South India is the largest contributor to the revenues of the direct selling industry of India, according to the annual survey of Indian Direct Selling Association and Ernst & Young. The region has been the top performing area for 58 per cent of the respondent companies. The report says that the industry stands at Rs 33,300 million and is expected to grow by 17 per cent in 2008-09. The industry is expected to reach Rs 5,320 crore by 2012-13.

Fredrik Widell, managing director, Oriflame India said: “The products that are sold by the direct selling industry are less sensitive to recession. Direct selling companies have been active in contributing to the social and economic development of the country, with over Rs. 3,700 million paid as taxes to the government exchequer by IDSA member companies alone.”

Health has emerged as the top product category in the direct selling category contributing 32 per cent to overall revenues, according to the study. Comparing India with developing countries such as Malaysia, Thailand and Indonesia, indicates that while India has a significant number of consultants involved in direct selling, the revenue generated out of the network is still low ranking, 11th in terms of sales consultants and 23rd in terms of productivity per employee.

Pinakiranjan Mishra, partner and industry leader, retail and consumer product practice, Ernst & Young said, “An increased focus on new and emerging product categories, growth in depth and breath of distribution along with improved productivity of the sales consultant network will help to boost the growth of this industry.” He also said that the consumer durables is a sector with potential to explore direct selling as a mode for distribution. Besides, fast moving consumer durable companies like HUL have employed women in the rural areas to sell their products from door to door, he said.