From a Rs. 4000 Cr industry in 2010-11 to an estimated Rs. 11,000 Cr industry by 2015, the direct selling industry promises to be a growth machine! In fact analysts peg the industry to grow to a size of about Rs. 22,000 Cr by 2020! All thanks to the ever growing distributor base which was about 40 lakhs by 2011.
But the growth comes with a word of caution, which has made the Indian Direct Sellers Association to come up with its code of ethics for the direct sellers and companies involved in it. The Association came up with the code with some objectives in mind, some of which include, ethical promotions and advertising, sales conduct, product demos, clarity in the model and terms of payment, provisions for redressal and mechanisms to ensure the code is being observed!
The primary concern of the code is safeguarding the interests of the consumer, hence directs direct sellers not to mislead or misrepresent any information and resort to unfair selling practices. The code specifies that during the start of the presentation, the seller must identify themselves, the company and its products & what is the purpose of solicitation. At the time of explanation, the demo should be complete and all details must be clearly put forward. The code also lays guidelines for sellers to provide all relevant literature and refrain from using any unauthorized testimonials and promotions. The sellers must also disclose the terms of return and replacement, cooling off period and must ensure all activities are fair to the consumer. This was from a seller-buyer relationship perspective.
From a company standpoint, the association also expects the direct selling companies to comply with the code which involves following the guidelines in recruiting the sales persons, providing the right information, providing the right remuneration and publishing the correct earnings instead of fabricated balance sheets to lure more people into the business. Other important guidelines companies must adhere to is the adequate and proper training of the sales persons.
Well its quite clear that the Indian Direct sellers Association is on the consumer’s side and takes steps to ensure the code is adhered to! We can then surely say the growth of the Direct Selling industry is quite an organic one!