DIRECT SELLING SEEN TO GROW 10-15PC

Pandemic presents silver lining for industry due to greater health product awareness, says association

MALAYSIA’S direct selling industry sales are forecast to grow between 10 and 15 per cent this year from the estimated RM20 billion last year, despite the emergence of the third wave of the Covid-19 pandemic.

Direct Selling Association of Malaysia (DSAM) president Datuk Tan Chong Guan said the pandemic had presented a silver lining for the sector as consumers were more aware of the importance of health products that would boost their immunity against the virus.

“People realise the importance of (maintaining) good health. Thus, we see an increasing number of consumers buying health supplements via direct selling,” he told the New Straits Times recently.

Tan said direct selling provided an alternative income stream for people affected by retrenchments or pay cuts due to the pandemic.

The sector’s growth would be underpinned by the prospect of having an extra stream of income, online sales and e-commerce platforms, making directselling activities accessible.

According to the DSAM’s 2020 statistics, sales of wellness accounted for 47 per cent, skin and personal care product (19 per cent), household goods and durables (16 per cent), food and beverage (eight per cent), clothing and accessories (five per cent), home care (two), books and toys (two per cent) and home improvement (one per cent).

DSAM has 126 members/establishments, comprising 3.5 million distributors (registered direct selling agents) in Malaysia.

Tan said direct selling served consumers by bypassing third parties. This way, he said, manufacturers could market their products and pass on the savings to end-consumers.

In Malaysia, direct selling is a diversified business with sizeable product categories.

Direct selling, DSAM said, had begun to become a significant distribution channel within the country’s total retail enterprise system.

“Online presence also increases our reach between distributors and customers.”

Although directselling faces stiff competition with the emergence of online sales and ecommerce platforms, Tan said all products sold via direct selling were protected by the Direct Sales and Anti-Pyramid Scheme Act 1993.

Tan said direct selling activities were likely affected by the Movement Control Order 2.0.

“We foresee shipment delays and some may be diverted from certain ports due to the pandemic. Some cases have security and supply issues and clearance delays.”

However, he said, most direct sellers had begun to embrace social media to reach more potential customers while strengthening their relationships with existing buyers.

“Online platforms do not threaten direct selling companies. Instead, they are a crucial element for direct selling companies to embrace. We have to work with e-commerce platforms to reach out to new and existing customers.”

Although online platforms lack that “personal touch” with consumers compared with direct sellers, Tan said DSAM would work with these platforms to regulate direct selling products sold online.

“These products are regulated by prices and cannot be sold online by unauthorised resellers.

“Last year, we proposed this regulation to the ministry, and it has since been enforced. Any direct selling product sold online has to get the approval from the direct selling companies, such as Amway, Forever Living and Herbalife.”

He said the direct selling industry was not a declining one due to its continued reliance on using the “human touch” in selling the products.

“Human touch comprises marketing plan, product demonstrations and incentives.

“Direct selling remains relevant, but we need to evolve and embrace technology to ensure the industry’s survival,” said Tan.

Online platforms do not threaten direct selling companies. Instead, they are a crucial element for direct selling companies to embrace. DATUK TAN CHONG GUAN Direct Selling Association of Malaysia president