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Sep, 10 2012

REACHING DIRECTLY FOR HIGH REWARDS

If you are a housewife and desire to earn from home without sparing time to work in an organisation, here is the gateway gateway to a high rewarding home-based business. Read on to know the facets of direct selling business that happens to be pocket-frien

DIRECT selling is one of the fastest growing non-store retail formats, recording a double-digit growth in the post-reform period in India. Almost 80 per cent of the consumers of this sector come from families belonging to the middle income group with monthly household incomes between Rs 10,000 and Rs 40,000.

The industry has displayed a robust growth over the years, with the organised sector within the industry accounting for Rs 37,500 million and the unorganised sector contributing to Rs 3,700 million.

An expanding market

A growing Indian market in this sector has attracted a large number of Indian and foreign direct selling companies lately. Major players in the market believe that India, with its large population and increasing per capita income, presents an attractive opportunity for companies to roll out.  According to the reports of Indian Direct Selling Association (IDSA) and PHD Chamber in 2010-11, the sales of direct selling companies in India, including Amway, Oriflame, Avon, Mary Kay, Modicare and Tupperware, were estimated at Rs 5,229 crore, while the sector is expected to reach a market size of Rs 10,843 crore by 2014-15.The business of direct selling in India is said to encourage women in particular, with high-end beauty and healthcare products as well as highly rewarding business opportunities with minimal investment. Also, a large number of direct selling companies have ventured into the Indian market with a large array of quality products.

Shedding light on the market size, Asha Gupta, Managing Director, Tupperware, says: “With a market size of approximately Rs 4000 crore, the industry of direct selling has gained a niche over other retail segments.  Innumerable benefits, including high profits, low investment and the comfort of home are attracting more and more women to get associated with the industry. Regular education by brands is opening avenues for women entrepreneurs while increasing the number of distributing agents.”

A rapidly growing healthcare and personal care market in India is paving the way for the influx of both indigenous and foreign brands in the sector of direct selling.

Says Manisha Amol, Vice-President, Marketing, Modicare Ltd: “The USP of Modicare is its world class quality products and an innovative business opportunity for anyone who wants to start her own business. It gives one the flexibility of working hours and one can do this business even by sitting at home. Modicare's compensation plan gives a better opportunity to new consultants and business builders to get rewarded on the basis of the effort that they put in.”

Proliferating business portfolios

Direct selling business has set its footprints in the market with its four different product categories in health and personal care, household goods and consumer durables. In the recent years, the direct selling business in health and personal care has shown a robust growth of 74% and 66%, respectively. Increases of 24% and 12% have also been noticed in the segments of household goods and consumer items, respectively.

Talking about India, the Southern part remains the hub of the direct selling business, closely followed by Western India. Smaller towns and cities are relatively emerging as key markets of the overall industry value. Adapting to the newer trends of the markets and making their services available at rural junctions, various direct selling brands have built strong advertising and web-based networking too.

For instance, Modicare has adopted a multi-level marketing model and provides benefits to individuals who desire an opportunity to earn an income and build a business of their own. It also offers an alternative to traditional employment for those who desire a flexible income earning opportunity to supplement their household income.

“Modicare offers freedom and flexibility of doing the business of direct selling in the comfort of one's home and within the network of people. It does not require one to really go out for selling products and there is no huge cost involved to start. All one needs to do is to organise home meetings and gatherings at their own places inviting their close friends, relatives and neighbours,” says Manisha.

According to an IDSA report, the strong growth trajectory and turnover of the Indian direct selling industry will reach to Rs 7,100 crore ($1,580 million) by 2012-13. Exhilarating revenues from tier-II and other cities have taken the average percentage growth from 14 % of the overall market in 2008-09 to 38% till date.

Asha also believes in low investment benefits of the direct selling business. “Anyone can become a distributor for Tupperware by purchasing an introductory sales kit which is quite reasonably priced. There is no need to bear any other hidden cost to become a representative of the brand,” she says.

Merits of the model

The main reason for the interest of the fairer sex in direct selling opportunities is their extensive use of healthcare and beauty products. Women distributors are giving a boost to brands to sell cosmetic and beauty products.

According to Asha, the direct selling of products has a definite advantage over any other business model. “Through direct selling, the customers are educated, explained and demonstrated in detail the benefits of a product as per the product's portfolio,” she explains.

Emerging trends

With positive vibes emanating from the business of direct selling, both foreign and indigenous brands are adopting advanced methodologies. To ascertain higher rewards and maximum benefits, regular meetings on large basis are organised, one- to- one interaction with brand's personnel and foreign trips to explore new avenues and opportunities have constituted the curriculum of direct selling techniques.

