Counterfeit products hit direct selling, reveals study

Counterfeit products are posing a serious challenge to the ~75-billion direct-selling industry in the country, according to a study conducted by KPMG-FICCI.

“Direct-selling products should not be sold through retail stores. …Many retailers have become direct sellers. …This leakage …through traditional retail channels is contradictory to the very nature of direct selling and needs to be adequately addressed. This channel also encourages the sale of counterfeit products which affects the brand,” the study said. Even though most direct-selling companies initially started in the south, many now have pan-Indian operations. Maharashtra, Tamil Nadu, Kerala and Andhra Pradesh have the highest shares in revenue.

Recently, the industry grew in the eastern part of India, with many firms in tierII and -III cities trying to reach out to customers in untapped markets.

“India is a thriving market for direct selling. According to data issued by the World Federation of Direct Selling Associations, the global direct selling industry reported revenue of $189.6 billion for 2017, with approximately 117 million distributors. About 74 per cent of them are women,” the report said. “India contributed $1.5 billion and provided self-employment opportunities to 5.1 million people. The industry is a great training ground for skills development and for empowering women,” said Pramodh Manda, regional advisor, South Asia, QNet International.

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