1. What does direct selling entail?
Direct selling is a means of sellers marketing and selling goods and services to customers without any intermediary involved and mainly through word of mouth and peer-to-peer transactions. While the goods sold are typically unique products under the company brand, the traditional methods such as brick-and-mortar stores or malls are not used to sell or showcase them.
2. When did Direct Selling come to India?
In India, direct selling first made its presence felt in the late eighties but picked up steam about a decade later. Since its inception in 1998, QNET was among the earliest companies in the direct selling industry to have integrated e-commerce into its business model.
3. Who is the regulatory authority for direct selling in India?
The Ministry of Consumer Affairs is the governing body behind the direct selling guidelines and rules to be followed by direct seller and their intended buyers in the country.
The industry is regulated under the Consumer Protection Act and numerous Indian direct selling associations act as a go-between linking direct sellers and the concerned government departments.
4. How does direct selling encourage the entrepreneurial mindset?
Those with an enterprising attitude who wish to start a business venture will find apt opportunities in direct selling platforms such as QNET. The additional advantage here is they get to minimise their operational costs and outflows.
The wide range of products supported by the QNET direct selling platform has been a boon to millions of distributors and merchants who have been able to fulfil their entrepreneurial ambitions as a result.
5. How did the direct selling industry fare globally over the last 12 months?
As published in the 2023 report by the World Federation of Direct Selling Associations (WFDSA), worldwide, the direct selling industry achieved retail sales of around $173 billion in 2022. The top 3 highest-selling product categories included Wellness, Cosmetics and Personal Care, and Household Goods and Durables.
6. Is India’s direct selling industry growing? What were the numbers the industry achieved last year?
India’s direct selling landscape has seen noteworthy progress as the country climbed to the 11th position among the leading direct sellers’ market globally. According to this WFDSA report, it made retail sales of $3.23 billion for 2022. Another statistic that indicates sunny days for the industry in India is it recorded an impressive CAGR in excess of 13.3% in the last three years.
India had around 84 lakh direct sellers in FY2022 with a male-to-female ratio of 56 to 44%.
7. What are some of the most important market drivers in the Indian direct selling industry today?
Technology and innovation-led strategies will be pivotal for the modern Indian direct seller/entrepreneur, who needs to embrace these developments to offer customer-centric products and services.
This is because the typical Indian consumer has changed in many respects. Today’s consumers are less ready to compromise on the quality of brands, and more influenced by social media trends and perceptions. They also show greater consciousness towards health and wellness and a marked preference for premium products. Those from the middle class can now command greater purchasing power than before. With e-commerce and online shopping becoming more convenient, overall spending patterns have altered dramatically.
With these market trends in mind, QNET is keen on making continuous improvements and innovations to the products and services offered on its direct selling platform.
8. Name the highest-selling product category in the direct selling industry.
According to Statista, in 2022, Wellness products took the lion’s share as the most popular category in the direct selling market with 30% of the overall sales. The second-biggest was Cosmetics & Personal Care claiming 23%.
9. What are some of the most significant changes witnessed in the Indian direct selling industry?
The direct selling market in India recorded a 4% CAGR during the period 2012-2014. However, its healthy CAGR of 13% in the last five years shows there has been impressive improvement in the way it has grown both consistently and sustainably. One of the reasons for this is attributed to the Direct Selling Guidelines launched in 2016 and the Direct Selling Rules that followed five years later.
The world is moving to digital and so must the focus of sales. Direct sellers must accordingly change their marketing strategy to drive home the importance of digital sales and use persuasive tools and collateral like presentations etc. which clearly articulate the compensation structure to their prospects.
On the back of these changes, the competitive environment is hotter than ever. At the same time, the continued presence of numerous, small but viable brick-and-mortar shops and retail outfits makes for stiff offline competition to direct sellers. In fact, direct selling companies face indirect competition from brands on the same channel as well as on other channels.
