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Wednesday, February 13, 2008

Direct Marketing..

Direct marketing is nothing but direct selling. Direct selling is one of the fastest growing industries in India and is an unusually good income generator for entrepreneurs from all walks of life. In addition, direct selling offers consumers a convenient and more informed way to buy, along with money-back guarantees and refund policies. According to the Indian Direct Selling Association, the direct selling industry reported a total turnover of $545 million (Rs. 24 billion) during fiscal year 2004-05.

In India, direct selling traditionally meant contracting of outside agencies by manufacturers to move surplus or promotional products or small manufacturers resorting to door-to-door selling because of their inability to compete in the retail market. It has also meant deploying direct sales employees to demonstrate products with the objective of making a spot sale. The traditional view of direct selling is changing. One of the first Indian companies to practice direct selling in India was Eureka Forbes, which sells a range of household appliances through direct selling. Though some form of direct selling had been in practice in India, a new wave of interest to sell in the Indian market through the modern concept of direct selling has begun only during the last decade.

Currently, the direct selling industry employs more than 1.3 million people, an increase of 100,000 from 2003-04 to 2004-05. There are about 750,000 active direct sales executives (including both men, women and couples working as a team) who buy or sell products at least once every two months. The total number of product offerings increased to 380 with 2,100 variants and product categories ranging from cosmetics to kitchenware, education, home care and natural products.

In recent years, thousands of Indian women and, increasingly, men are taking to direct selling in India to supplement salaried incomes. Rather than sales people they call themselves consultants, book advisors, dealers and beauty advisors. Other than a minimum age requirement by law, no qualifications are needed. Training is critical element of direct selling and most companies do offer some training. The dropout rate in this method of selling is high.

India has strong potential for direct selling because unemployment and underemployment is perennial. Multinational direct sellers have been quick to sense an opportunity in India’s post-liberalization economy. Due to the industry’s high growth potential, the direct selling industry association is already gearing up to get systems in place to protect consumer interest and respond to inquiries. It has released a code of ethics that member-companies have to adhere to.



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