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Gujarat's direct selling industry to grow to Rs 5,000 crore by 2025: FICCI-KPMG report

Economic Times:  May, 2016

Ahmedabad: Thousands of self-employed women in Gujarat will enable the state's direct selling industry to grow to Rs 4,800-5,000 crore by 2025 from Rs 2,800-3,000 crore at present, according to a FICCI-KPMG India report. 

Gujarat achieved the second highest compound annual growth rate of 16.5% in the country between 2005-06 and 2011-12. The direct selling industry across India, pegged at Rs 7,500 crore, recorded 16% growth a year over the past four years. 

While the direct selling industry in Gujarat has fared well over the past few years, it faces certain regulatory challenges which had an impact in 2012-13. 

However, being one of the most industrially developed states in India, Gujarat boasts one of the highest per capita incomes in India. This has in turn led to higher expenditure on consumer goods. The increasing working population in cities such as Ahmedabad, Gandhinagar and Vadodara also make Gujarat a good direct selling market. The industry picked up in 2013-14 and witnessed a growth of 11%. 

The FICCI-KPMG India report estimates that the state has witnessed a continuous growth in the number of direct sellers with a growth rate of 23% between 2009-10 and 2013-14. The number of direct sellers has increased from 0.12-0.14 million in 2009-10 to 0.29-0.31 million in 2013-14. 

Rajat Banerji, chair, 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." 

Rajat Wahi, head of consumer markets at KPMG in India said, "The industry's functions heavily rely on individuals to accomplish sales which give rise to a number of fraudulent businesses emulating the form. This is one of the biggest challenges the industry faces to its growth today. The need of the hour is to revisit the existing laws and bring about clarity in the regulatory environment, rebuilding trust and sensitivity."