The direct selling industry has the potential to provide self-employment to 18 million, according to the FICCI-KPMG report on the direct selling industry in India, released by Ram Vilas Paswan, Union Minister of Food, Public Distribution and Consumer Affairs, in Delhi today at a FICCI conference 'DIRECT 2014'
The report indicated that with the right policy stimulus, this industry might well reach its potential of Rs 645 billion, a nine-fold increase in twelve years. Minister Paswan released this report along with Keshav Desiraju, Secretary Consumer Affairs, Sidharth Birla - President of FICCI, Kurush Grant ED of ITC, as well as other industry representatives.
The FICCI conference was attended by a number of India and global industry dignitaries and other stakeholders. Direct selling is a global industry, operating in over 100 countries with a market size of USD 167 billion. It refers to the selling of goods and services to the consumers away from a fixed retail outlet, generally in their homes, workplace etc., through explanation and demonstration of the product by direct sellers. USA, Japan and China are key markets for the industry. Back home in India the market is estimated to be around Rs 72 billion, which is a far smaller percentage of the size of the economy, when compared to other countries. The FICCI-KPMG white paper launched today highlights the challenges faced by the industry in India, and suggests a roadmap for enabling the industry going forward.
The Union Minister said, "I acknowledge the contribution of Direct Selling industry towards offering greater choices to the consumers. My Ministry appreciates the need of creating a regulatory framework for the direct selling and e-commerce sectors. We have recently formed an Inter-ministerial committee to deliberate on the need and framework of regulations for the Direct Selling industry. We feel it is important to distinguish between the genuine and fraudulent players, and any regulation that is proposed should keep in mind the interest of consumers as the first priority."
Secretary, Desiraju further said, "We are hopeful that the proposed changes to the Consumer Protection Act will strengthen consumer welfare. There is a need to differentiate direct selling from other fraudulent schemes masquerading in the market as direct selling. With internal trade falling under the Ministry of Consumer Affairs as per the allocation of business the Ministry seeks to play an important role in regulating activities which impact on consumers. The industry needs to have a regulator to look at its issues more closely and resolve them."
Sidharth Birla, President, FICCI commented on the occasion said, "The industry holds large potential not only for the economic, but also social development of India. With growth in the industry, it is projected to employ nearly 18 million direct sellers, with almost 11 million of them as women. The industry is also expected to contribute a tax of Rs 90 billion to the exchequer. Hence, it is important that the growing economy like India should encourage rightful emerging businesses by creating a favorable policy environment."
Kurush Grant, chairman FICCI FMCG Committee said, "Direct Selling to consumers has been one of the oldest methods of distribution for FMCG and other consumer goods in India. Encouraging this business model would promote employment in India at the economic level where employment is most needed. Since most of the products sold through this channel are locally produced, this is also in tandem with the 'Make in India' objective of the Government. I recognize that there have been certain gaps which have restricted this channel to reach its true potential. I am happy that the Ministry of Consumer Affairs has acknowledged these gaps and would work towards bridging the same."