The International Monetary Fund, IMF, estimates that the global economy shrunk by 4.4% in 2020. Most world economies are struggling with rising unemployment, all with the exception of one industry, The Direct Selling industry. Globally, we are not out of the woods yet, but your personal finances could be.

The latest Direct Selling Report, published by the World Federation of Direct Selling Associations (WFDSA), shows global direct sales increased by 2.3% year on year, from US$175.3 billion in 2019 to US$179.3 billion in 2020.

The International Monetary Fund recently raised its projection for economic growth in 2021 to 6%, up from 5.5%, and projects 4.4% growth in 2022. The upgraded outlook is based on how well the pandemic continues to be controlled, the efficacy of fiscal policy in mitigating economic damage, and global financial conditions. But with all these projections, QNET experienced a record-breaking growth of up to 65% in some African markets. The increased demand for online shopping, and the transition to digital, played to the company’s strengths: high-quality personal relationships and a high-performing e-commerce platform.

QNET’s European business won a Digital Business award for its swift implementation of digital solutions to support the network of distributors. These included online business presentations to social media workshops, to training in virtual communication tools, among others.

The report shows that the 3-year Compound Annual Growth Rate (CAGR) is rising despite the devastation caused by Covid-19. From 2017 through 2020, the Direct Selling industry saw a CAGR of 3.0% (excluding China), demonstrating resilience where most commercial sectors are experiencing a downward trend due to the pandemic.

Understanding Direct Selling better

It is a sales channel used by companies to promote their products away from a physical retail location, directly to the end consumer, primarily relying on word-of-mouth promotion from existing users. In some ways, Direct Selling is an evolution of traveling salesmen from the early 1900s.
The direct selling business was the original gig economy before tech companies made this form of flexible employment opportunities popular in recent years. Many companies worldwide use the direct selling business model to promote unique products and services in categories such as wellness and nutrition, personal and beauty care, home care products, etc.

For many people, direct Selling offers them a great platform to become micro-entrepreneurs and build a sales business promoting such products when they sign up as distributors of direct selling companies. The direct selling industry’s continued growth is not surprising. Historically, this industry has always experienced growth during economic recessions.

During difficult economic times, people have a renewed awareness of the need to establish more income streams. For those looking to start a business, Direct Selling offers an attractive opportunity to create one that does not require a lot of capital or the need to deal with operational and logistics hassles.

Africa and Asia: Two markets pushing the Direct Selling growth

Africa has been projected to be the new frontier of Direct Selling. The region has one of the highest 3-year CAGR at 6%. The World Bank’s economic analysis highlights how African countries were quick to recover from the Covid-19 crisis. Locals are adopting digital technologies exponentially, boosting productivity and employment opportunities as e-commerce opens up new prospects for businesses. The road to strengthening Africa’s economy will lie in remote work and gig opportunities. How well digitization is integrated into the current economy, allowing companies to leverage their digital commerce infrastructure and local know-how to provide new gainful income opportunities, will be vital to this process.

The attractiveness of Direct Selling is in the numbers: in 2020, the WFDSA report saw a 17.3% year-on-year increase in the number of individuals involved in this industry in Africa, bringing the total to 6.3 million distributors.

Asia is the most significant contributor in global sales for 2020 at a whopping US$76.5 billion, constituting 43% of overall sales.

Direct Selling: the future of regular and gainful income?

The increasing demand in the market for flexible work opportunities is not exclusive to Africa. Globally, people are actively exploring alternate sources of income as traditional forms of employment and entrepreneurship continue to be challenged, causing a rise in unemployment rates.

The International Labour Organisation (ILO) reported the loss of 114 million jobs in 2020 caused by workplace closures in countries with Covid-19 related restrictions. This is especially true for young people and women. As the numbers indicate, Direct Selling is a viable opportunity to build economic stability due to its low entry barrier.

What is next for the industry and the need for you to join!

Companies with health and wellness products experienced a significant boost in sales thanks to increased awareness and personal health concerns brought on by the pandemic. These products took the lead in global direct sales at US$64.8 billion. This trend will likely persist in the following years.

Innovation is all around us in the way people and companies generate revenue. Micro-entrepreneurship is on the rise. E-commerce is booming. As long as Direct Selling companies have adapted to the change and accepted the paradigm shifts that will shape the future, there has never been a better time to join Direct Selling than now.