Kochi, Jul 10: The Indian Direct Selling Association (IDSA) today alleged that unscrupulous players were giving the Direct Selling industry a bad name and stressed the need for the government to enact a law setting the benchmarks for the sector.
Addressing a press conference here, IDSA Chairman and CEO, AMC Cookware, David Stanley said the emergence of fraudulent companies was the biggest danger facing the Direct Selling industry.
Stating that the existing penal provisions were not enough to catch the culprits, he said there was a need to enact a separate law to regulate the sector.
All major countries having Direct Selling activities had special laws to regulate such companies, IDSA Vice-President and CEO, Modicare, Hemant Singh, said.
Mr Stanley said the Direct Selling industry was growing at about ten per cent in India. It had a turnover of more than Rs 2,500 crore during 2006-07. An additional Rs 1,500 crore was contributed from the sale of insurance products. The southern region accounted for about 30 to 35 per cent of the total turnover.
Stating that the sector had the potential to grow at 30 to 40 per cent, Mr Stanley said government recognition of the sector would instil confidence among the distributors and also attract more MNCs to India.
Denying that Direct Selling companies were evading taxes, Mr Hemant Singh said the sector had contributed Rs 120 crore in direct taxes and Rs 170 crore in indirect taxes during 2006-07.
Amway India Enterprises CEO Bill Pinckney denied that products marketed by Direct Selling companies were overpriced and said the ''moneyback guarantee'' was the unique selling proposition (USP) of Direct Selling companies.
There were at present more than 1.5 million direct sellers in India, 65 per cent of them women.
Nearly 400 products with over 3,000 variants, were being marketed through Direct Selling. These mainly covered cosmetics, health and nutrition, kitchenware and cookware, home care, education, Ayurvedic products and fabrics.
The Indian Direct Selling Association, which was affiliated to the World Federation of Direct Selling Association, comprised 16 of the largest Direct Selling companies in the country including Altos Enterprises, Avon Beauty Products, Hindustan Lever Network, Max New York Life, Oriflame India, Quantum International, Shriram DTH and Tupperware.