Key Socio–Economic Facts

WFDSA completed socio-economic studies (SEIS) in our largest direct selling markets: Brazil,Colombia, Canada, Japan, India, Korea, Mexico, Peru, Russia, South Africia, Taiwan, Thailand and the United States.

WFDSA completed socio–economic studies (SEIS) in our largest direct selling markets: Brazil, Canada, Columbia, Japan, India, Korea, Mexico, Russia, Taiwan and the United States. The outcome of these studies can be extremely useful in helping your association and its member companies promote the direct selling industry’s size, scope and positions with government, media and other audiences. For key soci–economic facts from these studies, please click here If your company participated in any of the SEIS studies and you would like to obtain a copy of the study, please contact WFDSA at info@wfdsa.org. Non–members and consultants may purchase each study for $1,800. Please contact WFDSA to place your order.

Brazil Socioeconomic Impact Study

Industry Overview

Direct selling is a large, growing and unique industry in Brazil. Sales have increased by more than 121 percent over the past five years, from BRL 4.7 million in 1999 to BRL 10.4 billion in 2004.
Direct selling provides significant economic and social contributions to Brazilian families and to the country as a whole. The industry offers an alternative income source and schedule flexibility for Brazilian households.
Direct selling offers a wide variety of products, ranging from food to services. The largest categories of product sales are personal care products (BRL 9 billion of sales), followed by food products (BRL 0.5 billion) and household products (BRL 0.3 billion).

Benefits to Consumers

Direct selling serves hard to reach consumers: It increases access to retail markets in rural areas generally underserved by traditional retail channels, providing consumers with access to additional goods they might not otherwise be able to find.
Ten percent of direct selling consumers live in rural areas and 10 percent of direct selling customers are age 61 or older.
Direct selling organizations gave an estimated BRL 23 million to charitable causes in 2004.

Size of Industry

In 2004, there were approximately 1.5 million Brazilians associated with the direct selling industry: most of these are direct sellers who received compensation (commissions, overrides or bonuses) from direct selling companies.
The growth rate for retail sales in 2004 was 27.4 percent, compared with 9.3 percent growth rate for retail sales in general.
The direct selling industry in Brazil is comprised of approximately 300 companies, with total sales revenue of BRL 10.4 billion in 2004 and includes such household names as Amway, Avon, Mary Kay, and Herbalife. Brazilian–based companies include: Aretta Cosmeticos and Contem 1g.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the Brazilian economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development spending, and pay taxes.
The industry’s associated labor pool includes 12,000 permanent employees and 1.5 million direct sellers. The combined labor force earned an estimated BRL 3.6 billion through their association or employment with the direct selling industry in 2004.
Total labor compensation, including BRL 474 million in wages paid to permanent employees and BRL 3.2 Billion of commissions and bonuses awarded to direct sellers, represents a significant direct economic impact of the industry’s activity in Brazil.
More than 94 percent of direct sellers are women; most are married with three or more people in the household. The demographics of the industry are family –oriented, and demonstrate its uniqueness in providing entrepreneurial opportunities for women that might not be available to them otherwise.
Associated value: The direct contribution includes BRL 3.643 billion from employment, BRL 1.36 billion of which comes from tax revenues. In addition, indirect and induced contributions through purchases of products and services from other Brazilian companies and employee spending created BRL 2.071 billion, BRL 1.9 billion of which was generated by taxes.
The industry’s contributions to jobs, income, investment, and research and development results in increased tax collections for the government. Taxes generate BRL 3.16 billion –– 1.36 billion direct, and 1.9 billion indirect.

The industry contributes considerably to Brazilian’s quality of life. Entrepreneurship, work schedule flexibility, and opportunities to develop personal business skills are a few of the major benefits.
Direct sellers are generally pleased with their experience in the industry. Sixty–eight percent described themselves as either “somewhat satisfied” or “very satisfied” with direct selling activities.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…[Direct selling] brought me benefits in terms of living expenses… as well as leisure travel – it’s extra money that makes me feel more independent and allows me to meet new people.

–Comments from a direct seller

Colombia Socioeconomic Impact Study

Industry Overview

Direct selling is an important economic sector in the Colombian economy. Sales have increased over the past four years, from COP 2.05 billion in 2006 to COP $ 2.5 billion in 2009.
Direct selling contributes significantly to the Colombian economy both financially and in terms of the quality of life.
Direct selling offers a wide variety of products. The largest categories of product sales are cosmetics and also personal care (63 percent of the total sales) followed by clothing and accessories (12 percent of total sales), after these, wellness (11 percent are the total of sales), after household goods (that represents 10 percent of the total sales) and finally, food stuff and beverages (in a 4 percent of the total sales).

Benefits to Consumers

Direct selling in Colombia gives both men and women a better quality of life regardless of soci-economic background, education level or age.
Direct selling is an income source for people who live in regions that doe not have enough job opportunities.
Direct selling companies in Colombia provide a percentage of associations, foundations, projects, etc, that work to improve the way of life.
Direct selling companies offer many additional benefits for men and women such as: prizes, gifts or incentives. At the same time, it increases the interpersonal relationships and economic independence.

