Gurugram industry welcomes change in direct-selling rules

Tribune News Service

Gurugram, June 23

Bringing glad tidings to Gurugram-based direct-selling companies, the Central Government had validated the use of the network of customers by such firms in a notification released on June 21. Over 35 per cent of the customers are women who work from home to make some easy money.

This has brought a major relief to the industry, which is pegged at over Rs 1,000 crore in Haryana and has 20,000 major players in Gurugram alone.

Change in clause gives a fillip to industry

• The companies had long been shadowed by objections and litigations over the use of agent networks. The Consumer Protection Act norms pertaining to direct selling earlier mentioned companies selling ‘through a direct seller’. The particular line in the clause in question has now been amended to ‘directly through a network of sellers’
• This has brought a major relief to the industry, which is pegged at over Rs 1,000 crore in Haryana and has 20,000 major players in Gurugram alone. The ADSEI (Association of Direct Selling Entities of India) had written to the Central Government, seeking respite from legal hassles
• According to a report by Indian Direct Selling Association (IDSA), the direct selling industry grew 7.7% to cross the ?18,000 crore-mark during the financial year, 2021. Besides, employment in the industry shot up amid the Covid pandemic

A direct-selling company is one that sells products and services directly to the consumers, forgoing a fixed retail location. Such a firm mostly markets its products through independent sales representatives. Amway, Oriflame, Avon, Tupperware and Modicare are among the best-known direct-selling companies in India. The companies had long been shadowed by objections and litigations over the use of agent networks. The Consumer Protection Act norms pertaining to direct selling earlier mentioned companies selling ‘through a direct seller’. The particular line in the clause in question has now been amended to ‘directly through a network of sellers’.

The ADSEI (Association of Direct Selling Entities of India) had written to the Central Government, seeking respite from legal hassles. ADSEI Administrator Hem Pandey said the move would give a fillip to the growth of the direct-selling industry in the country.

“This notification was long overdue. Now, all the confusion prevailing in the industry will come to an end, making it easier to operate. This industry helps many, primarily women, become self-reliant. The credibility of this sale model had earlier come under the scanner for want of a network. This simple amendment will give the industry much-needed boost,” added Gautam Bali of the ADSEI.

According to a report released by Indian Direct Selling Association (IDSA), the direct selling industry grew 7.7% to cross the ?18,000 crore-mark during the financial year, 2021. Besides, employment in the industry shot up amid the Covid pandemic. In Financial Year 2021, the total number of direct sellers grew 6.32% to almost eight million as compared to the 7.4 millions who had taken up the direct-selling schemes in FY 2019-20. Globally, the direct-selling industry is pegged at $190 billion, and in India, it is close to $3 billion.

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