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IDSA: Direct selling market reached INR 7472 crores FY 2013-14

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Pune (Nov. 27, 2014): Indian Direct Selling Association (IDSA) in association with PHD Chamber of Commerce and Industry released Annual Survey Report 2013-14 on the Indian Direct Selling Industry today in New Delhi.

“Direct Selling Industry reached at INR 7472 crores in 2013-14 from INR 7164 crores in 2012-13 and INR 6,385 crores in 2011-12.  Due to regulatory bottlenecks, the sector has marked a significant decline in its overall growth this year’ informed Ms.Chavi Hemanth, Secretary General, IDSA.

The total sales revenue by firms during 2013-14 can be split up in to total sales revenue of INR 7,024croreby the companies belonging to organized sector and INR 448 croreby the unorganized sector.

Mr.Ajay Khanna, Chairman, IDSA informed that as per the survey, Bengaluru was ranked the most attractive market followed by Delhi, Ludhiana, Mumbai and Jaipur in 2013-14.

Ms.Chavi Hemanthinformed that Northern region registered a growth of 12.2% in 2013-14 as against 33% in 2012-13.  The northern region contributed around INR 2,170 crores to the gross sales revenue in 2013-14.

The Eastern region has contributed around INR 1345crore to the gross sales revenue in 2013-14 .The Eastern region has scripted marginal increase in share to gross sales revenue at 18% in 2013-14 from 17% in 2012-13 and has registered growth rate of 10.4% in 2013-14 as against 19% in 2012-13.

The North Eastern region has contributed around INR 897crore in 2013-14 . The North Eastern region has also scripted a marginal increase in share to gross sales revenue at 12% in 2013-14 from 11% in 2012-13. The region has exhibited a decline in the growth scenario at 13.8% in 2013-14 from 27% in 2012-13.

The Western region has contributed around INR 1,197 crore in 2013-14. The region has scripted an increase in the share to gross sales revenue at 16% in 2013-14 from 15% in 2012-13 and registered growth rate of 11.4% in 2013-14 as against 9% in 2012-13.

The Southern region has contributed around INR 1,863 crore in 2013-14. The region holds 25% share to gross sales revenue of the industry in 2013-14 as against 30% in 2012-13. The growth of the region stands at (-) 13.3% in 2013-14 as against (-) 14% in 2012-13.

She further stated that during 2013-14 the per-capita revenue generation has scaled up to INR 17,046 from INR 12,404 in 2012-13.

Products related to wellness/healthcare contributed to a lion’s share in the total sales revenue of the organised Direct Selling Industry, by a share of 44%, whereas, beauty/cosmetics and personal care at 33% and home ware and home improvements products have captured 12% shares. This is followed by 6% share of consumer and household durables, 5% share belonging to other categories which include Food and Beverages, Agricultural products, educational products, utilities, promotional items, etc. informed Ms.Chavi Hemanth

Most of the Direct Selling Entities have reported that their product expansion activities have been impacted by the FSSAI policy norms. Dr.S.P.Sharma, Chief Economist, PHDCCIemphasized that on account of delayed approvals, companies are unable to introduce new products and the sourcing of existing products has become a major challenge.

Dr. S.P. Sharma said, “The taxes for IDSA member companies for Year 2013-14 has amounted to INR 1063 rore. However, this year the survey report have also taken into account the indirect taxes for non- IDSA member companies also and the total indirect taxes paid by all the Direct Selling entities amounts to INR 13,22 crore in 2013-14.”

Mr. Ajay Khannainformed that during the survey it was found that each and every stakeholder is focusing on domestic manufacturing.  Almost all the Direct Selling Entities unanimously opined that they are willing to reduce their import of finished goods to less than 10% by 2019-20. It will facilitate indigenous manufacturing in the country and enhance production possibility frontiers.

Ms. ChaviHemanthstressed, “Our survey coincided with the “Make in India” initiative launched on 25th September 2014 by our Hon’ble Prime Minister ShriNarendraModi. For Direct Selling Industry, 70% of their products are manufactured domestically”.

Ms.Chavi Hemanth informed “The total direct seller base stands at 62,37,373 of which 70% are the active direct sellers i.e. 43,83,487.  Women contribute 58.3% in 2013-14 and the share of men has increased to 42%”.

Dr. S.P. Sharma said “In the year 2013-14 untoward incidents have severely impacted the sentiments of the players of this industry.”

Direct selling Industry plays vital role in boosting self-employment, contributing to the exchequer, providing financial stability, encouraging women empowerment and holds immense significance to the overall economic system. At this backdrop, Ministry of Consumer Affairs, Government of India has proposed for creating a new law or direct selling in the light of the law and practices across the globe in consultation with the Ministry of Corporate Affairs, Ministry of Commerce and Industry and Ministry of Finance, informed Ms. ChaviHemanth.

Mr. Ajay Khanna, Chairman, IDSA has commented that the government needs to strengthen the regulatory and policy framework for Direct Selling Industry which should completely weed out the fraudulent financial pyramid schemes out of the market.

The survey report was unveiled by Ms Chavi Hemanth, Secretary General, IDSA ;Mr. Ajay Khanna Chairman, IDSA and  Dr. S.P. Sharma, Chief Economist, PHD Chamber.

IDSA in collaboration with PHD Chamber as an on-going process has benchmarked monitoring of the Direct Selling sector in India. These statistics are one of the imperatives from WFDSA (World Federation of Direct Selling Association