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Direct selling industry to touch Rs 5,000 cr

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The in Indian is anticipated to touch Rs 5,000 crore by 2012-2013, provided interest of legitimate direct selling companies are taken care of.

Amarjit Ubhi, chairman, Indian Direct Selling Association (IDSA) revealed, the direct selling industry reached a annual turnover of Rs 3,300 crore in 2009, showing a growth of 15 per cent annually.

is the Indian counterpart of the Washington-based World Federation of Direct Selling Associations (WFDSA), which regulates, strengthens and promotes direct selling in over 59 countries. Formed in 1996, IDSA at present has 18 members in India.

Sharing the growth of Direct selling industry in India, Ubhi said the Industry turnover which was Rs 2,315 crore in 2006 was, has now touched Rs 3,300 crore.

According to IDSA officials, the downturn resulting in job cuts may have provided people an opportunity to scout for alternative options and direct selling industry indeed was one of the beneficiaries of that.

Another attractive feature of the direct selling industry was low investments commensurating greater returns, has the potential to become the driver of entrepreneurial opportunity in the country.

Ubhi added, among cities, metros (comprising the top eight cities in the in the country) contribute 57 per cent of the overall revenues of IDSA member companies. Tier-I cities contribute 29 per cent and tier-II cities the balance 14 per cent. However, tier-I and tier-II cities have recorded faster growth than the metros.

The Direct Selling is estimated to be worth Rs 10,000 crore industry worldwide with 3,500 companies involved in the business. But in India, the industry is still in nascent stage with just 18 companies, enrolled as part of IDSA.

Ubhi stressed on the need for a regulatory framework governing the direct selling industry in India and its importance to harness the potential of the sector to provide transparency.

According to IDSA, Direct Selling Industry in India contributed Rs 370 crore to the government exchequer and as such there was need to regulate the industry to provide it congenial environment to nurture.

Ubhi stressed, “The concern of increasing numbers of fraudulent schemes and fly-by-night companies makes the demand for an appropriate operational regulatory framework all the more pressing. This will not only protect the interests of legitimate direct selling companies but also that of the consumers at large.”

He underlined the fact that “Direct selling companies from USA, Europe and South East Asia are eying Indian potential. Newer products and services are ready to enter the Indian market and regulatory framework will definitely hasten the whole process.”

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