10. What are the ‘Direct Selling Guidelines’ of 2016?
The Direct Selling Guidelines of 2016 refer to specific guidelines and regulatory measures defined for India’s direct sellers. These have been stipulated by the Indian Ministry of Consumer Affairs, Goods and Public Distribution. These Guidelines were later regularised as “Consumer Protection (Direct Selling) Rules” by the ministry by end of December 2021.
The earlier Guidelines are elaborated here.
11. What are the key factors that might impede the growth of the Indian direct selling industry?
Although direct selling in India is making inroads in the domestic and international arenas, there are certain impediments preventing its expansion in a full-blown manner. For example, Ponzi and Pyramid schemes still exist and are often mistaken as another form of direct selling. For consumers to steer clear of such bogus schemes and for the reputation and interests of the genuine direct selling industry to be protected, greater awareness and stronger laws are necessary. The industry must be defined without any ambiguity and supported by clear legal and regulatory measures and guidelines.
12. What are India’s future prospects in direct selling? Why direct selling?
Recently, the WFDSA reported that in 2022, India had achieved a remarkable INR26,852 crores in retail sales and continues to be a promising player in the global market with an equally impressive 13% CAGR.
The direct selling future in India by 2025 promises to be bright as the market size is predicted to reach INR64,500 crore by then. (Source: FICCI-KPMG research)
Two major contributors to this prospective growth have been increasing awareness and consequently, a more favourable outlook from consumers with regards to the industry.
More industry trends featuring the Indian landscape are available here.
13. How can millennials and individuals from India’s middle classes avail the direct selling opportunity?
As the world’s most populous country, India is home to a massive talent pool as well as a youthful population. At the same time, there is a skills gap that is emerging because job opportunities around advancing technologies require a different skillset from what is currently available.
This is raising concerns over employability for a large portion of the working population in the country. In fact, this National Sample Survey found that only about 10% of a total population of 470 million who are eligible to work, have access to training or opportunities for professional employment.
Amid this scenario, the fact that India’s retail and e-commerce market is booming provides an optimistic outlook for the individuals in the working population. This sector has been instrumental so far in the way it enables income-generation opportunities, especially for those who are millennials or hail from the Indian middle class with entrepreneurial ambitions. The direct selling guidelines that have been implemented in recent years will also promote their interests as these provide a strong regulatory framework for direct selling companies in India.
14. What is the role of the Consumer Protection Act in direct selling?
When the Consumer Protection (Direct Selling) Rules for the industry came into force in 2021, it was accompanied by several reforms that aimed to stabilise and strengthen the growth journeys of direct selling businesses. State governments had to implement these guidelines and recommendations in accordance with the Consumer Protection Act which falls under the purview of the Department for Promotion of Industry and Internal Trade.
15. Is direct selling legal in India, and what are the regulatory guidelines that are applicable?
Yes. Direct selling companies have been considered legal in India as per the Direct Selling Guidelines that were set forth by the Indian Ministry of Consumer Affairs, Goods and Public Distribution in 2016, and later the Consumer Protection (Direct Selling) Rules, 2021
This was a pivotal move as it gave state governments a ready set of guidelines to help regulate direct sellers, who will, in turn, have stronger mechanisms in place for selling. One of the primary objectives of such regulation will be to detect and prevent illegal transactions/activities and ensure the consumer’s rights and interests are not violated in any way.
16. What is the QNET direct selling opportunity?
QNET welcomes those who want to venture into business on their own and offers them the perfect kick-start to their entrepreneurial journey with sound career choices in direct selling. To date, QNET has launched millions of such dreams including helping distributors access a vast network and platform to fulfil their ambitions and potential in this industry.
Distributors have been able to survive and thrive in uncertain times during recent years been stable, irrespective of the lockdowns. In India alone, QNET has welcomed more than 500,000 Distributors into its fold.
To explore the QNET entrepreneurial opportunity in detail, visit the QNET India page. To understand how to guarantee direct selling success while navigating through market trends and demands, read this article.
