Regulate the selling

Legislative regulation is a must with the uprising of ponzy direct selling companies in the country. Ms. Chavi Hemanth, Secretary General, IDSA is clearly not impressed with the impact of such players and hopes to get rid of them and prosper the chances of direct selling industry blooming big.

Aadeetya Sriram (AS): IDSA has been present in the country for quite some time now, what has been its role?

Chavi Hemanth (CH): IDSA was formed 14 years back and constitutes 5-6 companies. We are affiliated to a world body called World Federation of Direct Selling Association (WFDSA), which has been existing for quite some time now and it has chapters like IDSA in around 59 countries across the world. The whole back-up comes to us with regards to inputs on how we should run the organisation, how we should deal with the industry. Code is prepared then implemented. Most of the companies which formed a part of IDSA were associated with direct selling bodies in different countries. At present, we have 18 members in the body.

AS: In terms of direct selling, who is the leading player in the Indian market?

CH: Amway is the leading direct selling player in the Indian market. One of reasons for that is their vast product basket. The other players present during that time were in colour cosmetics, but Amway is majorly into health products. Hence, the demand is widespread compared to the cosmetic brands.

AS: How has the direct selling industry brought about enhanced women empowerment in the country?

CH:  All around the globe, people want to have additional income, especially women who prefer being a home-maker as well as an earner alongside. The other aspect is students who want to earn their living. Once women want to have an additional income and want to be a homemaker parallely, direct selling is the way  ahead for them, because it is not like full-time jobs, you can do it at your pace and you are not accountable to anyone.

AS: If there is brand looking to foray into direct selling, how exactly can one enroll himself?

CH: If there is an international brand coming in, then they can do a joint venture or come through 100% direct route. Like Jafra Ruchi, is a new company which came in last year and that’s a joint venture between the Ruchi Group and Jafra.

AS: Direct selling as of now has been primarily concentrated within the FMCG sector, is it viable for any other sector?

CH: If you look at the electronics sector, it is still a retail-off-the-counter product because you want to see the product, feel it though you can do the same thing with D/S. Internationally, there are some companies which offer electronics, it may not be the entire range but just a couple of their products, which will cater to their requirements. There are lots of companies waiting to enter the Indian market and one of them would like to try it out but currently I do not foresee any such arrangements.

AS: How can you differentiate between a legitimate & illegitimate direct selling company?

CH: We at IDSA have these differences categorised, whenever a new distributor comes to place we do give that information to them, but we give to the companies. The basic thing to take care of whenever you’re joining a company, check the cost of joining fee, whether there is a buyback or not, your job security as well as the product itself within a stipulated period of time, which in our case is 30 days.

AS: What are the future plans for IDSA?

CH: We expect to grow at 20% over the next 5 years. But our only deterrent is the fly-by-night operators, because the minute there is a scam or a ponzy scheme floated, it comes in the market and tints the image of the whole direct selling market. If you look at the trends, it happens every 4 years.

In terms of revenue, we’ve accumulated Rs. 4,200Cr this year and we expect to cross 7,000Cr for 2012-13.