Size of Industry

In 2008, direct selling was COP 2.4 billion and the growth rate for sales in 2009 was 1.8 percent.
The total of the direct selling companies’ including consumer sales products and services without VAT, excluding sales aids and materials during 2009 that was COP 2.5 billion. The industry is comprised of more than 28 companies, including a number of global companies, such as Avon, Amway, Herbalife, Oriflame, Omnilife, 4Life, Marketing Personal, Creaciones Pachicas, Natura, etc.
In 2009, the number of direct sellers for the entire direct selling industry in Colombia was 900,000 and 95 percent of salesforce are women, 77 percent are older than 35 years old and 48 percent are heads of the household.

Economic/Fiscal/Social Contributions

In 2009, direct selling organizations gave an estimated COP 13 million to ACOVEDI towards Corporate Social Responsibility (CSR).Social Responsibility.
Direct selling is a system that does not discriminate against age, culture, political preference, etc, it is an industry that opens the door to many men and women that want to obtain an income source
Direct selling companies have the obligation and responsibility to support all programs about tax culture in Colombia.
Direct selling companies contributes significantly to help improve the quality of life for men, women and children who have been affected by social and economical problems.
Direct selling contributes to the Colombian economy. Direct selling companies make capital investments, fund research and development spending, and also pay taxes.
Associated value: The economic factor is very important (subsistence and protection), but the needs it satisfies are very different. Direct selling have a powerful to involve the entire life of the woman, his family and his social context.
Direct selling is an activity that helps fill a void, an emotional state, caused by personal, family or social factors.
Through direct sale vendors have the opportunity to attend training that will give them an excellent business visions
Some regions in Colombia have obtained benefits from the direct selling companies which are working in those places. These regions obtain recognition and better economies to Colombia.

Conclusion

The direct selling industry is an excellent way to Improve the quality of life of Colombian society. Through direct sales, men and women have another source of income; improve your relationships, economic independence to improve self-esteem, etc.
The direct Selling industry contributions in the country’s economy, at the same, helps to improve the socio-economical problems, because through the programs that this industry have established and contributions to organizations that help the Colombian population.”

“If I sell a lot of products, I can get them fairly inexpensive”

“Is good because it is a satisfaction that you can give the people you love… apart from gifts. Because I help regularly, on birthdays, at Christmas, I give them all their gift, a bag of cologne, a cream, that gives them a lot of joy”

“I combine the two jobs, to my clients I can be doing their nails and I’m telling them “Hey look I have the magazine you can have a look”, or if I have products, I let them see the products in the bag”

–Comments from a direct seller

Canada Socioeconomic Impact Study

Industry Overview

Direct selling is a large, growing and unique industry in Canada. Sales have increased by over 12.4 percent over the past three years, from $1.74 billion CAD in 2000 to $1.96 billion CAD in 2003.
Direct selling provides significant economic and social contributions to Canadian families and to the country as a whole. The industry offers an alternative income source and schedule flexibility for Canadian households.
Direct selling offers a wide variety of products, ranging from food to services. The largest categories of product sales are personal care products ($971 million of sales), followed by health products ($476 million) and household products ($359 million).

Benefits to Consumers

Direct selling serves hard to reach consumers: It increases access to retail markets in rural areas generally underserved by traditional retail channels, providing consumers with access to additional goods they might not otherwise be able to find.
Twenty–six percent of direct selling consumers live in rural areas while 13 percent of direct selling customers are age 65 or older.
Direct selling organizations gave an estimated $3.6 million to charitable causes in 2003 and again in 2004.

Size of Industry

In 2003, there were approximately 1.3 million Canadian workers associated with the direct selling industry: most of these are direct sellers who received compensation (commission, overrides or bonuses) from direct selling companies.
The direct selling industry in Canada is comprised of xx (41 DSA), with total sales revenue of $1.96 billion CAD and including such household names as Amway/Quixtar, Avon, Mary Kay and Nu Skin.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the Canadian economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development spending, and pay taxes.
The industry’s associated labor pool includes 3,900 permanent employees and 1.3 million direct sellers. The combined labor force earned an estimated $966 million through their association or employment with the direct selling industry in 2003.
Total labor compensation, including $194 million in wages paid to permanent employees and $772 million of commissions and bonuses awarded to direct sellers, represents a significant direct economic impact of the industry’s activity in Canada.
More than 88 percent of direct sellers are women, most of whom are married. The demographics of the industry are family –oriented, and demonstrate its uniqueness in providing entrepreneurial opportunities for women that might not be available to them otherwise.
Associated value: The direct contribution includes $966 million and $488 in tax revenues. In addition, indirect and induced contributions through purchases of products and services from other Canadian companies and employee spending created $438 million, $228 of which was generated by taxes.
The industry’s contributions to jobs, income, investment, and research and development results in increased tax collections for the government. Taxes generate $716 million –– $488 million direct, and $228 million indirect.
The industry contributes considerably to Canadian’s quality of life. Entrepreneurship, work schedule flexibility, and opportunities to develop personal business skills are a few of the major benefits.
Direct sellers are generally pleased with their experience in the industry. Seventy percent described themselves as either “somewhat satisfied” or “very satisfied” with direct selling activities.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…[I have a] better understanding of personalities that helps [my] personal and professional relationships. [I have a] more positive outlook, [am] better able to influence and help others, [have] better family relationships, increased knowledge, and better health.

