With economic development and growing consumerism, various store and non-store retail formats have evolved to cater to the growing retail sector in India.Direct selling is one of the oldest, most-traditional form of selling globally involving the direct interaction between the seller and the buyer. Direct selling market at INR 72 billion is one of the fastest growing non-store retail formats in India.
Direct selling provides self-employment opportunity to large number of people and has a positive socio-economic impact. The industry has contributed significantly in the area of women empowerment, growth of the SMEs sector,besides undertaking various other social activities. Over 5 million people (including over 3 million women) are already associated with the industry as direct sellers. Going forward, the industry provides immense potential to grow to an INR 645bn market by 2025 engaging over 18mn people as direct sellers and providing employment to over 2.5mn people in the value chain.
However, direct selling companies face many challenges in India, the biggest of which is lack of regulatory clarity.
The success of the industry, led to a number of fraudulent money circulation schemes which started posing as direct selling enterprises to gain from the popularity of the industry. Often direct selling companies are mistaken for fraudulent pyramid/ponzi scheme impending the growth and reputation of direct selling companies in India.
There is a need to revisit existing laws and bring about regulatory clarity to build an environment of trust in order to reap the multiple benefits that the industry has to offer.