Top 10 ranking eyed for growing direct-sales sector

Under the association’s ambitious plans, sales would reach US$4 billion, up from the US$2.6 billion posted last year.
On the path to this goal, the TDSA is targeting growth of 5 per cent for Thailand’s direct-selling industry next year, citing factors such as the rapid adaptation of direct-selling companies to the emerging digital era, association president Suchada Theeravachirakul said.
She said that in the digital era, individual consumers had set up their own communities based on their shared interests.
“Direct selling is a community-oriented business and is able to grow naturally as driven by people’s community-led lifestyles," said Suchada, adding that firms in the sector now offer many diversified products in their portfolio.
 There are increasing numbers of entrepreneurs who want to own their own business and direct-selling is one of the most effective retail channels to bring business entrepreneurs closer to their customers, Suchada said.
However, the industry faces challenges with the pattern of a slower-growth economy and a decline in consumer spending power on specific products, as well as stiffer competition in the skincare and broader cosmetic goods segment.
Suchada said that in 2016, global sales in the direct-sales sector reached US$182.6 billion, with a three-year compound annual growth rate (CAGR) of 5.2 per cent (from 2013), and the number of direct sellers topped 107 million, up 3.1 per cent from the previous year.
Last year, the Asia-Pacific accounted for 46 per cent of global direct sales, with CAGR of 6.7 per cent. The Americas followed with 33 per cent of global sales, with CAGR of 3.3 per cent; Europe took 20 per cent of sales, with CAGR of 4.9 per cent; and Africa and Middle East accounting for about 1 per cent of sales, CAGR of 6 per cent.
The top 10 direct-sales markets last year comprised the US, with US$35.5 billion in sales; China with US$33.8 billion; South Korea US$16.8 billion; Germany US$15.8 billion; Japan US$15.3 billion; Brazil US$8.6 billion; Mexico US$5.8 billion; Malaysia US$4.8 billion; France US$4.5 billion; and the United Kingdom US$3.8 billion. Thailand was in 13th place, with sales of US$2.6 billion, or Bt93.3 billion.
In Asean, Thailand is ranked as the second-best direct-selling market after Malaysia. Direct retail sales have also seen impressive gains in the Philippines, Indonesia, Vietnam and Singapore. These markets are also members of the World Federation of Direct Selling Associations (WFDSA).
“Recently, we gathered at Asean’s DSA to strengthen cooperation among Asean DSAs, to share best practices and market intelligence on new developments and trends impacting our business in the region. In addition, the gathering also aimed to provide an understanding on direct selling and pyramid schemes,” Suchada said.
“We project a growth rate for the direct-selling industry in Thailand of 2 per cent this year, compared with last year, with the total sales value to reach Bt95 billion.
“There are more than 11 million direct sales representatives in Thailand at the moment. Direct selling is an option for a career and self-employment opportunities for those who want to earn extra income for a better quality of life as well as to reach their full potential.”
She said that Thailand's overall direct-selling industry grew 3 per cent in 2015 and 1 per cent last year.
The TDSA said yesterday that the 16th WFDSA 2020 World Congress will be held in Bangkok in the last quarter of 2020. It will be the first time that Thailand hosts the event; it will be organised by the Thai Direct Selling Association. It is expected to draw about 1,000 attendees from the WFDSA's 60 national direct selling associations and member companies. The event will provide a showcase of Thai expertise in direct selling, the association said.
Suchada said the congress is held every three years, with Paris hosting the October 2017 event.
“At the world congress, Thailand was selected to host the up-coming world congress by a majority vote of the board of directors,” she said. “It shows our strength and the potential of the direct selling industry and our commitment to the global business standard for direct sales.”
The 2020 congress will bring together direct selling executives, stakeholders, government officials, consumer leaders and academics. More than 1,000 people from around the world will discuss issues of importance to direct selling. The world congress will generate a cash flow of around Bt100 million for Thailand, Suchada said.