Opinion

Direct selling industry will play a big role in India becoming self-reliant

Gautam Bali | Updated on June 07, 2021

One of the fastest growing sectors in these challenging times, the industry is providing an alternative career to millions and a lifeline to many families impacted by the pandemic

India and, in fact, the entire world are going through a once-in-a-lifetime crisis and every sector and industry have been struggling to come to terms with the economic and social impact of this pandemic. However, the direct selling industry has shown signs of hope in the face of the adversity. It is one of the fastest growing sectors in India even amidst these very challenging times.

This growth has been primarily driven by wellness, nutrition and other FMCG products. There is a huge value that consumers see in categories such as nutritional supplements, immunity boosters as well as hygiene products, and these categories registered far higher sales than before the crisis. This has resulted in significant growth in the last four quarters of the year.

Further, the economic impact of job cuts and losses across various sectors led to the direct selling industry providing an alternative career to millions and helped provide a lifeline to many families impacted by the pandemic. As India moves ahead with its vision of becoming a global manufacturing hub, the direct selling industry is ideally placed to contribute to the vision of becoming atmanirbhar.

The vision for Atmanirbhar Bharat has encouraged Indians to explore the option of buying and selling locally made products via the direct selling route as it entails low investments and high returns for the direct seller. This has not only promoted local manufacturing but has also established a sense of ownership amongst budding entrepreneurs to succeed, besides promoting micro-entrepreneurship significantly.

In these uncertain times, the direct selling industry has redefined and reshaped its operations and organisations to adapt to making paradigm shifts. It has effectively combined the online world with personalised selling, and has used technology interventions in trainings and upskilling to augment individual capabilities. This has proven to further enhance the industry’s effectiveness in providing remote connectivity, and promoting livelihoods in the form of economic inclusion at the grassroots level.

The direct selling industry is proving to be increasingly appealing, as people are exploring new and alternative sources of income that are stable and reliable.

Defining self-reliance

India is one of the youngest nations and, by the end of the decade, India will have the largest working-age population in the world. However, current employment opportunities are far from catching up with this boom. Data from the Centre for Monitoring Indian Economy (CMIE) shows that 37 per cent of people in the 20-24 age group are unemployed. This age group is expanding by 1.3 million per month according to the World Bank's South Asia Economic Focus (Spring 2018) report. This young working populations needs opportunities for their livelihood and if unaddressed the country could witness huge social unrest.

Add to this the reverse migration of millions of migrant workers; the potential of this emerging young talent pool needs to be leveraged for the country’s economic growth. Direct selling can unlock opportunities in these markets and generate sustainable income opportunities, and self-reliance at the grassroots.

The pandemic started a ripple effect of unemployment, salary cuts and job displacement in both the formal and informal sectors. For those affected, direct selling can be an attractive alternative career prospect with additional income, independent of volatile job markets.

Transformational shifts in employment, the introduction of work from home, and online delivery of products and services that have sprung up in the past year, have propelled organisations towards decentralised operations. Direct selling is inherently built on this approach, and its workforce is used to operating off-site. Those involved with direct selling have naturally adapted to the new normal as they have been groomed in the structure much before the pandemic.

Charting industry growth

The inherent adaptability and flexibility of the direct selling sector was amply reflected in the growth of the sector during the pandemic. According to ASSOCHAM, the direct selling industry will reach a value of ₹15,930 crore by end of 2021, up from ₹12,620 crore in 2016.

According to the World Federation of Direct Selling Associations (WFDSA), India saw its total number of direct sellers rise to 5.7 million in 2018-19 and is likely to grow to 18 million by 2025. Women form almost 60 per cent of this sector. It is so heartening that this industry has attracted many women and provided financial independence to millions of families.

As governments across the world discourage citizens from stepping outside, the retail industry is seeing drastic changes. Social distancing will far outlive the pandemic as customers will look for safer and customised service. Direct selling fits the textbook definition of conducting business during the pandemic, and will remain pertinent and possibly grow even after restrictions on movement are lifted in the times ahead.

Building economic sustainability

Direct selling enables entrepreneurship for better economic sustainability and societal impact. It is skilling India to raise the bar not only at economic levels but also in societal standards

Digital India’s alignment with technology is shaping the new norm in the industry. Besides using technology for marketing and distribution, companies are increasingly investing in online training and development tools. These are creating transparent self-sustaining business models in entrepreneurship with better governance.

Indian homegrown direct selling companies are stimulating ‘Make in India’, by sourcing products and recruiting people across India. As a nation, our aim should be to make every industry and sector atmanirbhar, and ensure that every citizen embraces self-reliance. The direct selling industry can be the catalyst for this transformation.

To return to economic stability and growth in the times ahead, we must look beyond the facts and numbers, and be mindful of the human side of our people and our customers. All our initiatives in these tough times must help eliminate fears, build trust, and nurture relationships built on a common understanding and hope for a better tomorrow.

The writer is Managing Director, Vestige Marketing Pvt Ltd

Published on June 07, 2021

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