NEW DELHI, June 17: Seeking to differentiate itself from fly-by-night multi-level fraudulent marketing schemes, Indian Direct Selling Association (IDSA) has asked the government for a regulatory framework for the sector.
The association, which has 18 companies as members, also said views of the organised players in the direct selling segment must also be considered while framing guidelines and appointing a nodal regulatory body.
“We want specific guidelines to regulate direct selling sector in India. Regulation is needed to differentiate between legitimate direct selling firms…And identify fly-by-night and ponzi scheme operators, which damage the industry,” IDSA Chairman S Subramanian told.
In the recent past numerous fraudulent multi-level- marketing companies and schemes such as Speak Asia, Goldsukh Trade India and Tycoon Empire International have come into public light in India. There have been calls from various quarters to frame regulations to put an end to these frauds.
Stating that the views of the players in the sector should
be considered while framing guidelines, he said: “We want to be heard, want to be a part of process, negotiations to form regulations for the sector.”
He said having a regulatory framework in place will protect consumers’ interest in India and help them differentiate between the genuine direct selling companies from the fraudulent ones.
Already, IDSA has made representations to several government departments and ministries, he added.
“We are talking to the DIPP, Ministry of Consumer Affairs, Ministry of Corporate Affairs and trying also to reach the Ministry of Finance,” Subramanian said.
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location.
The business in India is expected to reach a size of Rs 10,843 crore by 2014-15 on the back of increased consumer spending, according to a report by IDSA and PHD Chamber.
In 2010-11, the total sales of organised direct selling companies in India, including Amway, Tupperware and Oriflame were estimated at Rs 5,229 crore.
Though the growth of the sector varies across its different segments like organised and unorganised sections, it is slated to grow at an average of more than 20 per cent in the next four years.
“Further more, if the same momentum can be maintained in the longer term, then the market size is expected to reach around Rs 21,690 crore by 2019-20,” the report said.
IDSA’s member list includes 18 global and Indian companies like Amway, Avon, HUL, Jafra Ruchi Cosmetics, Oriflame and Tupperware. (PTI)
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