Direct selling industry could expand to Rs 64,500 cr by 2025: FICCI, KPMG Report

As India's Rs 7500 crore direct selling market awaits guidelines from the Centre on the direct selling business model, a recent FICCI-KPMG study suggested that the industry has the potential to reach Rs 64,500 crore by 2025 and can create potential employment for about 18 million people across the country.

The industry is estimated to be around Rs 7,500 crore in FY14. FY15 details is yet to released.

FICCI-KPMG report titled 'Direct Selling:Gujarat' released here today claimed that the state's direct selling market's potential is estimated to touch Rs 4,800-5,000 crore by 2025 at CAGR of approximately 12-16 per cent.

The report highlights that there is a self-employment potential of 1.35 -1.45 million direct sellers in Gujarat by 2025. Women currently form 60 per cent of workforce in Gujarat; the industry has the potential to economically empower more than 0.8 million women.

Moreover, the contribution to the Government revenue in the form of indirect taxes from the Gujarat direct selling industry is also expected to increase to Rs 450-500 crore by 2025.

The direct selling industry in India is one of the fastest growing non-store retail formats, recording double digit growth of more than 16 per cent over the past four years.

Gujarat grew second highest recording a CAGR of 16.5 per cent between 2005-06 and 2011-12. While the direct selling industry in Gujarat has witnessed reasonable growth in the past few years, the industry faces certain regulatory challenges which impacted the industry in FY13. The increasing working population in cities like Ahmedabad, Gandhinagar and Vadodara also make Gujarat a good direct selling market. The industry picked up in FY14 and witnessed a growth of 11 per cent.

The market today is at approximately Rs 280-300 crore.

Rajat Banerji, chairperson - FICCI Direct Selling Task Force said, "We find in Gujarat an enhanced entrepreneurial spirit and keenness to pursue available business opportunities. This has led to a steady growth of this industry in the state."

The FICCI-KPMG India report further estimates that the state has witnessed a continuous growth in the number of direct sellers with a growth rate of 23 per cent between FY10 and FY14. The number of direct sellers has increased from 0.12 - 0.14 million in FY10 to 0.29 - 0.31 million in FY14. Women constitute about 60 per cent of the total direct seller's workforce of the state. It has been observed that with the rising costs of living, the direct selling business is gaining popularity among men too who are looking at it as a supplementary earning opportunity. The share of men in the workforce has increased from 38 per cent in FY12 to about 42 per cent in FY14.