SECTOR PROFILE | DIRECT SELLING
THE DIRECT APPROACH Winning Edge examines the growth in size and professionalism of the global direct selling industry
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other of two, 36-year-old Kiran Khutan, has been working as her own boss selling Amway products for four years. With a background in marketing, she worked evenings and weekends to build her own business, initially as a sideline to her full-time job for a London insurance company. This is the image of the direct selling industry that we’re all familiar with: people, mainly women, earning a little money on the side by selling products to family and friends, and friends of friends. And, to an extent, this is the reality. Nine out of ten of the 103 million individual direct sellers worldwide are involved on a part-time basis, and at least 80% are women.
ANDY SMITH UK and Ireland general manager at Amway
“Direct selling offers the opportunity to try out a new career channel without having to risk your livelihood”
GLOBAL GROWTH Yet this is no cottage industry. Globally, reports the World Federation of Direct Selling Associations (WFDSA), sales rose 7.7% in 2015 to $183.7bn, up from $170.6bn in 2014. Every region increased sales last year, with 80% of countries reporting a rise in sellers and sales. This is sustained growth, not a flash in the pan. In Europe, direct selling has shown constant expansion over five years, with EU sales rising by 7.5% in the year to 2015 – a sharp contrast with average retail sales in the EU, which grew by just 3% in the same period. Even during periods of economic turmoil, direct selling seems to flourish. As Katarina Molin, executive director of SELDIA, the European Direct Selling Association, explains, “Many of the products sold this way do
“Nine out of ten of the 103 million individual direct sellers worldwide are involved on a part-time basis, and at least 80% are women” 28 WINNING EDGE
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DIRECT SELLING: A DEFINITION l Direct selling is defined by SELDIA (European
Direct Selling Association) as “a method of marketing and retailing goods and services directly to consumers, in their homes or in any other location away from permanent retail premises. It is usually conducted in a face-toface manner – either where products are demonstrated to an individual or group, or where a catalogue is left with the consumer and the direct seller calls back later to collect orders. Unlike direct marketing or mail order, direct selling is based principally on personal contact with the customer.”
not necessarily suffer from a downturn in consumer demand. In particular, this is true of personal care, nutrition, health and wellbeing products, which have experienced an upwards sales trend in the last couple of years.” ENTREPRENEURSHIP Another positive factor is the rising trend towards entrepreneurship. “The number of private entrepreneurs has significantly increased due to the digitisation of the economy and the rising demand for more job flexibility,” continues Molin. Amway is the world’s biggest direct selling organisation (see box on page 30), operating in 100 countries and territories. With 20,000 employees globally, it is one of the 30 largest private US companies and it is estimated that 71 million households have an Amway product. UK and Ireland general manager Andy Smith, also chair of the UK’s Direct Selling Association (DSA), explains the appeal of the industry in today’s uncertain economic climate. “Direct selling offers the opportunity to try out a new career channel without having to risk your livelihood. ISMM.CO.UK
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