Direct selling industry to grow around 3 folds by FY25

The domestic direct selling industry is estimated to grow around three folds to cross Rs 25,000 crore mark by 2024-15 on burgeoning income, demographic dividend and favourable policy environment.
The growth momentum would also be supported by factors as growing urbanisation and widening acceptance of the industry, the annual report released by the Indian Direct Selling Association (IDSA) in association with PHD Chamber of Commerce and Industry said.
"The size of the industry is estimated to reach up to Rs 25,826.1 crore by 2024-25 on account of supportive policy framework, nonexistence of illegal activities under the garb of direct selling, expanding consumer base, widening acceptance and awareness about direct selling in our country," the report said.

In FY 2015-16, the direct selling industry had sales of Rs 8,308.5 crore as against Rs 7,958.3 crore of FY 2014-15 by registering a growth rate of 4.4 per cent.
However, the growth rate was lower from the previous years and it declined on account of factors such as "lack of proper regulatory framework, lengthy product approvals, occurrence of fraudulent activities impacting the confidence of not only stakeholders but also consumers, high costs of doing business, slowdown in demand in the economy."
As per the survey, the northern region was the top contributor of the direct selling industry with gross sales of Rs 2,492.6 crore, which accounted for 30 per cent of the total sales in FY2015-16.

It was followed by the southern region, which contributed 21 per cent of the gross sales with Rs 1,578.6 crore during the period under review.

"However, the region "witnessed a 4.6 per cent decline in sales in FY2015-16 as compared to FY2014-15," the report added.
The eastern zone and the western zone contributed 19 per cent and 17 per cent respectively.
According to the report, eastern region had "registered a growth rate of 10.2 per cent in 2015-16 as against 6.5 per cent in 2014-15," which is the highest.
Commenting of this, PHDCCI Chief Economist S P Sharma said: "The total tax paid by the IDSA member companies amounted to Rs 1,258.3 crore in 2015-16 as compared to Rs 1,171.5 crore in 2014-15 registering an increase of 7.4 per cent as compared to 2014-15."

The direct taxes have increased to Rs 387.5 crore million in 2015-16 as against Rs 355 crore in 2014-15, while indirect taxes have scaled up to Rs 870.8 crore in 2015-16 from Rs 816.5 crore in 2014-15.