Direct selling is a huge global wealth transfer opportunity – Business Insider Africa

Business Insider Edition
Post pandemic, the world has seen a rise in the ‘gig economy’ and micro-entrepreneurs. This is particularly the case in regions of Asia and Africa where self-reliance and entrepreneurship is even more of a necessity than elsewhere. These trends have resulted in the rapid growth of direct selling across developing markets, creating economic agency for people around the world. Exploring opportunities in direct selling requires a certain amount of street smarts, awareness, basic education, etc. Simply put, it is just like starting any other business.
Direct selling is a business model that provides a platform with which to become micro entrepreneurs and do so with minimal capital. It is an industry that, over the last three years, has grown 2.3% worldwide, as people seek alternative or additional streams of income.
It’s a massive global industry which represents the world’s largest independent workforce. In 2020, the last year for which the World Federation of Direct Selling Associations (WFDSA) has updated records, 125.4 million direct sellers generated $179.3 billion.
According to the WFDSA’s 2020 Direct Selling Report, global direct sales increased by 2.3 per cent year-on-year (YoY), from US$175.3 billion in 2019 to US$179.3 billion in 2020. The report also demonstrates that the Compounded Annual Growth Rate (CAGR) experienced over the last three years continues to move in an upward trajectory despite challenges like COVID-19 and other factors.
During that same time the industry saw the largest growth in Vietnam, Argentina, and UAE, and for companies like QNET, one of the world’s leading online direct selling companies founded in 1998, this is proof of the industry’s potential for sparking economic growth and employment.
In India, an important market for QNET the company has more than 100,000 active distributors, with a significant number of its top distributors being women, some of whom state that ‘men find direct selling far more difficult… Women usually have all the traits needed to be successful in direct selling’ and that ‘QNET not just empowers women, but also teaches them to uplift the society in which they live’. The Indian direct selling market grew 7.7% during the pandemic, according to a report by the Indian direct selling association.
The company sells health, wellness, lifestyle, and education products to customers in nearly 100 countries and has a physical presence in more than 25 nations. One of its key growth markets is sub-saharan Africa, where educated, motivated micro-entrepreneurs are enthusiastically adopting direct selling.
QNET has just launched its new market in Nigeria with a particular focus on providing opportunities for women. The company says its business model and mentorship encourages self-enterprise and financial independence.
But, the company says, there’s a problem. In many parts of the world, it says, direct selling remains unregulated. This, combined with rogue distributors, means that both legitimate and illegitimate businesses in the sector can be tarred with the same brush.
QNET for example, is backed by a worldwide community of distributors, or Independent Representatives, in the company’s parlance.
These personnel use the direct selling opportunity in regions, countries and communities that have little or no exposure to this type of sales model, to build their own business. This often leads to misconceptions about the business. Contrary to what some may say, QNET does not function via an investor model. Distributors earn a commission only by actual selling of products that the company offers on its e-commerce portal–the only thing that the distributor has to do is to promote the product to a potential customer and refer them to the QNET portal using a referral ID, which in turn, attributes the sale to them.
To ensure that the public has a more accurate view of things, QNET has embarked on a campaign focused on education and awareness; social media interaction, stakeholder engagement; training and events, PR programs and seminars.
A force for good…
The speed at which the direct selling industry is growing in some markets is both a challenge and an opportunity. The challenge of both regulation and quality control of distributors must be addressed to capitalize on the huge opportunity.
Africa in 2020 saw a 17.3% year-on-year increase in the number of individuals involved in direct selling, according to the WFDSA report, and QNET is tapping into the trend by expanding its presence in the region. The company already has a local presence in Rwanda that serves as its East African hub and an office in Cote d’Ivoire to support the West Africa region.
According to the International Labor Organization (ILO), youth in sub-Saharan Africa regularly suffer from under-employment and lack of decent working conditions. And in North Africa, unemployment rates among a generally more educated labor force are quite high.
