The market size of the direct selling industry in the national capital could reach Rs 15-20 billion by 2025 on account of increasing income of middle class households, a report said today.
The FICCI-KPMG India report said that the direct selling industry in India is currently reckoned at Rs 75 billion, recording double digit growth of more than 16 per cent over the past four years.
It has attracted a large number of Indian and foreign direct selling companies, it said.
“This industry has the potential to reach a size of Rs 15-20 billion by 2025, driven by the swelling share of middle income households, growth in consumer markets and an increase in the penetration of direct selling to globally comparable levels,” it said.
The report titled ‘Direct Selling: Delhi – A Global Industry, Empowering Millions’ also suggested that realising this potential is contingent on creating an enabling environment for the industry and mitigating some of the regulatory challenges of the sector.
Quoting S Chandralekha Malviya, Principal Advisor, Ministry for Consumer Affairs, Food & Public Distribution, it said the ministry has prepared the guidelines for the industry and it is in the final stage of approval and will be released “very soon”.
The report further said that the national capital has witnessed a continuous growth in the number of direct sellers in 2013-14 and over 2.5-3 lakh direct sellers were estimated to be engaged with the industry.
It has been observed that with the rising costs of living, the direct selling business is gaining popularity among men too who are looking at it as a supplementary earning opportunity, it added.
The sector will provide self-employment opportunities to 4-5 lakh people by 2025, it said.
Further, it said considering market potential and future growth of the industry, the contribution to the government revenue in the form of indirect taxes is expected to be at Rs 1,500-2,000 million by 2025.
Mentioning about the challenges, it said there is no systematic and standard policy on direct selling and lack of definition and separate provisions for the industry too adversely affects the industry.
“To provide a conducive and sustainable operating environment, a series of reforms are required such as framing state-level rules and standard operating procedures for law enforcement agencies to long term measures including enacting a specific governing legislation for the sector,” it added.