Direct selling potential in TN pegged at Rs 80 billion

The direct selling industry in India is currently reckoned at INR75 billion, one of the fastest growing non-store retail formats, recording double digit growth of more than 16 per cent over the past four years. At a CAGR of 14-17 per cent, Tamil Nadu has been one of the fastest growing direct selling states in India between FY10 and FY14. 

Speaking at the launch, Rajat Banerji, Chair – FICCI Direct Selling Task Force tells us, “For the last three-four years, the Task Force has been working to bring to the notice of policy makers, the idea of directly selling and how it impacts the economy. In September this year, the Ministry of Consumer Affairs, Govt of India issued guidelines for this industry. As internal trade is a State subject, it is now our task to re-engage various states in discussion to take this forward. FICCI is looking to work with the Government of Tamil Nadu to speed up regulations for the industry.” A major player in this sector, Amway had set up their manufacturing operations in Madurai, with an investment of around Rs 500-600 crore, a year ago, considering South India comprises one of its biggest markets.  

Members of the panel also pointed out that the industry was instrumental in helping tip the scales in favour of women when it comes to equitable employment options, especially in rural pockets. Reeta Harsh Thakkar, Additional Commissioner of Industries and Commerce, Government of Tamil Nadu, said, “Women constitute a dominant force in the direct selling industry worldwide and Tamil Nadu is no exception. Women empowerment is a key focus area for the Government of Tamil Nadu and hence the direct selling industry was bound to do very well in the state.” 

She went on to add, “Direct selling poses less strain on the national infrastructure and allows a direct interface between the consumer and the brand, even before the product is purchased. Direct Selling also offers the option of a parttime and a full-time employment, which was not the case in other sales jobs.” Despite the advantages, the industry had not grown to its desired potential. And the reasons have been narrowed down to some failed enterprises and their questionable policies. 

Panellists also mentioned that direct selling industry was contributing significantly in sectors such as wellness, healthcare, cosmetics, beauty products and home improvement products. Summing up, P Murari, IAS (Retd), Advisor to the President of FICCI and formerly Secretary to the President of India, said that the increasing sales of established brands will eventually lead to establishment of manufacturing operations by global brands.