Direct selling to ride high on small towns

American direct-selling names like Amway and Tupperware, known worldwide for their network-based marketing, are now household words in many parts of interior India.

American direct-selling names like Amway and Tupperware, known worldwide for their network-based marketing, are now household words in many parts of interior India.

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Not counting the common insurance sales, the size of the ‘low investment and high returns’ direct selling industry at present stands at an annual revenue of Rs 3,330 crore. But this is set to surge 12.5 per cent a year to Rs. 5,328 crore by 2012-13 aided by a big expansion in smaller towns, industry officials say.

While metros still contribute to 57 per cent of overall revenues faster growth rates have been recorded in Tier-I and II cities, Pinakiranjan Mishra, Partner and National leader – Retail & Consumer products at Ernst & Young told Hindustan Times.

“South India has emerged as the key hub of activity for direct selling companies, closely followed by north India. The eastern region shows the most potential for future growth,” he said.

India is a laggard in this game, but things are changing fast. Small towns in Andhra Pradesh, Punjab, Uttar Pradesh and others are contributing more to the network.

Amway, a global trendsetter, says small towns are strong for both distributors and selling agents.

“Going by the year-on-year growth it is clear that consumers have raised their hands in favour of direct selling,” said William Pinckney, managing director of Amway India, which is strong in the South.

The industry, in which 68 per cent of the work-force are women, is seeing big numbers in small towns.

Tupperware for instance, an all-woman network of 55,000 sales consultants, and operates in 53 Indian cities.

It is seeing growth from Tier II and III towns, said Asha Gupta, managing director, Tupperware India.