July 27, 2017
Direct Selling Is Booming in South Africa
The Direct Selling Association of South Africa (DSASA) recently announced its industry results at a gathering of the Association’s 34 direct sales business entities in Johannesburg.
An estimated 1.3 million independent business owners have generated R12.9 billion (South African Rand) or $999.4 million USD for the national economy in the form of sales directly to customers. These entities cover sectors such as health, beauty, homeware, financial and investment products, nutritional supplements and weight-loss management.
In an economy that has mounting living costs and scarce jobs opportunities and is facing a third possible downgrade, the direct selling industry is one of the few sectors showing growth over the past 18 months. In addition to being an important contributor to the economy, direct selling is also an important skills development and employment provider, at a time when jobs are scarce and disposable income is declining.
“The direct selling business model is aimed at providing opportunities for all South Africans, regardless of their financial or educational standing, to earn a full-time living or extra income part-time,” said Ernest Du Toit, Chairperson of the DSASA. “Direct sales adds value to lives, giving people the opportunity to achieve financial independence, without the limitations of being office bound. This is a very attractive proposition, especially in today’s modern society where single-parent families struggle to balance their home and working lives.”
During 2016 the number of direct selling business owners had grown by over 122,000 over the previous year—an increase of 35 percent.
“We have also seen a rise in the number of rural direct sellers,” said Du Toit. “This is encouraging as not only are we able to provide job opportunities to those most in need, but we are also able to supply consumable, financial and lifestyle products to areas without access to modern conveniences such as shopping malls or financial brokers.”
Gauteng, the northern province of South Africa that includes Praetoria and Johannesburg, had 35 percent of the total sales, followed by Kwa-Zulu Natal, a coastal province known as a safari destination, had 17 percent, and Limpopo, home to Kruger National Park, had 8 percent.
“Direct selling has a much greater reach than retail outlets have,” said Du Toit. “Retail outlets have a fixed footprint in specific geographic locations, whereas direct selling can reach as far as any individual can travel or have their product delivered. It offers far better penetration into the distant rural markets, but without the costs evident in the more urban markets.”
A very positive development is that the industry, as a whole, reflects the population profile of South Africa. The 2016 statistics demonstrate that 86 percent were from the black community, 11 percent were white, 2 percent were Indian and Asian, and 1 percent was colored. Of all the independent business owners, 72 percent are women from the black community. In 2016, 33 percent of active business owners were operating in a full-time capacity and 67 percent were working part-time.
The DSA of South Africa is a self-regulating, corporate membership organization. As a condition of acceptance and continuing membership, all DSA member companies pledge to adhere to an industry Code of Conduct, and compliance with all legislation is also essential. A very small upfront investment is required of new entrants to whom comprehensive training is provided.