–Comments from a direct seller

Japan Socioeconomic Impact Study

Industry Overview

Direct selling is a vibrant industry within the Japanese economy and community. The industry accounts for 2.2 percent of total retail sales in Japan.
Economic activity generated by the direct selling companies resulted in an estimated ¥ 592 billion in total national and local taxes to the Japanese government in 2003. Total economic contribution is ¥ 7,107.4 billion.
Japan has more direct sellers than any other Asian country, although the participation rate is lower (18.2) due to the larger population.
Direct selling offers a wide variety of products, ranging from food to services. The largest categories of product sales are personal care and cosmetics (¥1,425,166 million), followed by nutrition (¥930,080 million).

Benefits to Consumers

Direct selling serves hard to reach consumers: It increases access to retail markets in rural areas, generally underserved by traditional retail channels, and provides customers age 61 or older with access to additional goods they might not otherwise be able to find.
Direct selling organizations gave an estimated ¥15.3 million to charitable causes in 2003.

Size of Industry

There are 7 million Japanese associated with the direct selling industry. As of 2003, there were approximately 1,300 direct selling companies in Japan. There is one direct seller for every 18.2 people in Japan.
Direct selling industry revenues in Japan totaled ¥2,821 billion in 2003. With retail sales totaling ¥128,231 billion in Japan. The industry includes a number of global companies with household names, such as Avon, Amway, and Tupperware. Japanese–based companies include Miki Shoji, Nikken Sogyo, Fuyo Company, Pola Cosmetics, Nikken Sohonsha, Oppen Cosmetics, and Nippon Menard.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the Japanese economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development spending, and pay taxes.
An estimated 29,500 people were employed by direct selling companies in 2003, earning an estimated NT$1,396 billion in wages, salaries and other compensation from the industry.
The number of direct sellers receiving commissions, overrides, and bonuses was approximately 2,000,000.
Direct sellers are predominantly women (92%). The direct selling industry provides business opportunities for women that may have been previously unavailable. The industry is family–oriented; many couples work together.
Associated value: The industry buys products and services from other Japanese companies (suppliers), supporting additional Japanese jobs – an effect referred to as “indirect employment contribution” (¥361 billion, 2003). Income earned by direct sellers and employees of the industry and its suppliers becomes personal income (¥1,396 billion, 2003) part of which is spent as consumers. These activities support additional jobs in various economic sectors, and are referred to as “induced employment contribution” (¥662 billion, 2003).
The industry’s contributions to jobs, income, investment, and research and development results in increased tax collections for the government. Taxes generate NT¥592.1 billion –– ¥364.7 billion direct, and ¥227.4 billion indirect.
The industry contributes considerably to Japan’s quality of life. Opportunities to “meet and socialize”, utilize work schedule flexibility, and develop personal business skills are a few of the major benefits.
Direct sellers enjoy discounts on products and attribute the opportunity to buy products for their own use as the greatest benefit for being in the profession.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…I have become more open–minded by meeting so many people. I can see different points of view and am less judgmental. I have also become more positive in my outlook. These changes have affected my children, too.

–Comments from a direct seller

India Socioeconomic Impact Study

Industry Overview

Direct selling is one of the fastest growing sectors in India.
The direct selling sector has grown from INR 26.6 billion (US $ 0.583 billion) in 2004 to INR 33.3 billion (US $ 0.730 billion) in 2008 (US $ 1 = INR 45.58 for current and all future currency conversions).
In terms of volumes of sale, the direct selling sector is led by personal care and cosmetics sector valued at INR (US $), followed by household products valued at INR (US $) and healthcare products valued at INR (US $).

Benefits to Consumers

Almost 80 per cent of the consumers for the direct selling sector come from middle income families with monthly household incomes between INR 10,000 â€“ INR 40,000 (US $ 219.5 â€“ US $ 877.7). The sector also caters to 16 per cent of consumers who have household incomes less than INR 10,000 (less than US $ 219.5), clearly indicating that the direct selling sector caters to the middle class rather than the elite.
Almost 90 per cent of the consumers perceive direct selling products to be of superior quality. In fact, a majority of consumers (55 per cent) were willing to pay a further premium on personal care products. Similarly, 41.9 per cent of consumers were willing to pay a premium on healthcare products.
80 per cent of the consumers strongly believe that direct selling is an easy and time saving way to shop for goods.

Size of the Industry

The direct selling sector is valued at INR 35 billion ($ 0.76 billion) in 2009. Direct selling companies are expecting their year-on-year growth rate, for the next five years, to be 20-22 per cent. Assuming a conservative growth rate of 15 per cent CAGR, the direct selling sector will be valued at INR 80.96 billion (US $ 1.77 billion) in 2014.
The direct selling sector had provided self employment opportunities to nearly two million entrepreneurs in 2004. This figure has now grown to 3.5 million in 2008.
The direct selling sector in India has many foreign brands, such as, Amway, Avon, Forever Living Products and Tupperware to name a few, and domestic players, such as, Modicare, Hindustan Unilever Network and Altos, to name a few. India, however, is still awaiting the entry of many more popular foreign direct selling companies, such as, USANA, NSA, NUSKIN and PRECISION3, to name a few.

