India’s direct selling market and the pandemic. What lies ahead?

The pandemic saw businesses, governments and organizations adapt themselves to a dynamically changing environment. As the mode of operation transitioned from offline to online, from office to home, from centralized to decentralized, industries saw both internal and external transitions. The Direct Selling industry in the country too witnessed these changes. However, its unique flexible functioning model made it relatively more immune against the drastic changes brought about by the pandemic. For example, the decentralization of operations witnessed by most sectors during the pandemic had already been well assimilated into the direct selling sector. The people involved with direct selling business naturally adapted to the new normal faster as they were already trained in the process much before the pandemic hit.

During the pandemic’s uncertain phase, the direct selling industry redefined and reshaped its operations by extending its flexibility, decentralization, and remote working. It effectively combined the online world with personalized selling and used technology interventions in training and upskilling to augment individual capabilities. This enhanced the industry’s effectiveness in providing remote connectivity and promoting livelihoods in the form of economic inclusion at the grassroots level. The effect of this has been an increased capacity of its already vast distributor network to tide over the impact of the pandemic. The economic growth the industry witnessed during the pandemic is a testimony to this.

 Charting Industrial Growth

The inherent adaptability and flexibility of the direct selling sector were reflected in the growth of the sector during the pandemic. According to ASSOCHAM, the direct selling industry will reach a value of ₹15,930 crores by the end of 2021, up from ₹12,620 crores in 2016. This growth is primarily driven by wellness, nutrition and other FMCG products. Consumers see huge value in categories such as nutritional supplements, immunity boosters and hygiene products. These categories registered far higher sales than before the crisis and this has resulted in significant growth of the industry in the last four quarters of the year.

Self-sustenance Opportunity During Pandemic

The pandemic brought along with it major uncertainties like unemployment, salary cuts and job displacements in both the formal and informal sectors. For those affected, direct selling played an important role as an attractive alternative career prospect with additional income opportunities , independent of the volatile job markets.

The direct selling industry proved to be increasingly appealing, as people explored new and alternative sources of income that were stable and reliable. The sector adequately provided an alternative career to millions and became a lifeline to many of the families impacted by the pandemic.

 Driving Growth in a Promising Nation

Current employment opportunities are lagging far behind the huge demand  for employment in the coming decade. According to a report, by the end of the decade, India will have the largest working-age population in the world. Direct selling can unlock opportunities for the working-age population and generate sustainable income opportunities, bringing self-reliance at the grassroots level.

Additionally, digitalisation in India is shifting the direct selling industry towards a new direction. Besides using technology for marketing and distribution, companies are increasingly investing in online training and development tools which are creating transparent self-sustaining business models in entrepreneurship.

Direct selling is also acting as a catalyst for India’s increasing focus on ‘Make in India’. Homegrown direct selling companies are actively encouraging this by sourcing products from local vendors and associating with people across India. This is a constructive step towards realizing the country’s Aatmanirbharta dreams.

The pandemic continues to be a significant challenge for India. As we try our best to travel through its ups and downs, being adaptable to the pandemic’s ever-changing contours is the key to survival. The direct selling industry offers just that. Direct selling fits the definition of conducting a business that remains pertinent and possibly grows even after restrictions on movement are lifted in the times ahead.

The article has been written by Gautam Bali, MD, Vestige Marketing