India's direct selling industry bucks pandemic to grow 10 percent in FY21

Indian Direct Selling Association (IDSA) Vice President, Rajat Banerji, said that in the first six months of FY 2020-21, the direct selling industry in India registered a growth of 4.7 per cent over the corresponding period in FY 2019-20.

"Building on the same trend, it can be safely assumed that direct selling industry should be able to register a growth in excess of 10 per cent during the FY 2020-21," he said, adding that clarity will come only when the official numbers are released.

As per a survey by the industry body in the Q1 of FY 2020-21, the industry was able to register a growth of 0.90 per cent.

While the first quarter of FY 2020-21 was largely impacted by the different phases of lockdowns, despite of all the challenges, the industry was able to register a minuscule growth, it showed.

However, with the start of Q2 as the government started to give more relaxations for carrying out commercial activities, the industry responded positively as well, resulting in the Q2 of FY 2020-21 registering a growth of 9.25 per cent over Q2 of FY 2019-20, Banerji said.

The growth in the industry was largely driven by the increase in sales of wellness and personal care segment products, he noted.

Proveda Marketing India Managing Director Aseem Sood highlighted the significance of digital channels.

"When the country went into lockdown, and a new normal came into existence, we moved towards digital ways to promote our products and business plan. We ensured home deliveries and digital training. Overall, we grew by 300 per cent in the previous year and this year we are growing comparatively at a faster rate," he said.

Sood said that at present the market size of the direct selling industry in India is Rs 16,000 crore and is expected to become Rs 64,500 crore by 2025.

On the recently-proposed norms for the direct selling industry by the government, he said that it is step in the right direction to promote businesses and the draft rules will take direct selling businesses to new heights.

"We are relieved that at least now the government is taking care of direct selling entities and securing the future of the sellers and everyone associated with the industry," Sood said.

Describing the development as a positive step, Banerji said that there are some minor issues that which the industry body has with the government and it would welcome a dialogue with the ministry concerned.

"Registration of each direct seller could be a challenge, but should that be non-negotiable, industry will certainly do all that is necessary to follow the law and rules," he said.

"Needless to mention, the initiation of this process has sent a positive signal to all entities, intermediaries and people associated with the industry. India would join the list of countries that have clear regulations for the direct selling industry."