Economic/Fiscal/Social Contributions

Direct selling companies have contributed INR 5 billion (US $ 0.10 billion) in 2008 as taxes to the exchequer. The contributions are expected to double to INR 10.06 billion (US $ 0.22 billion) by 2014.
The value of manufacturing services is INR 11.55 billion (US $ 0.25 billion) as of 2008, of which the outsourced value of manufacturing stands at 75 per cent of the total, equalling INR 8.66 billion (US $ 0.19 billion) for 2008.
Indirect taxes, resulting from these manufacturing units is valued at INR 0.7 billion (US $ 0.015 billion) in 2008
The direct selling sector is expected to provide self employment opportunities to nearly 8.1 million entrepreneurs by 2014
Nearly 25 per cent of direct sellers had not worked before joining the direct selling sector. A further 21 per cent were either employed part time or self employed. This means that many direct sellers, who previously were not paying income tax, are now contributing to the exchequer depending on their personal incomes.
Nearly 60 per cent of the direct sellers are male, indicating that the sector is popular not just amongst women but also amongst erstwhile full time employed men. This is also indicative of the fact that direct selling is developing into a family activity.
Direct sellers are between the age group 18-49 years of age. India has a large number of young people and direct selling can provide these people excellent entrepreneurial opportunities.
50 per cent of direct sellers come from households with 3-4 people and 26 per cent come from households with 5-7 people. Direct selling has been a source of additional household income for direct sellers.
Nearly 76 per cent of direct sellers strongly agree that direct selling has helped them build their self esteem and confidence levels.

Conclusion

Direct selling has been responsible in not only contributing to a household income, but has also helped develop entrepreneurial skills amongst people.
The direct selling sector is only in its nascent stages in India. But with a sizable workforce and with many people wanting to become independent entrepreneurs, this sector will undoubtedly become one of India’s fastest growing sectors.

Peru Socioeconomic Impact Study

Industry Overview

Direct selling in Peru has a biggest participation in the market than retail channel, which is around 54%, and provides significant economic and social contributions for more than 350,000 independent entrepreneurs and their families.
For consumers, they buy through direct selling because they know the independent entrepreneur; the product has good quality and confidence. For direct sellers, it provides the opportunity to have another source of incomes, the opportunity to have their own business, buy products at lower prices for themselves, and the minimum investment to enter. It also enables Prizes, which is a highly valuable benefit to many people.
In Peru, direct selling is a large, growing and unique industry that offers a wide variety of products, but the best sellers are: personal care (68%), cosmetics (49%), skin care (40%) and jewelry products (28%).

Benefits to Consumers

In Peru, the consumers consider as benefits: know the independent entrepreneur, products with good quality, trust, affordable prices, don’t need to move out of home/office, can buy anytime and service personalized.
The usual consumers for direct selling are people from 25 to 39 years, and the 59% of them are women.

Size of Industry

Direct selling is a growing industry in Peru and is also rapidly expanding into other areas of Peru.
Members of CAPEVEDI are national and global companies: Unique, Avon, Belcorp, Natura, Herbalife, Oriflame, Dyclass, Leonisa, Dupree, 4life, Forever Living, Swissjust and Tahitian Noni.
The direct sales in Peru represent around 1,167 millions of dollars in 2011, giving the opportunity to be part of the “Million Club of Countries” in direct sales.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the Peruvian economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development, and pay taxes.
It provides wages/salaries to direct selling company employees, and rebates/commissions/compensation to its self-employed direct sellers (around 350,000 independent entrepreneurs).
In Peru, according to our market research, 90% of direct sellers are women (67% aged 40 or more), and the majority are married, with, on average, five people in the household. Of those who said that their partners are not also direct sellers (91%).
Many people in the age group 40+, and recognize the benefits of direct selling and the entrepreneurial opportunity it offers with financial independence and development beyond the “official” retirement age.
Direct sellers are generally pleased with their experience in the industry.
90% described themselves as either “very satisfied” with direct selling activities.

Conclusion

The Direct Selling industry’s contributions to peruvian families and the Peruvian economy are significant and important. The industry provides much needed employment, and many people over 40 years are beneficiated with this kind of business improving their quality of lives and providing incomes to their families.
Whilst economic contributions of jobs, personal income, investment, and taxes can be quantified and shown to have a positive overall economic impact (350,000 independent entrepreneurs), equally as important is the recognition of the outstanding social contributions that are made to communities as well as individual families’ lives and well-being.

Russia Socioeconomic Impact Study

Industry Overview

Direct selling is a vibrant industry within the Russian economy and community. In 2004 total sales revenue reached 36.5 billion RUB.
Economic activity generated by the direct selling companies resulted in an estimated RUB 7.97 billion in total national and local taxes in 2004. Total economic contribution is approximately RUB 57,795 million.
Sales have increased by nearly 380 percent over the past three years, from RUB 7.6 billion in 2001 to RUB 36.5 billion in 2004.
Direct selling offers a wide variety of products, ranging from food to services, but selling in Russia was mainly concentrated in personal care products (RUB 35, 896 million), health products (RUB 509 million) and service products (RUB 20 million).

