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article imageOp-Ed: Direct selling brings challenges, rewards in emerging markets

By Kimberly Reynolds     Feb 18, 2014 in Business
With the growth of the emerging markets, direct sales companies are embracing the challenges and rewards of encouraging individual entrepreneurship.
“The economic news coming out of emerging markets early in 2014 has been grim,” said Vijay Eswaran, Founder of QNET.
Statistics from Bloomberg News show the Emerging Markets Index has lost 8.3 percent since the start of the year. The Argentinian government made the decision to devalue the peso, which triggered a huge sell-off in emerging-market currencies.
According to a report in Businessweek.com, $2.9 trillion has been erased from the value of equities worldwide this year. The looming elections in India, Brazil, Turkey, Indonesia and other emerging markets are exerting pressure on their economies.
As unsettling as this is, there are bright spots giving much needed hope to people in these countries. Among the most encouraging news is the rise and acceptance of direct sales marketing. While other industries are faltering, the rise of the direct sales industry is giving new opportunities to many entrepreneurs.
People and Profits
Companies such as QNET, Shaklee Corp. and Tupperware have seen overall sales increase, due primarily to the growth in overseas and emerging markets. In an article from The Motley Fool, by Michael Lewis noted that Tupperware sales in 2013 grew 1% to $717 million despite weak US sales. Revenue in emerging markets, however, was up and now accounts for 63% of Tupperware’s global sales.
The revenues, impressive as they are, mirror the statistics on the growth of their respective sales forces. Lewis also disclosed that Tupperware has increased the number of representatives by 4% in 2013 to 2.9 million. Companies like QNET, a wellness and lifestyle company, has ramped up their presence in Asia, South-East Asia, India, and the Middle East to capitalize on the demand from customers and interest from prospective independent sales representatives.
Micro Businesses
The rise of the emerging market middle class, technological innovations and a relaxing of restrictions on capitalism has triggered this growth. As more people begin to discover the benefits of a market-based economy, entrepreneurism has flourished.
Direct sales as a career has many advantages for those who have limited access to capital but want to improve their quality of life. Most direct marketing companies require a minimum in startup cost. In addition, advances in technology have made buying and selling easier than ever.
Communication Advances
Government policies may have opened the door for direct sales, but the advances in technology are driving people through the door in increasing numbers. Cell phones, once forbidden to private owners or beyond the financial means of most, are now commonplace. This one change has released a whole new era in communications for millions in the emerging markets.
According to QNET, this new communications capability has fueled a growth in direct sales as representatives and customers now have access to innumerable quality brand name products. The desire to obtain a better lifestyle for themselves and their families is behind the massive increase in the direct marketing sales force.
Social Media
Social media, primarily accessed through smartphones has created demand for products and an easy and affordable way to market for the local representatives. Communication between the sales force and the parent company is instantaneous as compared to the past when it took weeks using local mail services.
The rise in direct sales in these countries has supported the creation of a delivery infrastructure that is safe and secure. UPS, DHL and other global delivery companies are now firmly entrenched in nearly all emerging markets. The ability to place an order and receive delivery in as little as 2 days has driven demand even further.
Digital Payment
Nothing happens in business without easy, secure access to money for both the buyer and seller. The improvements in digital payment technology have created an easy, protected and reliable way for local sales forces to transact their business operations.
Paypal is the leader in the field, but direct marketing companies are exploring the digital payment trend. Many companies are developing their own secure online options.
Online Security
Online security in emerging markets is seen as a major challenge for both the Independent Representatives and their parent companies.
A 2011 report by the World Economic Forum titled The New Internet World: A Global Perspective on Freedom of Expression, Privacy, Trust, and Security Online, found ensuring “online security to be a constant threat to business in emerging markets.”
To combat this companies such as QNET are stepping up to address this concern. They recently became certified by TRUSTe, the world’s largest data privacy management company, to give their customers and Independent Representatives a secure Internet experience.
Growth Challenges
With growth, especially in an emerging economy, come logistical and operational challenges. These include a lack of industry regulations, unethical officials and systems as well as the difficulties in local infrastructure.
Despite these concerns, companies like QNET see emerging markets as their ticket to growth for years to come.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about International business, Entrepreneurial, Emerging markets, direct sales
 
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