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Direct Selling News – “Billion Dollar Markets”

Aug 27, 2020


The world is certainly a different place right now, with COVID-19 having major impacts on every area of life. But there is some positive news, especially for the Asia-Pacific region, and the fact that one expert’s opinion is that direct selling might prove to be “recession resistant”.

In the August edition of Direct Selling News, the article, "Billion Dollar Markets" (link below) is a great read and one which is highly recommended for everyone to look at. The author, Beth Douglass Silcox (p.39), focuses on 2019 and the impacts on direct selling after unsubstantiated health claims made by one company in China triggered a 100-day investigation which ceased sales for most in our industry. This called into question the integrity of the whole wellness industry, and prevented China from overtaking the USA in 2019, defying predictions that it would become the #1 sales country in the world. It was reported that it also triggered 27 per cent of Chinese independent distributors to leave the industry.

The magazine article cites research done by the World Federation of Direct Selling Associations, Seldia (The European Direct Selling Association), local direct selling associations and their member companies, which depicts the overall state of the global direct selling industry for 2019. The research shows that the top 10 markets in the world generate 78 per cent of global sales, and that half of these top 10 markets are within the Asia-Pacific region, they being China, Korea, Japan, Malaysia and Taiwan. The greatest growths within the top 10 markets from the APAC Region were India (16.3%), Indonesia (12.8%) and Malaysia (11.6%).

The great news in this part of the world is that the Asia-Pacific Region is the #1 Region with 2019 sales of $78.9B, which is more than double that of the second largest sales Region of North America at $37.7B. The other good news is that, even despite the setback and the difficulty of the wellness industry working to reinstate its integrity and therefore sales, wellness products were the best-selling products in our Region at 51% in 2019 (up 10% from 2018), with cosmetics next at 23%, followed by household items at 11%.

Another interesting fact is that there are ten billion-dollar markets in the Asia-Pacific Region, which generated 44% of all global sales in 2019. China is at the top of these – although declined by 30% because of the investigation – followed by Korea with a rise of 3.8%; then Japan; Malaysia; Taiwan, China; Thailand; India; Indonesia; Phillippines; and Australia at #21 in the world with a drop of 5.2%.

The wellness industry was only just recovering from the setback in China when COVID-19 hit. Obviously, this massive event worldwide will affect numbers going forward in the 2020 year results, but so far, according to the article, “more than half indicate a positive impact to their company revenue in the US as a result of coronavirus.” This is because people are spending their money in various stages of lockdown and in an era of social distancing on wellness products.

The article cites a quote by Ben Gamse, USDSA Senior Market Research Manager, who said, “There’s evidence that direct selling is recession resistant and resilient to external economic shocks.” That’s not to say that the industry is immune to the effects of recession but that it gives good value for money at a time when consumer behaviour has changed greatly.

No-one can really predict what the long-term effects of the global pandemic will have on direct selling and in particular the wellness industry, but there are many reasons to be optimistic that companies such as Jeunesse are well placed, both for their customers and their hard-working distributors.

 

Reference: August edition of Direct Selling News https://issuu.com/directsellingnews/docs/dsn_august_2020 

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