Benefits to Consumers

Due to its cost efficiency and flexibility, the direct selling method of goods distribution has developed not only in big cities, but also in small and mid–size towns of the Russian Federation, including remote regions. Contrary to big trading companies, direct sellers are interested in selling good and providing services to any consumers, regardless of their location.
Direct selling organizations gave an estimated RUB 4.0 million to charitable causes in 2004.

Size of Industry

There are over 2.3 million Russians associated with the direct selling industry. The industry’s associated labor pool includes 3,160 permanent employees and 2.3 million direct sellers.
Direct selling industry revenues in Russia totaled 36.5 billion RUB in 2004. The industry is comprised of more than 35 companies, including a number of global companies with household names, such as Avon, Amway, Herbalife, Mary Kay, Oriflame and Tupperware. There are also a number of Russia–based companies, including Faberlic.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the Russian economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development spending, and pay taxes.
The combined labor force earned an estimated RUB 7.7 billion through their association or employment with the direct selling industry in 2004.
Total Labor compensation, including over RUB 680 million in wages paid to permanent employees and RUB 7.0 billion of commissions and bonuses awarded to direct sellers, represents a significant direct economic impact of the industry’s activity in Russia.
Direct sellers are predominantly women (95%). The direct selling industry provides business opportunities for women that may have been previously unavailable. This leads to improved earning power and quality of life for Russian families.
Associated value: The industry buys products and services from other Russian companies (suppliers), supporting additional Russian jobs – an effect referred to as “indirect employment contribution”. Income earned by direct sellers and employees of the industry and its suppliers becomes personal income (9,579 million RUB, 2004) part of which is spent as consumers. These activities support additional jobs in various economic sectors, and are referred to as “induced employment contribution.” Combined, indirect and induced income impact totaled 1,883 million RUB, 2004.
The industry’s contributions to jobs, income, investment, and research and development results in increased tax collections for the government. Taxes generate 7,968 million RUB – 7,202 million RUB direct and 765 million RUB indirect.
Direct sellers enjoy discounts on products and attribute the opportunity to buy products for their own use as the greatest benefit for being in the profession.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…I started reading more, setting goals for myself and achieving these goals…Now I know for sure that there’s nothing I cannot achieve. Everything depends on me. At my (primary) work people say that when they look at me they want to live again. It is true because, probably, I just love the whole world, my family, my clients and it just makes you want to live, love and dream! I thank my company for this and my sponsor. Now I can give beauty to the people and nothing could be better than this!

–Comments from a direct seller

South Africa Socioeconomic Impact Study

Industry Overview

Direct selling in South Africa is a rapidly expanding channel of distribution that provides significant economic and social contributions to South African families and to the country as a whole.
For consumers, direct selling provides convenience, quality and value for money. For direct sellers, it provides the opportunity of self–employment with modest start–up costs and minimal risk, or as an additional or alternative income source. It also enables flexible working hours, which is a highly valuable benefit to many people.
Accounting for 1.2% of total retail sales in South Africa, direct selling industry revenues in South Africa totaled R 5,3–billion in 2007, an increase from R 4,1–billion in 2005.
Direct selling is a large, growing and unique industry that offers a wide variety of products ranging from household products, personal care, health and wellness, fragrance, cosmetics and jewellery to educational and financial products. Sales in South Africa are concentrated in household goods (27% of sales), health and wellness (24% of sales), financial products (15% of sales) and personal care products (11% of sales).

Benefits to Consumers

In many of the rural areas of South Africa, which sprawl across large geographic locations, and even in some of the regional city suburbs, not all consumers are able to find what they need in their local retail stores nor do they have the benefit of non–store retail channels, such as the Internet. Direct selling fills this gap, with increased access to a wider range of products.
Direct selling also serves the older consumer, some who no longer find it convenient to visit local retail outlets and prefer the ease of direct selling. 34% of direct selling consumers live in rural areas and 24% of direct selling consumers are age 50 or older.
Whilst it is difficult to give an estimated Rand value to the contributions made by direct selling companies to charitable causes, 36% of direct selling companies contribute money, goods, services and volunteer hours to social programmes on a regular basis.
Direct sellers also get involved with the community: 46% are involved with community service, 44% with church outreach, 35% with charity drives, and 26% assisting with educational needs (More than 100% as involvement is across more than one activity).

Size of Industry

Direct selling is a growing industry in South Africa and is also rapidly expanding into other areas of southern Africa.
In 2007 there were more than 50 direct selling companies in South Africa with total sales R 5,3–billion, increased from R 4,1–billion in 2005.
Members include a number of global companies with household names such as Amway, Avon, Avroy Shlain Cosmetics, Herbalife, Tianshi and Tupperware, as well as many well–known South African based companies, including Africa Direct, AMC Cookware, Annique, Clientele Life, GNLD, Pres Les, Sportron and Swissgarde.
933,772 South Africans were associated with the direct selling industry as direct sellers as of 2007, and had a sales penetration rate of 32.55 (one direct seller for every 32.55 people in South Africa, based on working population aged 15–65).

