Direct Selling in France

2021 DEVELOPMENTS

2021 epitomises the beginning of revival for direct selling

Given that human contact is the very essence of this channel, sales obviously collapsed during the first few weeks of the pandemic in 2020. The channel lost 70% of its sales in March and April 2020 according to the main direct selling trade association in France.

After initial period of resilience, the channel rebounds through its acceleration in products for the home and for wellbeing

From 2020, a growing proportion of sales in direct selling were organised via social networks and with the use of digital tools with this continuing into 2021. Network selling benefited from the general shift towards online marketing while many sales agents and customers were recruited online.

Vorwerk and Herbalife each enjoy two years of double-digit growth in 2020 and 2021 in France

The ongoing appeal among French consumers for products for the home and for wellbeing is exemplified by the astonishing progression of Vorwek and Herbalife. Vorwerk was already a dynamic direct seller before 2020 but managed to forge ahead by training its direct sales force of around 7,000 advisers in France in web tools.

PROSPECTS AND OPPORTUNITIES

Expected metamorphosis of direct selling with the channel ultimately seeing a return to normal

In the middle of 2020, direct selling players did not expect the channel to return to pre-COVID-19 sales levels before 2023 at the earliest. Their reaction against the consequences of the pandemic was so efficient that, at the end of 2021, their predicted scenario of a return to pre-COVID-19 sales levels is 2022.

The post-pandemic years provide a new reservoir for the recruitment of salespeople

Similar to difficult financial times, such as the financial crisis faced in the years prior to the review period in 2008-2009, the expansion of the networks of sales agents of the leading names in direct selling is expected to accelerate. Direct selling is often seen as an ideal source of extra revenue by people facing financial hardship which means direct selling is likely to be able to ride out the post-COVID-19 period in a better condition than some other retail channels.

Strong difficulties for specialists in home improvement and safety

Difficulties will persist for direct selling agents who encounter scheduling face-to-face meetings in the homes of their customers, not only due to the probable lessening of the aftermath of the COVID-19 restrictions but also due to the aforementioned switch of direct selling towards a neo-e-commerce business model. The diminished consumer confidence and the massive adoption of e-commerce by previously reluctant consumers (notably seniors) could further limit their ability and willingness to invite direct selling agents into their homes and/or attend in-person sales meetings.