Ali Allu, a university graduate in West Africa says: “In the past and in parts of Africa, education was the key to success: a good job, a good salary, and a better livelihood. Nowadays, while education is always a good thing, it is no longer a guarantee of success. Therefore, you have to look for opportunities and explore them. Direct selling is one of those opportunities that young people should consider taking advantage of. ”
But in many places, the pace of progress means direct sellers operate without governing laws. QNET says it thinks this is their industry’s biggest challenge.
“Legislation is key,” says Biram Fall, QNET’s General Manager for the African region and adds that “delays in enforceable laws only increase the likelihood victims get taken advantage of in the vacuum.”
“Legislation is the lesser evil, otherwise [direct selling] will be subject to a lot of speculation, open to abuse and fraud,” says Fall. “Legislation is the future, especially as the industry expands. The laws have to catch up.”
Lack of a legal definition for direct selling allows for suspicion, distrust, and falsehoods to take hold. The industry has sometimes even been unfairly compared to pyramid schemes.
It’s an accusation the company is not afraid to confront. It says lack of understanding is mainly to blame and believes that robust regulation governing the industry is needed in emerging economies to turn perceptions around.
To that end, QNET, in March 2022, launched a public education campaign in Sub-Saharan Africa on how to identify a scam. The campaign, launched in Ghana, is being disseminated through radio, television, social media, print media and on billboards.
Its message is that the QNET business is not a get-rich-quick scheme. It requires hard work, planning, and perseverance, just as in any other business. Done the right way and it can change the lives of lower and middle income people across the Global South.
The company emphasizes that a legitimate direct selling business only pays commissions on product sales. In an illegal pyramid scheme, one gets financially rewarded for recruiting people under them which is not sustainable in the long run. In the QNET business, even if a person has a large network of people under them, they won’t earn if they have neither made sales or purchases.
“Helping people understand what a legitimate business model is, and how to distinguish it from the many schemes floating around, is critical as direct selling has proven it is ingrained in our economies and will only keep growing,” says QNET CEO Malou Caluza. “That’s why we applaud the regulations enacted recently in India. We need more of this.”
The erstwhile damage that Ponzi and pyramid schemes leave on middle-class people is quite debilitating–hence the need for a strict set of rules and guidelines governing direct selling.
The hope is that over time, more of the world will follow the example of markets like the US, UK, and Singapore, where direct selling is more well-known – and well legislated. In the United States, the Federal Trade Commission has detailed guidance on differentiating between legitimate and illegitimate direct selling schemes (which is almost identical to the legislation QNET has called for across Sub-Saharan Africa).
The UK’s Advertising Standards Authority has published similar guidance. Newer markets in regions such as the continent of Africa, with more growth potential (and a larger number of individuals who stand to benefit), should follow suit. In Singapore, the Ministry of Trade and Industry administers the Multi-Level Marketing and Pyramid Selling (Prohibition) Act which was first passed in 1973.
Smooth sailing ahead
The coronavirus pandemic has upended people’s relationship with their jobs and their employers. The crisis, for many, has been a moment to reassess and reprioritize.
A consequence has been that millions of workers across both sides of the Atlantic have voluntarily left their jobs. Many are doing so seeking greater control over their lives and wanting to reap all the financial benefits of being self-employed.
In the United States for instance, as many as 47.8 million people quit their jobs last year. In January 2022, another 4.3 million Americans had quit their jobs, a slight decrease of 2.8%, but still 23% above pre-pandemic levels, said senior economist at career site Glassdoor, Daniel Zhao.
In the UK, workers are said to be leaving their jobs at the highest rate seen since 2009 and recent polling revealed a whopping 47% of them had thought about changing jobs in the past three months.
“Against this volatile backdrop, it becomes vital for industry to be able to rely on regulation,” says Caluza. “The world is currently seeing an increase in new businesses–micro-entrepreneurship, SMEs, unicorns–across a post pandemic setting. The advent of these new businesses is the result of the ‘Great Resignation,’ which in turn also addresses the further need to grow. Doing so provides an avenue for employment and stability for millions and millions of people around the world, the vast majority of them women. 74.4% of direct selling representatives are women. When you enable women, you empower your whole own nation.”
It is crucial that both regulators and direct selling / micro-entrepreneurship providers not let them down.

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