May 25, 2014
SELDIA: The World at Two Speeds
by Maurits Bruggink
The Global 100 in this issue is an illustration of the strong growth of direct selling worldwide. So many companies are growing at a speed that nobody would have held imaginable some years ago. The annual global statistics, produced by the World Federation of Direct Selling Associations (WFDSA) with the help of Seldia, confirm the trends. Total global direct sales in 2012 were an estimated $153 billion, whereas the 2013 figures were $166 billion, and the upcoming 2014 figures will confirm the upward trend.
Nevertheless, growth seems to come at two speeds. There are emerging markets with double-digit growth over the last years, like India, Mexico, Brazil, China, Turkey and Russia, to name a few. There are also markets with slow growth or even, to use the economic euphemism, negative growth. For those who like euphemisms, these countries are also often called “mature markets.” It should be said, however, that not all is wine and roses in emerging markets, as highlighted recently.
Great was my surprise about the comments made during Seldia’s last CEO Council meeting. This CEO Council, for those who are less familiar with our European DSA, is an annual meeting at which European CEOs discuss current affairs and provide input on the association’s working program. The surprise came with the discussion on most promising markets in this part of the world. With all respect for mature markets, it came as a surprise that France was picked as the most promising performer. What happened with the emerging countries that are characterized by low GDP per capita, entrepreneurial citizens, great geographical distances, imperfect retail infrastructure and favorable business laws?
Emerging markets may present uncertain factors, which is the cause of a bumpy road for direct selling companies. The most obvious and tragic example is Ukraine, where the sad political developments are taking their toll on the sales of our sector. The difficulty of the politician and regulator to understand our business model remains also an issue, although this is sometimes even the case in mature markets. Currency fluctuations are another uncertainty, more in emerging markets than, say, the dollar or euro zones. Despite these bumps, the road in emerging markets is still leading to tremendous opportunities and growth.
In parallel to the developments in emerging markets, we see a renaissance in mature markets. These markets offer a number of unique opportunities. The laws on distribution models or consumer protection are more established. Industry has been successful in creating more support for direct selling by policymakers and the regulator, the consumer organizations and the public at large. Some countries even have gone as far as incorporating direct selling in academic education. The high level of Internet and smartphone penetration also has led to new avenues of direct selling of which we are still at the beginning.
As the Direct Selling News Global 100 list illustrates, our sector has some large and growing successful companies. Many of them operate on a global scale, in markets that are hugely different one from the other. Is it then fair that we compare sales in, say, France to that in India? The legal, commercial, economic and societal differences are so big that each market will develop in a different way.
Emerging and mature markets will grow at different speeds, but both offer great opportunities for direct selling companies. Take the U.S., the largest direct selling market in the world. It does not belong to the group of strong growing markets, but nevertheless, there is no better place to keep up to speed with the latest trends and technologies as in the annual conference of the DSA in Orlando. More than two days of workshops, presentations, exhibitors and networking will give privileged insights in June this year. Further insights on the world’s second-largest market, Europe, can be gained at the annual conference of Seldia’s European Direct Selling Conference on Oct. 2 in Brussels (www.directsellingconference.eu). After that, the whole world will meet in Rio de Janeiro in November this year for the WFDSA World Congress. Although direct selling seems to run at two speeds, we all share the same passion and have opportunities to learn from each other. I look forward to meeting you in Orlando, Brussels and Rio.
Maurits Bruggink is the Executive Director of Seldia, the European Direct Selling Association. Read more about Seldia at www.seldia.eu.