Indian Direct Selling Grew by 6.5% In 2014-15

Indian Direct Selling Association (IDSA) in association with PHD Chamber of Commerce and Industry released the Annual Survey Report 2014-15 on the Indian Direct Selling Industry.

The highlights of the report are:

Gross sales stand at INR 79,583 million ($1.18 billion) in 2014-15 as against INR 74,722 million (($1.11 billion) in 2013-14.
The Industry has registered a growth rate of about 6.5 per cent in 2014-15 as compared to 4.3 per cent in 2013-14
Wellness and healthcare products contributed the largest share at a total of 42 per cent of the sales revenue of direct selling, while the cosmetics and personal care products contributed 34 per cent, homecare products, 11 per cent and consumer and household durables seven per cent.
While there is a 6.5 per cent growth in the direct selling industry all over the country, Southern India has recorded a negative growth of 1.8 per cent, owing to loss of consumer confidence due to fraudulent practices.
Northern region has contributed around Rs.2,388 crore ($356 million) to the gross sales in 2014-15, registering a growth rate of 10 per cent.
Eastern and North-Eastern regions have contributed around Rs.1433 crore ($213.5 million) and Rs.1035 crore respectively to the gross sales, registering growth rates of 6.5 per cent and 15.4 per cent respectively.
The Western region has contributed around Rs.1273 crore ($190 million), with a growth rate of 6.4 per cent.
The total tax paid by the IDSA Direct Selling Entities (member) amounts to INR 11,715 million ($175 million) in 2014-15 as against INR 10,631 million in 2013-14.
The tax paid as reported by the IDSA Direct Selling Entities (member) has increased to 10.2% in 2014-15 over 2013-14. The direct taxes have increased to INR 3,550 million in 2014-15 from INR 3,179 million in 2013-14. While indirect taxes have scaled up to INR 8,165 million in 2014-15 from INR 7,452 million in 2013-14.

The survey report was unveiled by Rajat Banerji, Chairman of IDSA and Vivek Katoch, Treasurer of IDSA along with Dr. SP Sharma, Chief Economist, PHD Chamber, Bejon Misra, International Consumer Policy Expert, Anil Reddy Vennam, President, Federation of Telangana and Andhra Pradesh Chambers of Commerce & Industry and M. Venkateshwarlu, President, Telangana Chambers of Commerce and Industry.

Civil Supplies Commissioner Dr. Rajat Kumar said, “Direct Selling has huge potential. It is due to lack of clarity in law we haven’t had faster growth. However it has addressed the issues of employment and gender to a great extent as 60 percent of the self-employed direct sellers are women. The industry has contributed significantly to women empowerment, skill development and the Make in India policy of the government.”

Dr. Rajat Kumar also felt that lack of policy framework to govern the direct selling sector has become a bane for the industry.

“Confusion of definition has actually killed the golden goose. You need to engage with the government”, he said. “The Telangana Government is working on a forward looking, progressive policy. We have been in discussions within the government and hopefully in the next six months a clear set of guidelines and policy framework for Direct Selling in the Telangana state will be announced,” he said

Anil Reddy Vennam, President, Federation of Telangana and Andhra Pradesh Chambers of Commerce & Industry said, There is demand from the Industry Associates to bring about regulatory clarity to build an environment of trust in order to reap multiple benefits that the industry has to offer.

“Due to lack of regulatory framework and some unfortunate incidents in the country, the Industry has witnessed a decline in the number of Direct Sellers from 43,83,287 in 2013-14 to 39,29,105 in 2014-15. However, the industry still has witnessed growth, which proves that this distribution model is gaining popularity among the consumers”, Rajat Banerji pointed out.

India’s Direct Selling Industry has registered a modest recovery in 2014-15 as compared to the previous year. IDSA in collaboration with PHD Chamber, as an ongoing process, has benchmarked monitoring of the Direct Selling Industry in India. These statistics are one of the imperatives from World Federation of Direct Selling Association (WFDSA).