Direct-to-consumer (D2C) models have found limited success in the region in the past, given the logistics and legislative challenges. One such challenge had been the difficulty of hiring part-time direct selling representatives, since the United Arab Emirates has strict employment laws that state that one may only work for companies under their work permit.
Consumers are increasingly looking to digital channels to facilitate their non-store retailing experiences. This is especially true in categories such as food and drink and media products, each of which have continued to record impressive current value growth in e-commerce, therefore threatening sales of these products via direct selling.
In line with global trends, Avon maintains its sales representatives, but is also considering expanding via smaller boutiques, online, and even perhaps in department stores. One interesting development for Avon in 2021 was that its products could be found on the online marketplace Noon.
Direct selling is expected to continue to account for a marginal share in the overall retail landscape in the United Arab Emirates, since the category suffers from stigma for its misunderstanding as a pyramid scheme. However, as economic uncertainty grows and inflation drives up the cost of living, it is expected that part-time income seekers will engage in direct selling activities to supplement their income.
New products related to personal hygiene, such as Forever Living’s aloe liquid soap, may help maintain growth in direct selling over the forecast period, as more consumers in the United Arab Emirates are becoming hypervigilant about cleanliness. Furthermore, innovations in terms of supplements and immunity boosters are also expected to areas for growth over the forecast period.
Legal obstacles have been a headwind to the growth of the channel, since there has been some confusion about the legal status of working part-time as a direct seller in the country, with its strict employment laws stipulating that any employment needs to have a specific work visa. However, in 2021 there was a major change in this law, which should help with recruitment.
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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: On a one-to-one basis (usually by prior arrangement a demonstration is given by a direct seller to a customer) or on a 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). Avon stands as a prime example of a direct seller using one-to-one selling, whereas Tupperware is famous for its party-plan method. Direct selling of services - such as insurance, telecoms, other utilities, and 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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