The $100 Million Growth Club for 2013...with Nu Skin leading the way!

The 18 companies that achieved over $100 million in growth in a single year did something so remarkable that very little is written about it. We hope this brief article showcasing these companies and sharing some of their common strategies will inspire many more to focus on a similar achievement for themselves. These companies have not been successful by accident; they have left clues for everyone else to see and follow.

http://directsellingnews.com/index.php/view/the_100_million_growth_club#.U7ZrmpSSwyd

MUMBAI, SEPT. 19:  

That urban Indians can’t spare much time for leisure is well-known. Now, they don’t have enough time to shop either. According to a study, an average urban Indian spends just six days in a year on shopping. At other times, it is alternate retail that swoops in to help.

Alternate retail includes not only the time-tested electronic commerce (ordering online) but also home shopping on TV and direct selling agents who deliver goods at home or workplace. Alternate retail is already a $2.2 billion industry in India, thanks to increasing work pressure, need for work-life balance and challenges of transportation in big cities.

REVENUE GROWTH

While both direct selling and e-tailing are clocking in over a billion dollar in revenues annually in India, home shopping on TV has become a $200-million market, growing at a CAGR of 20 per cent in the last three years, according to the study by consultancy firm Technopak.

Over 50 per cent of those shopping through TV are from the metros while tier 2 and tier 3 cities bring in 60 per cent of the revenues for e-tailing industry.

The growth in alternate retail channels is being driven by two factors – convenience and reach. Urban consumers have increasingly become time-poor. This is leading to a conflict between consumer’s desire and his ability to shop.

“Home shopping offers value as well as convenience. Most of the traffic is from the metros and mini metros,” said Sundeep Malhotra, CEO, Homeshop18, pointing out that the business has been almost doubling annually. Nearly 40 per cent of the orders on home shopping networks are placed between 11 p.m. and 6 a.m., when people are back home from work or are working in night shifts.

Star CJ Alive, another home shopping player, has Delhi and the National Capital Region as its biggest market, followed by Mumbai. “Hyderabad and Bangalore are the fastest-growing,” said its CEO Kenny Shin. The company is clocking nearly 50 per cent sales growth every year.

MORE CHOICE

Deepa Thomas, e-commerce evangelist at eBay, said, apart from convenience, it is also the access to a vast selection of products that makes consumers opt for e-tailing. “A lot of products, which are not available at brick-and-mortar stores, can be purchased online, saving time and effort required in checking various retail outlets,” she added.

For direct selling, it is the free demonstration of products and personal touch in sales that has helped growth. And south India is the biggest market for this industry. “Growth has come mainly from the southern markets. Places such as Bangalore, with its IT entrepreneurs, have led to the growth of this industry,” said Yoginder Singh, Senior V-P, Legal and Corporate Affairs, Amway India.

Ditto for Tupperware. “In the south, consumers are not price sensitive and are more quality conscious and willing to upgrade,” said Asha Gupta, Managing Director, Tupperware India. The company plans to add a new category of nutraceuticals to its India portfolio given the increasing demand from customers.

Technopak says the trend towards alternate retail will continue to grow in the coming decade. “Brands and retailers will need to look at alternate retail channels as an integral driver of growth in the coming decade,” the report added.

FUTURE OF DIRECT SELLING

Direct selling has various formats; Personal Selling, Mail Orders, e-Commerce, Multi Level Marketing etc.  Direct Selling now become a globally accepted business practice for moving goods and achieving global expansion without incurring the massive overheads and investments usually associated with expansion.

In a recent report, The World Federation of Direct Selling (WFDSA) states that a Sales Volume of $153,727 million is generated by various Direct Selling/MLM companies. It is easy to see and understand how this sales volume is achieved taking into account the fact that there are more than 91 million registered independent sales people involved in selling and distributing goods and services worldwide. It also explains why there has never been a decline in sales revenue even in times of recession. These numbers represents only those companies which are registered with WFDSA.  There are almost three times companies which are involved in selling the goods through Direct Selling model, but not WFDSA members.  If we take that numbers too. the size of the industry must be more than $500000million!

In India, this sector has been consistently registering a double digit growth for that last 15 to 20 years.  The growing Indian market has attracted a large number of Indian and foreign direct selling companies. While direct selling and Multi Level Marketing is a relatively new industry in India, yet in just 16 years, it has provided additional opportunity and livelihoods to over 4 million Indian households and has crossed the revenue of Rs 6000 crores. Taxes to exchequer on account of direct selling industry are in excess of Rs 600 crores. Moreover, estimates point that by 2014-15 direct selling business in India will cross Rs.11000 Cr and by 2019-20 the industry will cross Rs.21,690 Cr.  Again these figures represent only the 18 MLM companies who are members of the IDSA.  There are scores of companies which are not part of IDSA, still selling products using the Direct Selling and Multi Level Marketing format.  Hence the actual figures could be at least three times of what is being mentioned above.  Means, more than one Crore families have taken this industry for their livelihood.  From the present more than Rs.10000 Cr the industry will cross Rs.70000 Cr by 2019-20.  

Future is  bright….

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Mayur Gohain

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