Referring to the emerging trends, Asha says: “As compared to yesteryears' direct selling techniques, we have now adopted more advanced methodologies for improvised and enhanced networking. Special training sessions are held from time-to-time. Workshops on network building, effective communication and personality development have been incorporated in the schedule of our annual programme.”

However, the government is actively considering setting up a regulatory framework for direct selling in order to protect consumers from fraudulent players in the market.

Business requisites at a glance

The business of direct selling is highly rewarding with low investment and no pre-requisite qualifications. To become an agent or a distributor of any direct-selling brand, one should be above 18 years of age.

People aspiring to associate with the business of Modicare can start by enrolling with a minimal amount of Rs 399, which allows them to get the entire start-up kit required for the business. There are no criteria for full-time and part-time; earnings depend on how much time one devotes to the business.

Similarly, for the business of Tupperware, one has to shell out only Rs 700 for the start-up kit with no additional enrollment fee or miscellaneous charges. The brand also gives flexibility of time to work and an opportunity to earn through strong networking. The brand has also initiated a campaign, in association with media partners- 'She Can, We can'- to encourage more and more women to get associated with it.

It is worth noting that anyone with good communication skills and a convincing personality can successfully run the business of direct selling. Also, for personal growth and development of skills of agents, companies conduct workshops and training sessions at regular intervals.

Overcoming hurdles

While a large number of direct selling companies have ventured into the Indian market with a wide array of products and services, retaining further chain of distributors poses a challenge that pushes direct selling a step behind other business models.

“The major challenge faced by investors in this industry is how to retain their downlines and new joinees and also constantly motivate them. The problem is further compounded by the fact that very often individuals leave networks taking their entire team with them. But this can be easily taken care of by getting in touch with your teams on a regular basis and by ensuring that your new joinees personally use all the products and attend all the meetings and trainings.” Manisha says. A report of Ernst & Young on the Indian direct selling industry shows that nearly 70 per cent of distributors and representatives in the direct selling business are women.

Tupperware, which offers opportunities exclusively to women, is facing the problem of less support to distributors from their families. Gupta says: “Direct selling is a home- based business and women participate in this business more than men worldwide. Our products come in handy for every woman who is working in kitchen and is cooking everyday. But the lack of family support and liberty to do a part-time business is making it difficult for our distributors to succeed. Due to family commitments many of our representatives have to skip training sessions and workshops, hampering their skills.”

Aspirations for future

With 47 centres catering to 2,700 cities in India, Modicare boasts of a stronger presence in Southern and Eastern Markets. The brand is now seeking expansion and is adding new and unique products on a monthly basis to their product portfolio. “As a company we have seen a double digit growth in the last two years but we expect a much higher growth in the coming years. We are striving to reach a target of Rs 500 crore in the next 3 years,” says Amol.

Tupperware, with several training centres and regional offices in tier I and II cities, is now looking forward to rolling out in semi-urban and rural areas.

Benefits of direct selling business for women

  • Use of world class quality products
  • Low risk, low investment involved
  • Anyone above 18 years eligible; no restrictions of education, qualification or previous experience
  • Flexibility of working hours & comfort of doing business from home
  • Benefit of additional income
  • Incredible rewards, recognitions, foreign trips, etc
  • Helps in polishing communication skills, enhances personality & empowers women

mway India Enterprises is among the strongest players in the industry of direct selling business that came into existence in Michigan (USA) in 1959 but entered India in 1998. The brand offers a wide range of health and beauty products, along with high rewarding business opportunities to its distributors.

Mary Kay Cosmetics Pvt Ltd is an American brand that entered India in 2007 with the aim of enriching the lives of Indian women. It sets a perfect example of home-based direct selling business with its highly flexible work schedule and opportunities for women. The brand marks its presence in more than 35 markets across the world with its quality products and rewarding business opportunities.

Oriflame India Pvt Ltd, a Swedish brand of beauty products, forayed into India as a direct selling cosmetics company about a decade ago. The brand, with its high-end beauty products, boasts of 3.6 million independent consultants around the world.

Avon Beauty Products India Pvt Ltd is another brand that falls under the segment of direct selling that kicked off in 1996. More than 60 lakh representatives are associated with the brand as distributors all over the world.

In 1996, Modicare Ltd joined the bandwagon of direct selling business with its large range of skin care and cosmetic products, and is offering business opportunities to women till date.

Jafra Ruchi Cosmetics India Pvt Ltd is another name in beauty business in India, which has made its mark in the arena of direct selling.

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