{"id":4414,"date":"2021-09-25T09:13:00","date_gmt":"2021-09-25T09:13:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=4414"},"modified":"2022-11-02T06:38:53","modified_gmt":"2022-11-02T06:38:53","slug":"direct-selling-quandary","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/direct-selling-quandary\/","title":{"rendered":"Direct selling quandary"},"content":{"rendered":"\n<p>Written By <a href=\"https:\/\/www.financialexpress.com\/author\/venkata-susmita-biswas\/\" target=\"_blank\" rel=\"noopener\">Venkata Susmita Biswas<\/a><\/p>\n\n<p>Why direct selling companies continue to be wary of e-commerce channels<\/p>\n<div class=\"row\"><div class=\"col-sm-6\"><img decoding=\"async\" data-src=\"https:\/\/www.thirdeyesight.in\/wp-content\/uploads\/2022\/10\/Tupperware.jpeg\" class=\"img-fluid lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\">\n<p style=\"font-size:12px;\">A study by the Indian Direct Selling Association states that the Rs 17,000 crore direct selling industry grew by only 10% in FY21.<\/p>\n<\/div>\n<div class=\"col-sm-6\">\n<p>The pandemic drove brands across categories to sell on e-commerce platforms and connect with consumers directly. Brands like Cornitos and Bisleri went the D2C way, and carmakers like Hyundai began selling four-wheelers online. From March 2020, direct selling companies enabled individual sellers to accept and fulfill orders online. Modicare, for instance, introduced a chatbot, an instant messaging catalogue, and an online training academy for new sellers. Tupperware created a mechanism through which sellers could share unique links with customers and receive commission on all orders placed using that link. Meanwhile, Amway developed a programme to train direct sellers to create content for social and digital media, and become influencers.<\/p><\/div><\/div>\n\n<p>However, these direct selling companies have not yet opened up the e-commerce channel to the end consumer.<\/p>\n\n<p>A study by the Indian Direct Selling Association states that the Rs 17,000 crore direct selling industry grew by only 10% in FY21. This was a massive drop from 28.2% y-o-y growth in FY20; the industry grew at 12% and 13% in FY19 and FY18, respectively.<\/p>\n\n<p>The direct selling industry leans heavily on person-to-person interactions and home visits by the seller. It has been attempting to pivot to digital for a couple of years now; this was further accelerated during the pandemic. \u201cSince the pandemic, a majority of lead generation happens virtually. This could be on social media platforms, WhatsApp groups, Facebook Messenger, etc,\u201d informs Frederic Widell, VP and head \u2013 South Asia, and MD \u2013 India, Oriflame.<\/p>\n\n<p>Amway India is trying to create an influencer ecosystem through its network of direct sellers. Anshu Budhraja, CEO, Amway India, says these influencers will promote Amway brands to consumers and pave the way for social commerce. The company saw its online sales through individual sellers grow last year \u2014 from over 33% before February 2020 to over 70% today, Budhraja says.<\/p>\n\n<p>Modicare introduced a digital alternative for sellers last year. \u201cMy Modicare Shop facilitates our consultants to create microsites on our server to directly engage with their consumers. It allows customers to place direct orders while crediting the business volume directly to the consultants\u2019 account,\u201d informs Samir Modi, founder and MD, Modicare.<\/p>\n\n<p><b>No takers for e-commerce<\/b><\/p>\n\n<p>Despite e-commerce adoption growing multifold during the pandemic, direct selling companies are opposed to sellers leveraging e-commerce marketplaces. In 2020, a Delhi High Court judgement allowed e-commerce platforms to list products of direct selling entities, like Amway, Modicare and Oriflame, without any consent before listing the products for sale. Despite this, companies continue to delist sellers who use e-commerce platforms. \u201cWe are against this practice and have repeatedly delisted distributors who attempted to unethically sell our products on e-commerce sites,\u201d informs Gautam Bali, MD, Vestige Marketing, and chairman, direct selling council, ASSOCHAM.<\/p>\n\n<p>Eureka Forbes India, which followed the direct selling model, now retails offline as well as on e-commerce platforms. The company sells everything from vacuum cleaners to air purifiers on e-commerce platforms under its own brand store. Tupperware embraced e-commerce in the second half of 2019, and saw business from these platforms grow more than twofold over the last one year. While 80% of the company\u2019s sales takes place through traditional direct selling, e-commerce now contributes 8% to the company\u2019s overall sales.<\/p>\n\n<p>These channels don\u2019t have to cannibalise each other, say analysts. \u201cThe other retail channels need to be viewed as complementary to the core business,\u201d says Devangshu Dutta, chief executive, Third Eyesight. Brands need to move to channels where their consumers are shopping, say analysts. Younger consumers, especially from the millennial generation, shop on e-commerce platforms and value benefits like 24-hour delivery, no-questions-asked returns, and discounts. \u201cIf companies do not follow their shoppers, they will end up losing share of mind,\u201d adds Dutta.<\/p>\n\n<p>Direct selling companies are wary of e-commerce and D2C channels because they deem direct sellers as \u201cthe backbone of the industry\u201d. \u201cCompanies do not wish to bypass these seven million individuals by selling to consumers directly,\u201d says Rajat Banerji, VP, Indian Direct Selling Association. Typically, the D2C websites of direct selling companies are used by direct sellers to place orders on behalf of consumers.<\/p>\n\n<p>Tupperware India MD, Deepak Chhabra, says that the company tackled this conundrum by making its own direct sellers operate on e-commerce platforms and handle the company\u2019s offline exclusive brand stores.<\/p>\n\n<p>Source: <a href=\"https:\/\/www.financialexpress.com\/brandwagon\/direct-selling-quandary\/2333568\/\" target=\"_blank\" rel=\"noopener\">financialexpress<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Written By Venkata Susmita Biswas Why direct selling companies continue to be wary of e-commerce channels A study by the Indian Direct Selling Association states that the Rs 17,000 crore direct selling industry grew by only 10% in FY21. The pandemic drove brands across categories to sell on e-commerce platforms and connect with consumers directly. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-4414","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Direct selling quandary - Third Eyesight<\/title>\n<meta name=\"robots\" content=\"index,follow\" \/>\n<link rel=\"canonical\" href=\"https:\/\/myechoproject.com\/TES\/direct-selling-quandary\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Direct selling quandary - Third Eyesight\" \/>\n<meta property=\"og:description\" content=\"Written By Venkata Susmita Biswas Why direct selling companies continue to be wary of e-commerce channels A study by the Indian Direct Selling Association states that the Rs 17,000 crore direct selling industry grew by only 10% in FY21. 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