Network marketing stands as one of the most effective business models, attracting increasing interest from entrepreneurs and distributors each year. According to Zion Market Research, the global network marketing industry is projected to grow at a compound annual growth rate (CAGR) of 6.5%, reaching a turnover of $329 billion by 2030. But what is happening in this dynamic industry today?
Dynamics of the direct selling industry
The direct selling market, which includes network marketing, began its journey back in 1933 and has been dynamically evolving ever since, opening new horizons for businesses. Over the past few years, the industry has faced numerous challenges, such as the COVID-19 pandemic, economic instability, and global inflation. Nevertheless, the sector demonstrated resilience and successfully adapted to new realities.
According to a study by the World Federation of Direct Selling Associations (WFDSA), the global direct selling industry experienced a 2.8% growth in dollar terms between 2019 and 2023.
During the pandemic, sales in the MLM industry surged to $170.1 billion. However, in 2023, they amounted to $167.7 billion, reflecting a 2.3% decrease compared to the previous year. Despite this decline, the beginning of 2024 saw a strong recovery in sales, which continues to gain momentum.
The MLM industry is developing unevenly across continents and countries. In terms of sales volume in 2023, the most significant markets in the regional distribution were:
1. Asia
The direct selling market in Asia accounted for 40.3% of the global turnover, amounting to $67.573 billion. Among Asian countries, South Korea led the region with industry revenues reaching $16.3 billion. Promising markets for the MLM business include Kazakhstan, with a remarkable market growth of 30.4% in 2023, India at 11.8%, and New Zealand at 6.7%.
2. America
The network marketing industry in the Americas generated $62.632 billion in 2023, representing 37.3% of the global market. The United States dominated the region, with total industry revenues exceeding $40 billion. Notably, Argentina experienced the highest growth in MLM business, with total market turnover increasing by an impressive 114.5% in 2023.
3. Europe
With sales of $36.149 billion, Europe accounted for 21.6% of the global direct selling market. The MLM industry is expanding actively in countries such as Germany, where the market volume surpassed $19.760 billion, followed by France at $4.706 billion and Italy at $2.959 billion.
4. Africa
The network marketing industry in Africa grew to $1.34 billion in 2023, making up 0.8% of the global MLM market statistics. The most developed market in the region is South Africa, where revenues are approaching $650 million.
Distributors in the network marketing industry
Despite the challenges posed by a complex economic environment and other negative factors, the overall number of distributors in the direct selling industry continues to grow. According to Statista, by the end of 2023, over 180 million distributors were involved in the network marketing industry worldwide. By September 2024, this number had increased to 182.1 million.
The ongoing digitization of processes has significantly contributed to the expansion of distributor networks, making it easier to train, recruit partners, and sell products. Additionally, the desire to improve financial well-being has motivated many to join the MLM business, with over 40% of people globally dissatisfied with their current wages. Among distributors, 75.5% are engaged in direct selling to earn additional income, while for 24.5%, the MLM business serves as their primary source of income.
Of the total number of distributors, 134.7 million are women, accounting for 74% of the global total. This trend is largely driven by the flexibility offered by the network marketing industry, which allows women to work from home on their own schedules, balancing professional and personal responsibilities. Additionally, women are motivated by the opportunity to achieve financial independence and build their own businesses.
Popular product categories in the MLM
Network marketing enables businesses to increase sales without significant advertising costs, making it an increasingly popular strategy for selling products and services. Approximately 100 product and service categories are promoted through direct selling, with the following being the most popular:
1. Wellness
Dietary supplements, vitamins, and other health products represent the largest product category in the direct selling industry, accounting for 31.7% of the global market. Sales of wellness products dominate in Asia, where they account for 38.6% of the market, and Europe, at 32.1%. Among individual countries, this category has a particularly high share in India (74% of the market) and the Netherlands (72%).
2. Cosmetics and personal care
Decorative cosmetics, perfumes, and skincare, haircare, and body care products make up 24.2% of MLM industry sales. The largest volumes in this category are in the Americas, where they account for 28.9% of the regional direct selling market, and in Europe at 23.4%. Cosmetics are especially prevalent in Kazakhstan, making up 37% of the country’s network marketing market, and in Brazil, where they account for 73%.
3. Home goods
Household appliances, kitchenware, cleaning products, and other home goods represent 17% of global MLM business sales. Asia dominates this category, contributing 25% of the total market. Among countries, home goods are in high demand in South Korea (35% of all MLM sales in the country), France (23%), and Mexico (17%).
4. Travel
Services such as tour organization, airline ticket sales, hotel bookings, car rentals, and other travel-related offerings account for approximately 7% of the network marketing industry. The highest market shares are in Europe (12%) and Asia (10%). MLM companies specializing in travel are in high demand in China (20% of the sector’s turnover) and France (10%).
5. Real Estate
Real estate sales, rental services, and investment opportunities in construction make up 5% of the direct selling market. This category thrives in North America (10% of the market), Europe (approximately 7%), and Asia (5%). In the U.S., real estate accounts for 15% of the MLM industry, while in Turkey, it represents 10%.
Summary
In conclusion, the network marketing industry continues to evolve dynamically, adapting quickly to new conditions and enabling entrepreneurs across continents to effectively increase sales and scale their businesses. However, to establish a successful MLM business, it is crucial not only to monitor industry trends in your region but also to deeply understand its specifics, develop the right marketing plan, and implement a reliable software platform.
