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  • North America
  • Europe
  • South America
  • Asia Pacific

Direct Selling

Traditionally we distinguish three distribution channels within the Consumer Goods industry: Retail, E-Commerce and Direct Selling. Direct Selling is the oldest of the three and its fast development from the latter part of the 20th century has transformed the channel into a very specific industry that obeys its own rules, language, ethics and regulations.

The Direct Selling industry is worth 183 Billion USD and is represented by more than 100 million people across the world as of 2014.

The definition of Direct Selling from the World Federation of Direct Selling Associations (WFDSA) in their annual report 2014 is the most accurate definition of the channel:

“Direct selling is the sale of a product or service based on an explanation or demonstration to the consumer by independent sales representatives who are sometimes also referred to as direct sellers, consultants, distributors or other titles. Direct sales often occur in a one-to-one or small group or party plan environment, typically in the consumer’s home or place of work. Direct sales also may take place in a branded shop or retail location, online via e-commerce or social media, or by subscription/ automatic delivery”

The Asia Pacific region (APAC) is composed of advanced countries such as Japan, Korea, and Australia and is expected to continue to grow at a rapid rate with the development of emerging markets such as Indonesia, Malaysia, and Philippines.

With a population of 4.3 billion people, Asia Pacific is the biggest region for the Direct Selling industry in terms of revenue and number of distributors. More than 50 million people, which is half of the distributors in the world in 2014, are from the APAC region (this number would be much higher if the number of distributors were available for China). In terms of revenue, in 2014, this region represented approx. 45% of the global industry revenue (81.5B USD) and this ratio has been consistently growing (+3 points vs 2011).

China is expected to become the #1 market in the world (currently #2 at 30B USD) within the next few years and is already #1 in terms of number of distributors.
India, with a large and young population, is also a market that will certainly continue to experience solid growth in the future.

In terms of products categories, within the greater China Region (Mainland China, Hong Kong, Taiwan), India and South East Asia, the Wellness category accounts for approximately half of the channel’s revenue. The Cosmetics and Skin Care category is the second largest category in APAC accounting for 25% of the total revenue, followed by household goods and durables (17%).

Sources: ASENSHIA, World Bank, WFDSA, Euromonitor, Wikipedia

Similar to Europe, the region can be split into 2 main sub regions of developed and emergent countries, on one hand we have the United States (#1 Direct Selling market) and Canada and on the other we have Mexico, Central, and South American Countries. The United States is the world’s biggest market in terms or revenue (34.4B USD) and as the home country of the industry, this is also where most new industry concepts and creative ideas are coming from.With a total population of almost 1 billion people the Americas is the second largest region in the world for Direct Selling in 2014 and represents one third of the world’s distributors and industry revenue (67.4B USD).

The central and South American markets equal the market size of Europe: 17% of global industry revenue and 15% of the global number of distributors. Brazil, Mexico, and Colombia are the biggest markets within the zone.

In North America, Multi-level marketing is the primary compensation structure while Single-level marketing is dominant in Central and Latin America.

Sources: ASENSHIA, World Bank, WFDSA, Euromonitor, Wikipedia

Similar to Europe, the region can be split into 2 main sub regions of developed and emergent countries, on one hand we have the United States (#1 Direct Selling market) and Canada and on the other we have Mexico, Central, and South American Countries. The United States is the world’s biggest market in terms or revenue (34.4B USD) and as the home country of the industry, this is also where most new industry concepts and creative ideas are coming from.With a total population of almost 1 billion people the Americas is the second largest region in the world for Direct Selling in 2014 and represents one third of the world’s distributors and industry revenue (67.4B USD).

The central and South American markets equal the market size of Europe: 17% of global industry revenue and 15% of the global number of distributors. Brazil, Mexico, and Colombia are the biggest markets within the zone.

In North America, Multi-level marketing is the primary compensation structure while Single-level marketing is dominant in Central and Latin America.

Sources: ASENSHIA, World Bank, WFDSA, Euromonitor, Wikipedia

West Europe, composed of 17 advanced economies such as United Kingdom, France, Italy, and Germany has registered a solid growth (CAGR of 3.4%) and the number of distributors (14 million) has been growing rapidly over the last few years. In 2014, Europe represented 17% (32.6B USD) of the industry revenue and 15% of the number of distributors globally, a sum equal in size to the Latin and Central America region.We can explain the development of the Western European market by looking at several factors such as the arrival of numerous U.S. based Direct Selling companies over the last few years providing exciting opportunities to people. Complicated economic conditions (unemployment) within the region has also propelled more people to supplement their income. Finally, the efforts of the European Direct Selling Associations (Local DSAs, DSE & SELDIA) to promote the image of the industry and encourage entrepreneurial spirit among the populations has positively impacted the industry.

In terms of product categories, the repartition between the 2 European sub regions is unequal: Cosmetics and Skin Care category represents 60% of the channel revenue in East Europe while in the West, Wellness (26%) is the largest category followed by Cosmetics and Skin Care (24%) and Home Improvement (13%).

West Europe represents approximately 75% of the European revenue and has the highest revenue by distributor ratio on average (approx. 7,000 USD/distributor in 2014) among all regions. The Direct Selling industry has been able to offer an opportunity to more than 10 million people in Central and East Europe (13 Countries + Russia). Russia, Turkey and Poland are the billion Dollar markets within the zone.

Sources: ASENSHIA, World Bank, WFDSA, Euromonitor, Wikipedia
CAGR: Compound Annual Growth Rate expressed in Constant USD 2014, between 2011 and 2014

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