March 07, 2012
Direct Selling Boom in Peru
Direct selling is alive and doing well in Peru. The industry, which is the largest category within non-store retailing in the country, has allowed hundreds of thousands of Peruvians to create their own business opportunities, and also helped to reduce poverty. And, according to industry leaders, the future looks bright.
Direct selling started in Peru in the 1960s. When the country’s military government imposed severe restrictions on imports in order to promote and protect local production, one company—Yanbal (currently known as Unique, a manufacturer of cosmetic products)—adopted direct selling as its marketing model, providing women with an opportunity for economic and professional growth that did not then exist. In the following years, Avon, Natura and Belcorp entered the market.
Direct selling grew slowly over the next 40 years. In 2001, an initiative by Avon led to the creation of CAPEVEDI (Camara Peruana de Venta Directa), the Peruvian Chamber of Direct Selling (www.capevedi.com). With the participation of Unique, Belcorp and Natura, CAPEVEDI helped promote the spirit of cooperation between direct selling companies as well as represent the interests of its members to public and private institutions for the development, consolidation and prestige of the business model.
In the following years, direct selling grew quickly. The period between 2004 and 2009 showed the strongest growth—an average rate of 24 percent per year—generating important sources of incomes for more than 350,000 independent entrepreneurs, more than 90 percent of whom were women.
In 2011, the growth of direct selling continued to expand, not only in the capital city of Lima, but also in the provinces, which represent 47 percent of the independent entrepreneurs. Top selling products last year were cosmetics with 25 percent and nutritional products with 18 percent of market participation in direct selling. Within the cosmetics category, direct selling had 57 percent of the market versus 43 percent in retail.
Source: Peruvian Chamber of Direct Selling – CAPEVEDI
Last year was also a good year for CAPEVEDI itself. The Chamber was awarded the “Silver” level by the World Federation of Direct Selling Associations (WFDSA) for its work in incorporating 90 percent of the direct selling sector as associate members. Those companies include Avon, Unique, Natura, Belcorp, Dyclass, Dupree, Herbalife, Oriflame, 4Life, Tahitian Noni, Leonisa, Rena Ware, SwissJust, Tiens and Forever Living Products.
Although the direct sales market has a strong punch in Latin America in general, the 2011 results in Peru were very positive, and the future looks favorable in light of the economic growth currently taking place in the country. According to CAPEVEDI, in 2021 the per capita income is estimated to be around US$12,000, growing 42 percent compared to 2011. The Chamber expects direct selling to continue to grow, thus generating more income to Peruvians and contributing to help reduce poverty in the country.