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the South African economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development, and pay taxes.
It provides wages/salaries to direct selling company employees, and rebates/commissions/compensation to its self–employed direct sellers. It’s purchases of goods and services from other South African companies assists to provide employment and income to the employees of those companies. Spending by direct sellers and employees of direct selling companies and their suppliers also generates employment, personal income and taxes in the South African economy.
The industry’s associated labour pool includes approx. 3,700 permanent employees and 933,772 direct sellers. The combined labour force earned an estimated R 2,614–billion through their association or employment with the direct selling industry in 2007.
Through additional ‘indirect employment contributions’ and ‘induced employment contributions’, an estimated additional R 654–million in South African personal income was created, giving a total impact on income of the industry in South Africa of R 3,268–billion.
The direct selling industry’s contributions to jobs, income and investment result in tax collections for the South African government. In 2007 this resulted in an estimated R 588–million in total direct and indirect taxes at the national and local levels of government.
82% of direct sellers are women (48% aged 35–49), and the majority are married, or living with a life partner, with, on average, five people in the household. Of those who said that their partners were also direct sellers (26%), 84% said they run the direct selling business together. Many people in the age group 50+ are recognising the benefits of direct selling and the entrepreneurial opportunity it offers with financial independence and development beyond the “official” retirement age.
The industry has been successful in reaching out to women and families who often strive for a more flexible work arrangement, with increased quality of life.
Direct sellers are generally pleased with their experience in the industry. Seventy–six percent described themselves as either “very satisfied” or “somewhat satisfied” with direct selling activities.

Conclusion

The Direct Selling industry’s contributions to South African families and the South African economy are significant and important. The industry provides much needed employment, and many more people are discovering and embracing this opportunity for the first time such as the historically disadvantaged, the physically challenged, and an older group of people who otherwise are likely to face a difficult retirement with minimal income and financial reserves.
Whilst economic contributions of jobs, personal income, investment, and taxes can be quantified and shown to have a positive overall economic impact, equally as important is the recognition of the outstanding social contributions that are made to communities as well as individual families’ lives and well–being.
Of great further benefit, in addition to the income earnings opportunities, the increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers and their families, and with this they are able to positively impact their communities and their country.

Through direct selling … “I have gained in self–confidence. I am able to afford things that I could not normally have afforded. I have developed very special friendships with my upline and downline direct sellers, and also customers. This work has completely changed my life!; “Our finances have improved – we are on our way to financial freedom! We have more time, freedom and flexibility. We spend more quality time with our family and friends. We are more positive and proactive (self–reliant, independent) and we have better health and well–being”; “I have helped others to realise their dreams, like buying cars, and, for myself, I have achieved my goal of living a better life.”

–Comments from a direct seller

South Korea Socioeconomic Impact Study

Industry Overview

Direct selling maintains a significant place in South Korean society. It is a large, unique industry accounting for 5.5 percent of total retail sales.
Sales from direct selling have more than doubled over three years from W 3.5 trillion in 2000 to W 7.9 trillion in 2003. Although, direct selling decreased by almost 26 percent from 2002 to 2003, and during this time, GDP growth in South Korea slowed from almost 10 percent in 2002 to 5.4 percent in 2003.
Direct selling in South Korea provides significant economic and social contributions to South Korean families and to the country as a whole. The industry offers an alternative income source for South Korean households.
Direct selling offers a wide variety of products, ranging from food to services. The largest categories of product sales are personal care (W 2,613 billion), health products (W 1,633 billion), followed by household (W 1,480 billion).

Benefits to Consumers

Direct selling serves hard to reach consumers: It increases access to retail markets in rural areas, generally underserved by traditional retail channels, providing consumers with access to additional goods they might not otherwise be able to find.
Direct selling organizations gave an estimated 780 million won to charitable causes in 2003.

Size of Industry

The number of people associated with direct selling has more than doubled from 2.0 million to over 4.5 million in 2003. The highest annual growth rate was from 2001 to 2002, with a one–year jump of 70 percent. Between 2002 and 2003 the number of direct sellers decreased by 14 percent.
Direct selling industry revenues in South Korea totaled W 7.9 trillion in 2003. With retail sales totaling 145 trillion won in South Korea. The industry includes a number of global companies with household names, such as Avon, Amway, and Mary Kay. South Korean–based companies include Woongjin, Kyowon Group, Coreana Cosmetics, and Korea Cosmetics.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the South Korean economy both financially and in terms of quality of life. Direct selling companies generate employment, personal income and taxes.
An estimated *4.5 million South Koreans were associated with the direct selling industry in 2003, earning an estimated 1,850 billion won in wages, salaries and other compensation from the industry.
The number of direct sellers receiving commissions, overrides, and bonuses was approximately 1.6 million.
The majority of direct sellers in South Korea are women (63%). The direct selling industry provides entrepreneurial opportunities for individuals that may have been previously unavailable.
Associated value: The industry buys products and services from other South Korean companies (suppliers), supporting additional South Korean jobs – an effect referred to as “indirect employment contribution” (W1,171 billion, 2003). Income earned by direct sellers and employees of the industry and its suppliers becomes personal income (W1,850 billion, 2003), part of which is spent as consumers. These activities support additional jobs in various economic sectors, and are referred to as “induced employment contribution” (W863 billion, 2003).
The industry’s contributions to jobs, income, and investment result in increased tax collections for the South Korean government. Total national and local taxes generated in 2003 were an estimated 1,457 billion won.
The industry contributes considerably to South Korea’s quality of life. Entrepreneurship, work schedule flexibility, and opportunities to develop personal business skills are a few of the major benefits.
Most direct sellers are pleased with their experience in the industry. Over eighty one percent describe themselves as either “somewhat satisfied” or “very satisfied” with their activities.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…My company consists of housewives, thus a company of a unique nature. We have ethical and sound business operations…provide opportunities for women to engage in social activities…our associates and we, the company, grow & benefit together. Hence we are adding value.

