Direct selling in India to reach Rs. 645 billion by 2025: FICCI

Amitabh Kant, Secretary of Department of Industrial Policy and Promotion has said that direct selling will have to be given a greater thrust as it empowers women, MSMEs and promotes manufacturing in India.

Speaking at the FICCI DIRECT 2015, an annual flagship event for 'Direct Selling (DS) industry', Kant said that the industry has a potential to grow to Rs. 1000 billion by 2025 much beyond the FICCI-KMPG report projection of Rs. 645 billion.

Acknowledging the need for clarity in definition of direct selling and a separate regulatory framework for the industry, Kant said that DIPP has already submitted the draft guidelines to the ministry of consumer affairs for the direct selling industry and is hopeful for its implementation by various states.

He also urged the industry to embrace technology as the industry can deliver better and even faster once technology becomes its strength.

Direct selling is one of the oldest and traditional forms of selling today with a successful industry operating in over 100 countries, with a market size of USD 180 billion. In India, the market was estimated at Rs. 75 billion (2013-14), and forms around 0.4 percent of the total retail sales in the country.

To showcase the potential and highlight the opportunities and challenges faced by the DS industry, FICCI organizes its annual event on Direct Selling 'DIRECT' every year.

Further on the occasion, Dr. A Didar Singh, Secretary General, FICCI said "Indian Direct Selling Industry" is an important component of the Indian economy and acknowledging this, we at FICCI through our focused task force on direct selling is working dedicatedly towards the growth of this industry and seeking regulatory clarity for this new industry.

FICCI is working closely with the Central and State Governments on the same and today's conference is a step in that direction. Today, we have launched the FICCI-KPMG report on the current state and contribution of Direct Selling industry in various states. This would be a reservoir of information on how this industry is contributing towards the development of various parts of India.

According to the report, the industry has recorded high double digit growth of about 16 percent over the past four to five years. The market has grown to become a key channel for distribution of goods and services in the country, especially for health and wellness products, cosmetics, consumer durables, water purifiers and vacuum cleaners.

The report attempts to analyze the region-wise direct selling market comparing and contrasting growth patterns. In the last five years, the industry has recorded strong growth rates especially in the states of Assam, Delhi, Punjab and West Bengal.

As per our analysis, North India emerged as the largest region by market size and accounted for Rs. 22 billion in 2013-14; South India which holds the second highest share of the direct selling market was pegged at Rs. 19 billion in terms of revenue in 2013-14.