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Direct selling industry growth slows to 4.3 pc in FY'14:Report

Press Trust of India  |  New Delhi 

Direct selling industry, which is facing challenges in the Indian market due to regulatory issues, has witnessed a slower 4.3 per cent growth in 2013-14 compared to 12.2 per cent in 2012-13 fiscal, says a report.

Gross sales stood at Rs 7,472.2 crore in 2013-14 while the industry had posted a growth of 12.2 per cent in 2012-13 with sales amounting to Rs 7,164.1 crore, said a report issued by industry chamber PHD in association with the Indian Direct Selling Industry (IDSA).

"The direct selling industry has registered growth rate of about 4.3 per cent in 2013-14 as against the growth rate of 12.2 per cent of 2012-13, 22 per cent of 2011-12 and 24 per cent of 2009-10," the report said.

Although the growth rate in is on a decline in the past three fiscals, on a global basis the direct selling industry has grown over 8 per cent in 2013, it added.

The North region accounted for 29 per cent of sales -- the highest level -- with an increase of 12.2 per cent, followed by South region with 25 per cent. However, the South region saw a drop in sales.

"Southern region, which was earlier our main base, is not doing well due to lack of clarity on the policy for direct selling. In state like Kerala, direct selling has stopped," said IDSA Secretary General Chavi Hemanth.

Products related to helathcare/wellness contributed 44 per cent, followed by cosmetic and personal beauty with 33 per cent and 12 per cent respectively, the report added.

"IDSA members companies have paid tax amounted Rs 1,063 crore to the exchequer for year 2013-14 has," she said.

Presently, has a direct seller base of 62,37,373 and out of that 43,83,487 are active, which is around 70 per cent.

"Women contributed 58.3 per cent in FY 2013-14 and share of men increased to 42 per cent. However, globally contribution from women is around 80 per cent," Hemanth added.

The report further said Bengaluru was the most attractive market for the direct sellers followed by Delhi, Ludhiana, Mumbai and Jaipur.

According to the IDSA Chairman, untoward incidents "have severely impacted" the sentiment of industry players.

The association is seeking a policy framework for the direct selling industry and exclusion from the PCMC (Prize chits and Money Circulation schemes) Act.

Following Prime Minister Modi's invitation to 'Make in India', IDSA has targeted reduction of its import to 10 per cent by fiscal 2019-20 from existing 30 per cent levels.

First Published: Thu, November 27 2014. 17:45 IST