Direct selling industry growth still cosmetic

INDIA INC GETS READY FOR RETAIL MARCH

The still nascent domestic direct selling market gradually seems to be taking off, with the industry posting a growth of 18 per cent in the last year.

According to the Indian Direct Selling Association, the turnover for 2004-05 was about Rs 2,700 crore with the growth rate being sustainable at this point.

At present, the majority of products sold through this route are from the home and personal care segment, largely because customers prefer personalised suggestions on what products would specifically suit them.

Tomas Erikson, managing director, Oriflame India, said, "Within direct selling, the cosmetics and toiletries market has grown at 11 per cent, and with increasing awareness and aspirational levels, we will become more aggressive about our plans in India."

At Amway, cosmetics and Nutrilite "� the wellness brand "� account for 60 per cent of its total sales. Hindustan Lever, too, has taken its Ayush brand off the store shelves and has made it part of Hindustan Lever Network, its direct selling channel, through which it also markets Aviance "� a range of high-end skincare products.

Companies are pretty happy at the way the market is growing in India, not only for personal care products but also the likes of insurance and crockery products.

Sanker Parmeswaran, director - legal and corporate affairs, Amway India Enterprises, said Amway planned to expand its distributor base by 20 per cent in India and establish its presence in more than 2,500 cities by the end of the year.

The way ahead for companies, he said, would be to grow the network through the distributor base as well as newer products.

The ability to penetrate deeper through 'words of mouth' is a big positive, going forward, and is likely to result in sustainable growth for the companies operating in this sector.