The rate of decline in the retail current value sales of direct selling accelerated during 2021, as measures implemented to limit the spread of COVID-19 undermined consumer confidence and spending power and led to a focus on essential items. In addition, concerns about exposure to COVID-19 deterred consumers from engaging in face-to-face contact, leading them to turn to purchasing products via alternative channels, such as homeshopping and e-commerce.
Amway (Thailand) Ltd remained the leading player in direct selling during 2020. While some of its competitors have struggled in the face of mounting competition from e-commerce, Amway has adapted by investing in its digital services and providing tools to its sellers to enable them to create personalised online interactions.
Working to adapt quickly to dramatic and unforeseen changes to market conditions resulting from the COVID-19 crisis, direct selling companies, such as Amway and Herbalife, invested in the development of their e-commerce operations, offering special online promotions such as free delivery without a minimum order. Third-placed Mistine is a notable example of a direct selling brand that focused on online development, going from a purely offline operator to online accounting for 20% of its activity.
Direct selling retail current value sales will begin to stabilise in 2022 but will not begin to expand again until 2023. Even at the end of the forecast period, they will remain below their pre-pandemic peak.
In the context of a rapidly evolving retailing environment and shifting consumer concerns, direct selling companies are expected to work to develop product offers that resonate more strongly with prevailing demand. Mistine is already moving in this direction, expanding the range of personal care products, such as hand sanitisers, hand cream and dental care products, in its portfolio.
The increased unemployment rate in Thailand, driven in part by a marked fall in inbound tourism, is likely to encourage more people to join the salesforces of direct selling companies in an effort to generate income – at least during the early part of the forecast period. This will intensify competition in the channel and boost sales.
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Direct selling is the marketing of consumer goods directly to consumers, generally in their homes or the homes of others, at their workplace and other places away from permanent retail locations. Direct selling occurs in two primary ways: -one-to-one basis (usually by prior arrangement a demonstration is given by a direct seller to a customer) or -party-plan basis (selling through explanation and demonstration of products to a group of prospective customers by a direct seller usually in the home of a host(ess) who invites other persons for this purpose). The prime example of a one-to-one method is Avon. Tupperware is famous for its party-plan method. Direct selling of services - such as insurance, telecoms, other utilities, financial services - are excluded.See All of Our Definitions
This report originates from Passport, our Direct Selling research and analysis database.
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