–Comments from a direct seller

Taiwan Socioeconomic Impact Study

Industry Overview

Direct selling is a growing industry in Taiwan. The industry accounts for 2.8 percent of total retail sales in Taiwan. The industry growth rates are larger than the overall growth experienced by the country from 2000 to 2003.
Sales for direct selling have increased by more than 36 percent over the past three years, from NT$38.1 billion in 2000 to NT$52.0 billion in 2003.
Direct selling provides significant economic and social contributions to Taiwanese families and to the country as a whole. The industry offers an alternative income source for Taiwanese households.
Direct selling offers a wide variety of products, ranging from food to services. The largest categories of product sales are nutritional and health products (NT$19.1 billion of sales), followed by beauty care (NT$11.8 billion) and clothes and accessories (NT$4.6 billion).

Benefits to Consumers

Direct selling serves hard to reach consumers: It increases access to retail markets in rural areas generally underserved by traditional retail channels, providing consumers with access to additional goods they might not otherwise be able to find.
Direct selling organizations gave an estimated NT$44 million to charitable causes in 2003.

Size of Industry

More than 3.8 million Taiwanese are associated with the direct selling industry. Of these, 668,000 are direct sellers. There is one direct seller for every 5.92 people in Taiwan – a much higher rate of penetration than other countries in the region.
There are currently 264 direct selling companies in Taiwan, with total revenue of NT$52 billion and including such household names as Amway, Avon, Mary Kay, and Nu Skin. Taiwan–based companies include Boching, Chlitina, Formosa Magazine Press, Hsin Ten Enterprise, Medical Designs, and Sunpack.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the Taiwanese economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development spending, and pay taxes.
An estimated 5,000 people were employed by direct selling companies in 2003, earning an estimated NT$36.6 billion in wages, salaries and other compensation from the industry.
The number of salespeople receiving commissions increased by 15 percent from 2000 to 2003, and average commission in 2003 was NT$35,500.
Three–quarters of direct sellers are women. The direct selling industry provides entrepreneurial opportunities for women that may have been previously unavailable. The industry is family–oriented; many couples work together.
Associated value: The direct contribution includes NT$52.0 billion and employment of 673,000 and NT$6.0 billion in tax revenues. In addition, indirect and induced contributions through purchases of products and services from other Taiwanese companies and employee spending support an additional 38,000 jobs, NT$40.8 billion of personal income to Taiwanese families and economy, and NT$4.5 in tax revenues.
The industry’s contributions to jobs, income, investment, and research and development results in increased tax collections for the government. Taxes generate NT$10.5 billion –– $6 billion direct, and $4.5 billion indirect.
The industry contributes considerably to Taiwan’s quality of life. Entrepreneurship, work schedule flexibility, and opportunities to develop personal business skills are a few of the major benefits.
Direct sellers are generally pleased with their experience in the industry. Over 70 percent describe themselves as either “somewhat satisfied” or “very satisfied” with their activities.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…I have successfully adjusted my mindset, and have helped other members and customers improve their appearances and thus improve their self–confidence. As a result, I can hardly describe how happy I am now.

–Comments from a direct seller

Thailand Socioeconomic Impact Study

Industry Overview

There are 506 direct selling companies in Thailand, out of which 6% are members of TDSA.
Result obtained from 180 companies interviewed, majority of the companies (83%) are well established with at least 4 year business operations.
Most of the companies (62%) have affiliations with other companies.
– 71% of the affiliated companies are headquarters.
– 29% are subsidiaries. Among the subsidiaries, half of them having their headquarters in the US., followed by another 15% with headquarters in Malaysia.
Majority of the companies (60%) operate on a multi–level marketing model where direct sellers earn their compensation based on their sales and those of their recruits.
All of the non–affiliated companies operate on a single–level marketing model where the direct sellers earn their compensation based on their sales.

Benefits to Consumers

Direct selling serves hard to reach consumers: It increases access to retail markets in rural areas generally underserved by traditional retail channels, providing consumers with access to additional goods they might not otherwise be able to find.
Direct selling organization gave an estimated 85.98 million baht to charitable causes in 2007.

Size of Industry

In 2007, there were approximately 9.5 million Thai people associated with the direct selling industry: most of these are direct sellers who received compensation (commissions, overrides or bonuses) from direct selling companies.
The retail sales of direct selling in Thailand totaled 5.17 billion bath in 2007. The largest categories of product sales are Cosmetic care products followed closely by Health products and Household products respectively.

