free business opportunities.