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India needs to have specific guidelines and a regulatory framework for the direct selling industry, said a recent report by Indicus Analytics.
The leading economics research firm in its latest study Direct Selling in India: appropriate regulation is the key has raised a number of crucial issues faced by the industry that has players such as Amway, Oriflame, Tupperware and Avon, among others. However, there are certain players, which have allegedly duped several people through fraudulent ways such as ‘ponzi’ schemes.
The report demands an operational clarification and clear distinction at the central level and urges amendment of the prize, chits and money circulation schemes (Banning) Act.
It said that the industry including multi-level marketing should be defined properly and there needs to be an explicit qualification explaining that direct selling is not to be interpreted as a money circulation scheme.
Further, the pyramid scheme has to be defined, so that people know what is being prohibited.
“This will protect direct selling companies, protect consumers and facilitate enforcement,” said economist Bibek Debroy in the report and added that fast growing economies such as Thailand, Malaysia, Korea, Indonesia, China, Vietnam, Japan, Taiwan and Singapore have proper guidelines.
Direct selling today accounts for 35.8 per cent of non-store retail sales, 4.41 per cent of organised retail sales and 0.07 per cent of the GDP.
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