Direct selling, a safe haven in 2020

Direct selling picked up in a big way during the period of lockdown as it ensures decent returns with little investment

Published: 31st December 2020 04:19 AM  |   Last Updated: 31st December 2020 07:30 AM   |  A+A-

Express News Service

In May, *Neha lost her husband to COVID-19. The 30-something, who had always been a housewife, now had to look after her octogenarian father-in-law and was at her wits ends on how to run the household. “Approaching anyone for a job in these times would have been stupidity. Besides, who would employ a graduate with no work experience?” reminisces Neha about her hard times. 

Then, one of her relatives told her about Vestige, a direct selling company. “The offer was good, and I didn’t have to invest or pay a lot to first buy and then sell the products to customers,” she says. Neha now earns Rs 40,000 per month and runs her home comfortably.

Like Neha, many people joined the business of direct selling after the pandemic struck, either because they/ their spouses got sacked or had huge salary cuts. “I joined Oriflame last year, and now have over 350 in my downline. Over 100 of them joined after April in the lockdown,” says Jyoti Sharma, another housewife-turned-direct seller who earns Rs 30,000 to Rs 40,000 per month. “My senior, just four years into this business, earns six lakh a month. Which job gives you this kind of growth?” she asks. 

Then there are entrepreneurs like Taruna Sharma, who took up direct selling as an alternative business. “Last year, I had started a travel agency, Travellers Era, and just when things were looking rosy, the pandemic brought my work to a standstill. A friend told me about Modicare. I had heard about Amway and Avon, and knew what direct selling entailed. So, I became a consultant in April.” Sharma adds that the initial months were a struggle, but work picked up by August. “Though I am back to my travel business, I still get returns from direct selling,” she says. 

In the business of direct selling, every time you recruit or refer a new person, you invest in that person — similar to investing in a new business. And, every time ‘your business’ earns, you earn too. Globally, over 119.9 million entrepreneurs earn their income by direct selling, representing top brands in nutrition, beauty, home care, jewellery, clothing, telecommunications, energy, home décor, legal, financial planning, insurance and other categories. 

According to the recent FICCI-KPMG report, the direct selling industry in India recorded a 16 per cent growth in the last five years. The findings indicate the business now stands at Rs 236 billion, and is likely to reach Rs 645 billion by 2025. Experts attribute this growth pattern to the government’s schemes like Skills India, Make in India, Women Empowerment, Startup India and Digital India.

tapas ranjan

Men are in it too
While women constitute over 60 per cent of the workforce in direct selling, men are not far behind. “I was working at a company’s sales department, when they chucked me out. So I put in some money (Rs 1 lakh) and joined this MLM company that deals in electronic products,” says *Ranjan Mehra. “I don’t mind spending this amount, the returns are good,” he says. 

After Kamal Kishore Miglani, who ran a small finance business, stopped getting clients in the lockdown, he switched to Modicare. “I make a decent amount every month, and get a host of benefits like travel fund, discounts on household products, among others. I didn’t want to invest any amount, so I entered this company,” says Miglani, adding that he has 300 members in his downline. But many are inactive, which affects his final earnings — indicating that this industry reflects uncertainty, though far less than the times we are living in. 

“Phase one of the lockdown posed great challenges, but the second innings propelled brands to re-envision business strategies and integrate a digital first approach,” says Samir Modi Founder & Managing Director, Modicare Limited, adding that going ahead into 2021, employee well-being coupled with customer safety will assume key priority. 

“The D2H network plays a very important role in the company’s revenue. We have empowered over 70,000 people (largely women) across India. With people preferring home food, our business has grown multi-fold this year. Also, more and more people are joining us and earning from this model, while working as per their convenience,” says Ravi Saxena, MD Wonderchef, adding that their earnings this Diwali reached Rs 121 crore as against Rs 80 crore last year. The company’s growth is evident from the fact that since May 2020, it has appointed over 50 franchisees and 5,000 consultants. 

Small players
Big MLM chains apart, people have started direct selling via their social media profiles. When restaurants and hotels were shut down, direct sellers like Akansha Kohli found themselves in demand. Kohli, who ventured into the food business with Saffron Gourmet six years ago, sells through her Insta page. “This Diwali and the wedding season were overwhelming. We had several bulk orders. We saw a 60 per cent increase in sales during the wedding season,” she says. 

Perks of direct selling
On an average in India, nearly 12 million jobs were being generated every year. Due to the pandemic, today this seems improbable. Against this backdrop, direct selling is working out for many because it involves little risk, low investment, self-ownership, flexible timings and offers enough of side income coupled with growth potential. 

*Names changed to protect identity


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