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IDSA initiates image-building exercise
Pummy Kaul
New Delhi, Sept 29: Concerned that the recent debate on the operations of direct selling companies has harmed the reputation of the industry, the Indian Direct Selling Association (IDSA) has initiated a number of image-enhancing initiatives -- including hectic lobbying with the government.IDSA members currently include: Amway India, Avon Beauty Products, Oriflame India, D K Family Learning, LB Publishers, Lotus Learning, Tupperware India and a recent member Herbalife International India. The new initiatives areas follows: In a bid to initiate a dialogue with key Union Ministries, the Association recently formed a sub-group to prepare a fact-file on the direct selling industry and to highlight the self-regulatory nature of the industry worldwide. Following a series of meetings with the Ministry of Commerce, the sub-group has been asked by the government to prepare a paper detailing the laws governing direct selling companies abroad. Apart from lobbying in the government corridors, IDSA nowplans to organise consumer forum meets with about 350 consumer groups spread across the country. The exercise was started in August with its first meeting with Consumer Guidance Society of India in Mumbai headed by Asha Idnani, chairperson. The Association has also started publishing a quarterly newsletter titled IDSA Direct. The inaugural issue, July-September 1999, is being mailed to the 350 consumer groups, the executives of the World Federation of Direct Selling Associations (WFDSA), and distributors of direct selling companies.In addition to providing an update on the status of the industry and activities of IDSA members, the newsletter clears concepts such as the difference between direct selling and direct marketing, or the direct sale to consumers totally different from retail trading. It also reinforces the code of ethics and the code of conduct to be observed by the members of the Association. IDSA has been making presentations at various member companies' sales managers'conferences, product launches and other meetings, since July '99. Held annually, these events attended by about 250 top rung distributors and managers -- IDSA uses the platform to stress best practices. The Association is also considering the launch of a certification course, on the pattern of the Japan Direct Selling Association. Moreover, in a bid to increase the stress on education and differentiate direct selling from fake pyramid schemes, IDSA is planning to hold educative seminars, in association with the WFDSA, where the financial burden will be split 50:50, between the two bodies.The key concern however, is to win over government approval. The sub-group-led by Pradeep Mathur (Tupperware) and comprising members like David Gosling (Avon), Bill Pinckney (Amway) and Mohan Krishnan (Lotus Learning)-has already met the FIPB secretary Ajit Kumar on August 16, 1999, and presented a paper on self-regulation. Later in another meeting on August 30, with the deputy secretary, Union Ministry ofCommerce, D K Mittal, the delegation was told that the government was keen to evolve a legislation for the direct selling companies and also expressed its willingness to look at the existing laws which were inhibiting the growth of the industry. At the same time, the government is believed to have told the IDSA that since it did not have necessary expertise for formulating a long-term policy/legislation for the direct selling industry, it would like to get inputs from the industry association for putting the policy in place. Accordingly, the government has asked the IDSA to research and collect data about the legislation laws of other countries and submit a paper that would cover the issues to be dealt with in the long-term policy. The government has also expressed deep concern over the operations of certain direct selling companies, which were asking for large public deposits commonly known as pyramid schemes. A Mauritius-based company (name withheld), for instance, in early 1998 shut shop withinthree months-after raising about Rs 1.8 crore. More recently, Maple-Leaf, a direct selling company dealing in gold trading closed operations. Allegedly, the distributors were asked to invest as high as Rs 60,000 in the company operations, even as the delivery system was marred by infrastructure and logistic problems. IDSA's challenge will now be to separate the wheat from the chaff. In fact, a country report drafted by IDSA and submitted to the World Federation Direct of Direct Selling Associations (WFDSA), notes: ``One pyramid scheme can erode the credibility and trust in the concept of direct selling and cause the government to take harsh steps.'' Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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