India’s direct selling industry has nearly doubled since 2011 to Rs 126.6 billion in 2016 and is expected to grow at a compounded annual growth rate (CAGR) of 4.8 per cent to reach Rs 159.3 billion in 2021, a study by industry body Assocham, released on Tuesday, said.
It said the average sales of each participant in India is about US $300 per year.
“Direct selling opportunities can be enhanced in India provided we create a conducive environment which is protecting all the stakeholders within the framework of the regulatory framework,” the study said.
In 2015-16, the country’s ranking improved two places to 20th globally in terms of size of the market, from 22nd in the previous year, the study showed. The top three markets in the segment are the US, China and Korea.
Global retail sales in the industry touched a fresh record of US $183 billion in 2015-16. Growth in sales and number of people joining the industry rose in around 80 per cent of the countries around the world, the study showed.
The study also said despite substantial growth over the years and a number of ways in which it has contributed to Indian economy, this industry is the most misunderstood and unacknowledged business activity.
“The main reason for the same is the use of networking and schemes through which the activity of direct selling is undertaken. In majority of cases (of course, where credible entities/promoters are involved) such network marketing schemes are means to increase the expanse of business. However, India and its public has been on the receiving end of numerous unscrupulous schemes where people have lost money, credibility, honour and livelihood,” the study said.
According to a survey of 2015-2016, it is estimated that over the past five years, about 500,000 people benefited from the opportunities offered by the industry, the report said.
The study attributes the growth of the direct selling industry in India to various government schemes including Skill India, Make in India, Digital India and Startup India.
The study also recommended implementation of guidelines at state level, relaxation in the Foreign Direct Investment (FDI) policy, and enactment of Consumer Protection Bill, among others, to provide a sustainable operating environment for the sector.