Hong Kong-based direct selling company, QNet plans to increase local sourcing of products by 20 percentage points in one year to service Indian consumers with their choice of products.
With an estimated annual turnover of Rs 450 crore (unaudited for 2015-16), the company changed its focus to enhance procurement of products from local manufacturers in 2013. From the level of 40 per cent of local procurement, QNet expanded local products basket to 70 per cent in 2015-16. The company plans to expand local sourcing further to 90 per cent in the next 12 months.
Selling largely health and wellness products through online, QNet has expanded its products basket to 64 over the years and signed up memorandum of understanding with a number of local producers for product supply.
"Various studies suggest double digit growth in demand of health and wellness products over the next two-three years which we want to capture through partnerships with local producers. We are focusing more on the ayurvedic products to tap the ongoing trend in India," said a senior company official.
QNet plans to introduce 8-10 new products in the health and wellness segment in the next one year. Apart from that, it is also planning to introduce fashion jewellery to capture the trend in online sales.
Meanwhile, demonetization of high currency notes of Rs 500 and Rs 1000 denomination has resulted into sharp increase in the growth of online business through card payment. Being the winter season with huge potential of growth, QNet estimates the business momentum to continue going forward.
QNet, however, has seen controversy surrounding around its for its business model resulting into over 60 complaints registered against its subsidiary Vihaan Direct Selling India Pvt Ltd. The Economic Offences Wing (EOW) of Mumbai Police and similar wings of Hyderabad and Delhi police have arrested over 19 officials. The company is being accused of collecting investments in the name of product selling.
"Not a single charge sheet has been filed since the first complaint registered against the company three years ago. Also, no court of law has passed any order for closing down our business in India. This simply indicates malafide intention of the complainant. We have a full faith in judiciary. We are waiting for justice," said the official.
The company claims to sell all food supplement products certified by the FSSAI and others by their respective regulatory bodies.
Meanwhile, the direct selling industry in India is estimated at Rs 7200 crore which would see eight times growth to Rs 64,000 by 2025.
