IDSA: Direct selling industry grew 12% in 2022-23, crosses Rs 21,000 crore in turnover

The direct selling business in India had a great year, growing by more than 12% and reaching over Rs 21,000 crore in sales. This information comes from a report by the Indian Direct Selling Association and a research firm called Kantar.

Over the past four years, the industry has been steadily growing at about 8.3% every year. Most of the sales come from health and wellness products, making up around 73.5% of the total, while things like makeup and personal care products make up about 11.3%.

There are now around 86 lakh people actively selling these products directly to consumers, which is more than before. The chairperson of the association believes that the industry will keep getting stronger, thanks to supportive rules from the government.

India’s position in the global ranking for direct selling has also improved, now standing at 11th place.

Companies in this industry want clearer rules to separate them from illegal schemes. The government has made some changes to the rules to help with this, but there’s still some confusion, especially around defining certain terms like ‘network of sellers’.

Key Points:

1. Growth in Direct Selling Industry: In the fiscal year 2022-23, India’s direct selling industry experienced a substantial growth rate of over 12%, surpassing Rs 21,000 crore in total turnover.
2. Report Source: The Indian Direct Selling Association (IDSA) released an annual survey report, compiled by market researcher Kantar, providing insights into the industry’s performance.
3. Consistent Growth: Over the four-year period from 2019-20 to 2022-23, the sector maintained a Compound Annual Growth Rate (CAGR) of 8.3%.
4. Product Contribution: Wellness and nutraceutical products constituted the majority share of the industry’s turnover at 73.5%, with cosmetics and personal care products contributing 11.3%.
5. Active Direct Sellers: The number of active direct sellers increased to approximately 86 lakh, indicating a growth from the previous year’s figure of 84 lakh.
6. Outlook and Regulation: IDSA’s chairperson, Vivek Katoch, expressed optimism about the industry’s future, highlighting the supportive regulatory framework provided by the government.
7. Global Ranking: India climbed to the 11th position in the global direct selling ranking for the year 2022, showing an improvement from its 15th position in 2019.
8. Differentiation from MLM Ponzi Schemes: Direct selling companies like Amway, Oriflame, and Herbalife emphasize the importance of clearer regulations to distinguish them from fraudulent pyramid and money-circulation schemes.
9. Regulatory Modifications: The consumer affairs ministry introduced amendments to the Consumer Protection (Direct Selling) Rules, 2021, aiming to delineate between legitimate direct-selling practices and fraudulent schemes. However, further clarification is sought, particularly regarding the definition of a ‘network of sellers’.