Indian Direct Selling Association (IDSA) plans to partner with three state governments to help consumers differentiate between a direct selling entity and a Ponzi scheme.
IDSA will meet with Maharashtra, Tamil Nadu and Himachal Pradesh in order to come up with consumer awareness programs under the Vivek Katoch platform as people still face hurdles in making the differentiation.
“This has been a big challenge for the direct selling industry in India,” said Vivek Katoch, chairman of IDSA. “The government has finally started realizing the real potential of the industry. The notification of direct selling model guidelines in 2016 and passing of Consumer Protection Act 2019 have clearly distinguished between a direct selling entity and a Ponzi scheme.”
The direct selling sector is also dealing with the problem of unauthorized selling of its products on e-commerce platforms.
Talking about the recent tussle between e-commerce platforms and direct selling companies, Katoch said IDSA has sought government support, and the ministry of consumer affairs is working on a policy framework to regulate the e-commerce platforms.
In August this year, Amazon Seller Services has moved the Supreme Court against Amway, Oriflame and Modicare, challenging a Delhi High Court judgment barring e-commerce platform from selling products of direct selling companies without their authorization.
In response to the public notice calling for suggestions and comments on the draft e-commerce policy, IDSA has recently submitted views of the direct selling industry. “IDSA is of the firm opinion that any industry or sector needs certain guidelines so that interests of the parties associated indirectly or directly with it are unharmed,” said Katoch.
According to Katoch, the direct selling industry in India is growing at a good pace and has the potential to employ youth, especially women. “The industry grew around 13 percent in 2018-19 with sales totaling around Rs 13,000 crore,” he said.