Economic/Fiscal/Social Contributions

In terms of retails sales revenue generation, from 2006 to 2007, the retail sales revenue has grown by 12% (Thai baht 46,342 million in 2006 and Thai baht 51,776 million in 2007) despite the overall economic slowdown (2006 GDP: 5.1, 2007 GDP: 4.8).
The industry is a profitable with a solid profit margin of 20% in 2006 and 2007.
Despite the economic slowdown the industry has a healthy growth of 15% thanks to the breadth of products and services that the industry offers and consumers’ increasing concern of Health and Beauty.
– Cosmetic Products (36% of revenue in 2006, 38% of revenue in 2007) and Health products
(35% of revenue in 2006 and 39% of revenue in 2007) are the key drivers of revenue for the industry.
– Revenue generated from Health Products grows at 27% while revenue from Cosmetic Products grow at 17%.
Even though majority of the direct selling business (44% in 2006 and 43% in 2007) is still concentrated in Bangkok and Metropolitan areas, business in other parts of the country is growing faster than in Bangkok itself (Growth Rate–East: 17%, Central: 16%, North: 14%, North East:13%, South: 11%, Bangkok and Metropolitan: 10%)
The industry also contributes approximately THB 2,142 million or 4% of its revenue in the forms of various tax, primarily VAT, followed by import duties, and corporate income tax.
The industry employs over 4.9 million direct sellers in 2006 and this number went up by 48% to 9.5 million in 2007. This demonstrates that the direct selling occupation is gaining popularity.
Apart from creating jobs for the locals, the industry invests in the development of its human capital. In 2007, the industry spent 1% of its revenue (THB 330 Million) in training company employees and direct sellers.
The increasing investment in long–term assets like building and equipment (1% of revenue in 2006 and 1.5% of revenue in 2007) is a positive signal of sustainable (long–term) development.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country
From 2006 to 2007 the socio–economic contribution of the industry is on the upward trend despite the slowdown in the Thai economy. The three main factors behind this phenomena are:
– Direct selling is gaining popularity as reflected by the growth in the number of active
direct sellers.
– Even though direct selling is still concentrated in Bangkok, it is expanding to other regions of Thailand.
– Consumers are more Health and Beauty conscious.

United States Socioeconomic Impact Study

Industry Overview

In 2003, there were approximately 13.3 million direct sellers in the US.

Direct selling is a large, growing and unique industry in the United States. Sales have increased more than 15.6 percent over the past three years, from $25.6 billion in 2000 to $29.6 billion in 2003.
The direct selling industry accounts for 0.9 percent of total retail sales in the US.
Direct selling provides significant economic and social contributions to American families and to the country as a whole. The industry offers an alternative income source and schedule flexibility for US households.
Direct selling offers a wide variety of products, ranging from food to services. The largest categories of product sales are home durables ($8.7 billion of sales), followed by personal care products ($6.9 billion) and wellness products ($4.8 billion).

Benefits to Consumers

Consumers benefit from product demonstrations, trials and customized service, often not available through alternative retail channels.
Direct selling organizations gave an estimated $90 million to charitable causes in 2003. Eighty–nine percent of the direct seller respondents said they contributed to human services and charities, and 36 percent of respondents contributed to education.

Size of Industry

In 2003, there were approximately 13.3 million direct sellers.
The direct selling industry in the United States is comprised of approximately 1,500 companies, with total sales revenue of $29.6 billion in 2003. The industry includes global companies with household names, such as, Quixtar, Avon, Mary Kay, and Tupperware, many of which are US–based.

Economic/Fiscal/Social Contributions

Direct selling contributes significantly to the United States economy both financially and in terms of quality of life. Direct selling companies make capital investments, fund research and development spending, and pay taxes.
There were approximately 13.4 million Americans associated with the direct selling industry in 2003 – of these most were direct sellers that received compensation while 77,000 were permanent employees of the direct selling companies.
Direct employees earned an estimated $4.1 billion and other compensation from the industry while independent direct sellers earned over $7 billion through commissions and bonuses.
More than 61 percent of direct sellers are women: most are married with three or more people in the household. The demographics of the industry are family –oriented, and demonstrate its uniqueness in providing entrepreneurial opportunities for women that might not be available to them otherwise.
Associated value: The direct employment contribution earned an estimated $11.9 billion and $2.1 billion in tax revenues. In addition, indirect and induced contributions through purchases of products and services from other American companies and employee spending created $13.6 billion, $4.1 billion of which was generated by taxes.
The industry’s contributions to jobs, income, investment, and research and development results in increased tax collections for the government. Taxes generate $716 million –– $488 million direct, and $228 million indirect.
The industry contributes considerably to American’s quality of life. Entrepreneurship, work schedule flexibility, and opportunities to develop personal business skills are a few of the major benefits.
Direct sellers are generally pleased with their experience in the industry. Over 77 percent described themselves as either “somewhat satisfied” or “very satisfied” with direct selling activities.

Conclusion

While the economic contributions of jobs, personal income, investment, and taxes can be quantified, it is also important to recognize the social contributions that are made to individual families’ lives and well–being.
Increased self–esteem, self–confidence, organization and management skills will play a major role in building a stronger future for direct sellers, their families, their communities and their country.

…Direct selling has improved my self–confidence in every aspect of my life which makes me a better person for myself and all I come in contact with. It has made me a happier person also. I know I can do this business and make money whenever I choose.