Assocham urges govt to adopt direct selling guidelines

Industry body Assocham has asked the Karnataka government to facilitate speedy implementation of the Centre's guidelines on Direct Selling.

In September 2016, the Centre had issued the Model Framework for Guidelines on Direct Selling, and seven states including Chhattisgarh, Sikkim, Telangana and Andhra Pradesh have adopted it.

According to the model guidelines, a direct selling entity shall not use misleading, deceptive or unfair recruiting practices, including misrepresentation of actual or potential sales or earnings, in their interaction with prospective or existing direct sellers, and it shall have an office with identified jurisdiction of its operation in the state, among others.

"We have got a positive response from the Karnataka government," Vijay Sardana, chairman of Assocham Task Force on Direct Selling, said.

Assocham conducted a regional conference on Promoting Direct Selling for Developing Entrepreneurship and Job Creation in the city and stakeholders exchanged views and spoke about the socioeconomic benefits of direct selling and the need to implement these guidelines.

"Karnataka is the fourth largest market for direct selling after Maharashtra, Tamil Nadu and West Bengal. There is a huge market and opportunity for entrepreneurs out there," said David Stanley, MD of Healux.

According to World Federation of Direct Selling Associations (WFDSA), about 117 million people around the world are involved in this industry, out of which 74% were women. In India, of 5.1 million people involved in direct selling, 60% of them are women. The sector generated $1.5 billion sales in FY18.

The global direct selling industry in 2017 generated $189.6 billion in retail sales.

"Both India and China have 5.1 million and 5.3 million people, respectively, who are involved in direct sales. In China, sales worth $35 billion are generated. Countries like South Korea and Japan, among others, too have a very significant sales numbers," Zaheer K Merchant, Director - Corporate Affairs of Qi, said.

According to the Indian Direct Selling Association (IDSA) survey, Karnataka generated annual sales of Rs 800 crore. The market share of Karnataka in total direct selling sales, which is valued at Rs 10,342 crore, is 7.81%.

A FICCI-KPMG report in 2017 projected the retail sales in direct selling to reach Rs 64,500 crore by 2025.

Rajesh Kumar, MD of Glonutra Corporation, pointed out that the industry can generate both direct and indirect employment opportunities and can create many young entrepreneurs.

All stakeholders pointed out the challenges that encompass a widely misconstrued business model due to lack of a proper regulatory framework, and they hoped that the Karnataka government would soon adopt the guidelines.