New Delhi, Sept 26: Buoyed by the whopping 62.5 per cent growth of the direct selling industry in India last year, nearly sixteen new direct selling companies--both Indian and foreign-are looking at India as a possible business hub. Among the six international companies, four are going to storm the health and nutritional products market, since their core focus area is nutritional and food supplements.These are: Herbalife International, Sunriders, Lifestyles and Nuskin. The category is the fastest growing in the $79 billion global direct selling market.
Of these, the UK-based Herbalife International has set up its office in Bangalore, early this month. A networking company, Herbalife markets a line of nutritional, weight-management, and personal care products in 42 countries worldwide. Herbalife's retail sales have grown at a 21 per cent annualised rate during the past five years, approaching $1.5 billion in 1997. The company's primary growth strategies include: new product development; internationalexpansion; further penetration within existing markets; and innovative distributor marketing and incentive programs.
The focus area of Sunriders, a US-based company, is again dietary supplements. The company is currently awaiting an Foreign InvestmentPromotion Board (FIPB) approval, which it applied for six months ago. Lifestyles, is a UK-based direct selling company, that has just landed in the country and is currently studying the market. Dealing in food and diet supplements, Lifestyles is expected to apply to the FIPB soon. Nuskin, another US company is expected to set up shop here too, to direct sell cosmetics as well as dietary supplements.
Also in cosmetics--one of the fastest growing category in direct selling--and planning to launch in India soon is Virgin Vie, a UK-based company. The company had been studying the local market for the past seven months.
Introducing a new product category--water purifiers--through direct selling will be Filopur, a Sweden-based direct selling company. The companyis currently gathering information and studying the market.
New Indian players
With the launch of Aviance from HLL, in the next six months, at least seven to 10 Indian companies are expected to foray into direct selling actively, through categories as varied as dietary supplements, cosmetics and women's personal products. Significantly, new kinds of products and services are expected to be sold through direct sales in the future, with the new crop of companies exploring areas like: real estate, sales and marketing education programmes, and professional services such as immigration.
Interestingly, ever since the direct selling market was activated by the advent of MNCs, many new Indian players have since joined the direct selling bandwagon.
These include companies like Sunjewels, Dianet, AMC Classic Cookware, Target Multilevel, Modicare, Scholastic, LG Electronics, Daewoo Electronics, Cox and Kings, Japan Life, V All Care, Empower and NIIT.
Some of the new product lines being offered are goldand diamond jewellery, costume jewellery, resin-made gold-plated home decorations and gift items, branded white and brown goods, clothing, sales and training material, table and bed linen, books , health mattresses and even computer software and hardware. The total turnover of the direct selling industry in India for the year 1998-99 was $140 million, recording a growth of 62.5 per cent over the last year. The industry is expected to grow at the rate of 50-100 per cent in the year 1998-99. The fastest growing categories include cosmetics, toiletries and cleaning agents.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.