Direct Selling: What it is, and its scope in India (An Overview)

Success at any business requires a certain level of creativity, hard work, and also luck. A successful business solves problems and provides solutions to the masses. The established traditional way of selling products is to stack up your store with popular items and sell to the customers that visit the store. Doing business in an area where there aren't a lot of stores for people to get the products, one can earn good profits. But, as the market expands and more and more stores show up on the map, store owners have to be more creative and do something unique to keep selling. Having a physical location, one can stock up and wait for the customers to show up. But there is another way to move products; direct selling.

What is Direct Selling? 

Direct selling is a way of selling products by contacting the customers directly instead of waiting for them to discover the product and come by themselves. It entails a seller going to the customers, introducing the product, and getting sales that way. It is an active way of selling and requires the seller to move and find customers. 

Wikipedia gives the popular definition of direct selling, touted by various experts as "The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs." That tells you a lot about the core concept behind direct selling. It involves a seller presenting his/her product to a customer. By effectively showing a product, a seller can inspire confidence in its quality. 

Direct selling can work on two levels: Single level Marketing and Multi-level Marketing. 

In Single level marketing, a seller earns directly from selling the products he/she buys from a parent organization. Multi-level marketing, or referred marketing, involves referring or adding more members/sellers and earning commissions on their efforts, along with direct-selling of the products. With single-level marketing, sellers can focus on sales and earn (commissions), and with multi-level marketing, one can expand on their earnings by networking.

How does Directly Selling work? 

Direct selling is not a new concept. People have been selling products/services to customers directly for hundreds of years. However, the process has become more streamlined, with corporations handling the production, quality management, and all the "behind the scenes" of making a good product, allowing sellers to focus on selling the products in their own unique way. There are a couple of underlying factors that affect the direct selling experience. Here is a basic overview of the process: 

One of the most crucial principles determining how successful a direct-selling experience will turn out is having a unique and quality product. The product should be something the customers can't just find at their nearest store. It should offer a solution that most mainstream products are missing. If your product is something like that, it makes direct selling easier. 

Vestige, one of the top direct-selling companies in India, for example, offers innovative, high-quality wellness products, making it easier for the sellers to market and sell the products. 

b.) Defining a Target Audience.

Like the USP of your product, you also need to identify its unique audience. If you have that figured, you can save a lot of time and energy explaining the product to the wrong crowd. 

c.) Effective Communication.

Direct selling is highly affected by the communication skills of the seller. Someone who loves talking to people, and demonstrates the qualities of your products effectively, will get better results. So, direct sellers either need to have good communication skills or to learn by working on them. 

d.) Maintaining Good Relationships 

Direct selling, like regular sales, also involves retaining customers. Good professional relationships need maintenance to keep the products flowing and to grow the network. 

These are some of the factors that affect a seller's ability to directly sell to his/her customers.

Direct Selling in India: How popular is it? 

India is one of the biggest markets in the world. It offers a business an enormous amount of opportunities. However, India is also a place where selling anything becomes tricky. That's why many national and global corporations act according to the various market norms of the Indian market. In India, the customer truly is the king, and an average Indian customer wants quality and affordability. Direct selling had been in a rut in its nascent years, but slowly that is changing. 

Since there was no awareness of the direct-selling approach, direct sellers in India had to face a lot of challenges. For many, there was also a lack of training and guidance to help them. Globalization in recent years has changed a lot of that. Not only the awareness amongst the direct sellers but also the customers has definitely given rise to more opportunities. Worldview, direct selling as a business approach has seen tremendous growth, and you also see it reflected in the Indian market. 

The direct Selling Industry is making its ground in India effectively. The industry has opened up job opportunities and extra-income avenues for many people. 

After the release of the Annual Survey Report FY2020-21 on direct selling,  state minister for Consumer Affairs Ashwini Kumar Choubey said, "By providing livelihood opportunity and skilling to almost 80 lakh Indians, the Indian Direct Selling Industry has proven that it has established itself in India's socio-economic landscape,". Direct selling, especially after social media has proved to be such a meaningful asset in a direct seller's toolkit (making sales more effective), has seen tremendous growth and popularity in the Indian market. The footing of the industry has further solidified with Government's policy clarity to this industry through the Consumer Protection (Direct Selling) Rules 2021.

Scope and Future of Direct Selling in India

Even with an event such as the pandemic that shook the economic pillar of India and the world, the direct selling industry came to the forefront with various innovations that made it possible for many to have sources of revenue generation. In recent years, the direct selling industry has proved to be a significant force in the business world, and it shows. 

According to a report released by the Indian Direct Selling Association (IDSA), In the financial year 2021, the direct selling industry crossed the 18,000 crore mark (for the first time) after generating over 16,776 crores in the financial- year 2020. The growth was primarily driven, according to the report, by wellness, cosmetics, and personnel care segments.

 In the report, IDSA further noted that, 

"In a year dominated by the COVID-19 pandemic and comprehensive lockdowns, the Indian Direct Selling Industry has managed to emerge stronger and maintain its growth momentum. This has been achieved by constant innovation, adoption of new technology, and custom-driven adjustments to customer and market needs,". This statement says a lot about the potential of the direct selling industry in India. Comparing the Industry revenue from FY15-16 of Rs. 10,300 crores to the FY21, Industry saw a CGAR of around 12 percent. The total number of direct sellers also grew from 7.4 million in FY2019-20 to 7.9 million in FY21. 

The growth of direct selling is not only in pockets, but smaller tier-II and tier-III cities have also seen remarkable growth. The industry's focus on digital adoption promises further positive developments down the line. 

There is a lot of scope for the direct selling Industry in India, and the industry is going to see a lot of changes as well, most probably for the better.

Conclusion

The direct Selling Industry has been gaining momentum steadily in recent years and has seen constant growth. The popularity of the Industry, in part, results from the innovative means that the Industry has used to generate more employment and revenue. Currently, the Industry is not only popular amongst the public but is also getting encouragement from the government, boosting its potential. It will be interesting to see what further developments we'll get in the future.