Direct selling is a growing and exciting industry that works on sales of products or services offered directly to customers from the entities without entailing the services of traditional retailers and the conventional distribution chain that supplies it to them. Here, the idea is to create awareness and sales without having to conventionally market and advertise the products independently. Instead, the distribution rights are given to the end consumer who will act as the brand ambassadors for the products creating “word-of-mouth” through their own personal use of the products. Apart from personally retailing the products, these distributors also have an option to recruit and train other associates to create a distribution network with the objective to generate sales and spread word of the products. Each distributor is compensated fairly based on the compensation plan of the company where they earn income based on the revenue generated from the sales of products and services directly as well as from the distribution channel built through them.
Direct selling is an avenue where entrepreneurial-minded people can work independently to build a business with low start-up and overhead costs. Direct selling distributors work on their own, but affiliate with a company that uses the channel, retaining the freedom to run a business on their own terms.
As per industry estimates, the Direct Selling industry in India, which currently ranks No. 12 globally, is expected to grow at a Compounded Annual Growth Rate (CAGR) of about 4.8 percent to reach INR 15,930 crore by 2021. This proves that the Direct Selling Industry is flourishing and illustrates its potential with the continued rate of growth – increasing at an impressive rate of 12.1% Y-o-Y.
Initiatives like 'Vocal for Local' and 'Aatmanirbhar Bharat' encouraged Indians to explore the option of buying and selling locally made products via the direct selling route, which entails low investments and high returns. This not only boosted local manufacturing but also established a sense of ownership as well as determination amongst budding entrepreneurs to succeed. In India, the Direct Selling industry has provided additional income opportunities to its people and has significantly promoted micro-entrepreneurship. In FY 2018-19, there were 5.7 million direct sellers. These numbers are projected to grow exponentially to 18.1 million by 2025.