Sensing the need to regularise direct selling, FICCI has urged the government to provide clarity. Shilpa Gupta, Head - Retail, FMCG, Luxury Gems & Jewellery, Direct Selling, FICCI, shares her views about the potential of this multi-level marketing model a
Sensing the need to regularise direct selling, FICCI has urged the government to provide clarity. Shilpa Gupta, Head – Retail, FMCG, Luxury Gems & Jewellery, Direct Selling, FICCI, shares her views about the potential of this multi-level marketing model and the steps to regularise it.
How do you assess Direct Selling in India?
Direct selling is not new to India. Around the year 1995, lots of companies started it, Amway was one of them. But the misfortune is that we only understand direct selling on the basis of one or two companies. In fact, there are lots of companies that are into it. In India, Direct Selling has been a very old mode of selling. For example, a cycle rickshaw peddler in the early days, coming to our doorsteps, that was direct selling. However, with coming up of new policies and regulations like Prize Chits and Money Laundry Banning Act, Direct Selling as an industry has been affected. So we need to work upon regulations. If all things work well, it is a good way of operations.
What are the challenges to Direct Sellers and how can they be addressed?
A Direct Seller goes through multiple layers. One direct seller who is low in the pyramid, faces challenges of the community not looking upon him in good perception. Then there are fly-by operators in the company, who are actually cheating on the consumers’ share. So the consumer cannot decipher whether it is a scam or direct selling.
How is FICCI contributing towards the process of regulating this segment?
FICCI has prepared guidelines for states which can actually act like a model guideline. States like Kerala and Rajasthan have come up with the guidelines. However, state governments should take feedback from industry organisations to collectively formulate a guideline which is more compliant. Again, the motive should be that there are checks on scams and genuine business does not get hurt.
Is there any method to channelise it?
Sometimes, people, in order to oversell, overpromise and result into situations ultimately leading to scams where they are unable to deliver properly. In order to avoid that over-enthusiasm, it is important to regulate the industry.
Modicare, Amway, Tupperware, Oriflame, Avon are just a few players, there are more than 7,000 registered companies under direct selling model which have employed almost six million people of India. HUL itself has a division on direct selling.
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