Despite local governments’ vaccination campaigns across the world, we are still in the midst of the epidemic.
According to the IMF, the world economy would contract by 4.4% in 2020. The majority of the world’s economies are seeing growing unemployment.
One industry, though, has remained stable.
According to the World Federation of Direct Selling Associations’ (WFDSA) annual Direct Selling Report, worldwide direct sales grew by 2.3 percent year over year, from US$175.3 billion in 2019 to US$179.3 billion in 2020.
Despite the destruction wrought by Covid-19, the three-year compound annual growth rate (CAGR) is increasing, according to the research.
The direct selling industry grew at a 3.0% CAGR (excluding China) from 2017 to 2020, exhibiting resilience in a time when other commercial sectors are witnessing a negative trend due to the pandemic.
What Is Direct Selling?
It is a sales channel used by firms to advertise their products directly to the end customer, away from a physical retail store, depending largely on word-of-mouth advertising from existing users.
Direct selling is, in some respects, a development of the traveling salesman of the early 1900s. Before internet firms popularised flexible job options in recent years, the direct selling industry was the first gig economy business.
Many firms utilize the direct selling business model to market distinctive products and services in sectors including health and nutrition, personal and cosmetic care, and home care items, among others.
The Pandemic Effect
The relationship and personal touch that distributors create with their clients and team members is the cornerstone of the direct selling company. The direct selling sector took a hit in the early days of the epidemic, as the lockdown forced social distance and extended periods of seclusion.
Most businesses, on the other hand, swiftly recovered after fast adapting to the new normal with the use of digital engagement tools, virtual events, and training programs.
Many organizations were obliged to accelerate their digital deployment as a result of the epidemic. This was especially important for the direct selling sector, which has historically relied on in-person contacts.
Those that were able to make the transition swiftly and connect with and assist their consumers and distributors not only survived but flourished!
For example, in several African countries, QNET witnessed record-breaking growth of up to 65 percent.
What Is Next For The Industry?
Companies that provide health and wellness goods saw a large rise in sales as a result of the pandemic’s increased awareness and personal health concerns.
With $64.8 billion in global direct sales, these items grabbed the lead. This pattern is expected to continue in the next years.
Direct selling got more agile in 2020 as a result of changes in customer behavior. To respond to the rapidly changing global environment, the industry had to reinvent itself.
In the way people and businesses create money, innovation is all around us. Microbusiness is becoming more popular. E-commerce is on the rise.