Direct sellers such as Amway, Tupperware and Network Communications, are mulling steps to prevent the selling of their products on online marketplaces without their consent in the wake of new guidelines issued by the government.
India Direct Selling Association (IDSA) is in discussions with its members for the industry to comply with the government regulations.
"We are concerned that online sellers have been selling Tupperware products. We do not sell to online sellers as for us offering the opportunity of economic empowerment to our Sales Force is very important," Tupperware India MD Shilpa Ajwani told PTI.
She further said: "We have in the past written to online sellers to refrain from offering our products on their e-commerce sites. We are assessing next steps in accordance with the Direct Selling guidelines".
US-based Amway said it is engaging with key stakeholders to understand the key aspects of the guidelines and develop strategies to harness the industry's potential.
"The new guidelines have put some important points for consideration on third-party online marketplaces. We are supportive of these efforts and believe they will strengthen consumer protection," said Amway India CEO Anshu Budhraja.
On September 12, the government issued guidelines to regulate direct selling and multi-level marketing businesses. Under the norms, no person can sell products of a direct selling entity on an e-commerce platform/marketplace without the prior written consent of that direct selling entity.
"IDSA is consulting with all the member companies to find the ways and devise the strategy to control and ensure compliance of this condition with due consideration to the interest of the consumers and direct sellers," IDSA Chairman Jitendra Jagota said.
Another direct seller Network Communications said there were no issues as its products were sold by own distributors.
"We will find out if these are being sold by our authorised distributors. If yes then we don't have a problem; if not we will approach the regulatory authorities to take due steps," said Network Communications Chairman & MD Sujit Jain.
He further said: "We will also make sure distributor is not selling it bellow certain price point decided by the company."
According to Budhraja: "Any product sold via third-party online channels create an unnecessary risk for the consumer. People purchasing products through these channels run the risk of receiving products that could be, among other things, out-of-date, spoiled, altered, or even an imitation".
He further added that its distributors Amway Business Owners (ABOs) are only authorised sellers of Amway products.
"All of Amway's products sold by ABOs are backed by a refund policy. We don't offer any refund on a product sold through a third-party online platform," he said.
According to a report by industry chamber FICCI, the direct selling industry in India is estimated to be around Rs 7,500 crore.
It has potential to attain a market size of Rs 15-20 billion by 2025 on account of increasing income of middle class households, it added.
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