In recent years, direct selling has been catching up in India rapidly, Avon, Amway, oriflamme are all now present in India. So is Tupperware, which is in the business of plastic food containers. Recently, Hindustan Lever has also set up its direct selling outfit for selling its Aviance range of cosmetics. Modicare has been using the method for quite some time now for selling its homecare and personal care products.
Two factors have prompted global direct sellers to spread to India. First, direct selling is becoming increasingly difficult-to-practice in countries like the US for a variety of reasons. Thus, they had to go overseas for growth. Second, as the markets of India were opened up following the economic liberalization, entering the country became feasible for these firms.
Oriflame, the Swedish giant, has also entered the direct selling scene in India. It set up its shop in India in 1997 and commenced operations in Delhi, the capital of India, to start with. It secured special import license and imported the products from its manufacturing base at Dublin. It is marketing its products through its countrywide direct selling system, which already has a network of over 15,000 sales persons-cum-distributors, located in over 160 cities/towns. Oriflame pays the sales person-cum-distributor 25% mark up.
More recently, HLL has also opted for the direct selling/MLM method for its new line of high-end cosmetic and skin care products, Aviance. HLL took this decision partly because of the advent of global cosmetics giants such as Avon, Amway and oriflamme into India with their direct selling/MLM outfits, and partly because of the fact that high-end cosmetics lend very well for direct selling.
Plus points of direct selling
In a basic sense, what has been mentioned as the plus points of direct marketing in the article are plus points of direct selling as well. Companies vote for direct selling because it is effective and economic in respect of the products in question. It helps them save channel costs and a good chunk of advertising costs. It also helps them to remain close to the consumers, service them better and get direct feedback. Avon, which direct sells its cosmetics, makes more profits than most cosmetics firms who sell through the conventional retail stores. The system particularly suits products that need demonstrations and educating of consumers, and products, which normally benefits a great deal from the personal interaction between the customer and salesperson. In particular, direct selling makes selling in new markets and selling new products easier compared to conventional marketing.