Direct Selling Sales to Grow Up 10-15pct from 2020’s Expected RM20bil
New Straits Times Interview with Datuk Tan Chong Guan, President of DSAM
Malaysia’s Direct Selling industry sales are forecast to grow between 10 and 15 per cent this year from the estimated RM20 billion last year, despit the emergence of the third wave of the Covid-19 pandemic.
Direct Selling Association of Malaysia (DSAM) president Datuk Tan Chong Guan said the pandemic had presented a silver lining for the sector as consumers were more aware of the importance of health products that would boost their immunity against the virus.
” People realise the importance of (maintaining) good health. Thus, we see an increasing number of consumers buying health supplements via direct selling.” he told the News Strait Times recently.
Tan said direct selling provided an alternative income stream for people affected by retrenchments of pay cuts due to the pandemic. The sector’s growth would be underpinned by the prospect of having an extra stream of income, online sales and e-commerce platforms, making direct selling activities accessible.
According to the DSAM’s 2020 statistics, sales of wellness accounted for 47 per cent, skin and personal care product (19 per cent), household goods and durables (16 per cent), food and beverage (eight per cent), clothing and accessories (five per cent), home care ( two per cent), books and toys (two per cent) and home improvement (one per cent).
Direct selling, DSAM said, had begun to become a significant distribution channel within the country’s total retail enterprise system.
“Online presence also increases our reach between distributors and customers.”
Although direct-selling faces stiff competition with the emergence of online sales and e-commerce platform, Tan said all products sold via direct-selling were legitimately protected by the Direct Sales and Anti-Pyramid Scheme Act 1993.
Tan said consumers would still need a personal touch (trust-building for products) before purchasing products although direct-selling faces disruption stemmed from online sales.
“Online platform is not a threat to direct-selling but rather the technology itself is an important element for us (direct-selling companies) have to embrace. We have to work with e-commerce platform to reach out to new customers and existing consumers.”
He believes that the direct selling industry was not a sunset industry as it would continue to survive backed by human touch in selling the products.
“Human touch comprises marketing plan, demonstration and incentive). Direct-selling remains relevant but we need to evolve and embrace the technology to ensure the survival of the industry,” he said.
Tan said digitisation was an important element for the industry to grow with continued efforts and investment to strengthen its online presence, especially via social media.
“Currently, many people are forced to go online as the reach increased tremendously in terms of sales. Hopefully, with less restriction and smoother delivery and imports, will spur higher growth.”
The direct selling industry posted RM17.8 billion in revenue in 2019 with professionals and industry leaders gathered to share their experiences on the use of online tools for direct selling.
In 2019, DSAM ranked seventh globally in sales and fourth in the Asia Pacific by the World Federation of Direct Selling Associations.
2021 Sales Outlook, New Straits Times
Ayisy Yusof, 12 April 2021 [Source]
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