Despite the growth of e-commerce, direct selling still has healthy growth prospects, according to a new strategy briefing from global market research company Euromonitor International.
Direct Selling and Communities in the Internet Age says the global direct-selling market will have 11.5 per cent growth by 2021, driven by developing regions.
Its data suggests the highest compound annual growth rate (CAGR) of direct sellers for the next five years will come from Africa and the Middle East (7 per cent), Asia Pacific (3 per cent) and Latin America (2.5 per cent).
“There is positive correlation between an underdeveloped retail market and the size and growth of direct selling within that region,” says Euromonitor senior retailing analyst Tim Barret. “Direct selling is not only a source of income for some individuals in these communities, but a source of everyday products for others.”
However, says the briefing, direct sellers need to adapt to the internet revolution as many younger generations are more interested in online shopping and are sceptical of older brands and institutions.
While a personal sales model will remain the direct sellers’ core strength, maintaining and growing an online presence, both in emerging and developing regions, will become increasingly important.
“Business has the power to change lives, and direct selling more often than not seeks to exploit this potential through its network-centric business model,” says Barret. “Improving lives and supporting friends and family will never go out of fashion. However, the way communities are organising themselves is changing, and while the internet will not be a harbinger of doom to direct sellers, it will become a key differentiator.”