Network Marketing in India
Over the past ten years, there has been a global increase in the popularity of MLM in India. More and more people are getting involved in network marketing to move away from low-paying wage jobs and start their own businesses. With a population of over 1.3 billion people (2017 data), the growth prospects of the MLM industry in the country are limitless.
INDIA AND MLM. HISTORY OF DEVELOPMENT AND FUTURE OF THE INDUSTRY
In India, network marketing was introduced in 1995 with the entry of the company Oriflame into the market. After 2016, the network marketing industry in India entered a phase of accelerated development, thanks to the favorable legal environment provided by the Indian government. As awareness grows, more and more people are starting their own businesses, facilitated by network marketing.
According to a report published by the Federation of Indian Chambers of Commerce and Industry and leading research firm KPMG, by 2025, the turnover of the network marketing industry will grow to 645 billion Indian rupees per year (equivalent to over 9.2 billion US dollars). According to QNet India, the percentage of female distributors in MLM exceeds 60% and continues to rise.
Unfortunately, the development of network marketing in India has also been marked by a large number of scammers and financial pyramids, hindering the growth of the legitimate direct selling industry.
The differences between multi-level marketing and investment pyramids were discussed in the article Network Marketing VS Pyramids
A tragic event related to a pyramid scheme occurred in Kolkata in 2013 (the capital of the state of West Bengal). The fraudulent Saradha scheme led to numerous investor suicides. Around 1.7 million people lost over 5 billion dollars, and the scandalous statement that legal MLM companies were also fraudulent schemes led to the arrest of the CEO and two top managers of Amway India.
LEGITIMACY OF MULTI-LEVEL MARKETING IN INDIA
The state of Kerala (southwest of the country) was the first to legalize direct selling. Due to the absence of a national-level structure, transparent network companies were at risk of closure due to the Money Circulation Act, aimed at combating counterfeiters and shadow economy. Although the direct selling industry is not directly related to the competencies of this law, its definition does not provide information on the differences between legal and shadow network marketing businesses.
The salvation for the MLM sector came in the form of the "Direct Selling Guidelines" circular issued by the central government in 2016. Since then, numerous multi-level companies have emerged, leading to a revolution in the field of network marketing in India.
The guiding principles of the circular are aimed at strict control over the activities of network enterprises, protecting people from fraud, and encouraging legitimate enterprises to scale their business in India.
Thus, a system of MLM companies' operation and nuances of their registration is currently prescribed. All marketing plans must be accessible and transparent, indicating the percentage of income from personal investments and bonus deductions after tax deduction.
TOP 3 MLM COMPANIES IN INDIA
Since the inception of network marketing in India, international MLM giants have opened their offices here. Here are the top network companies that operate absolutely transparently and provide employment to hundreds of thousands of people.
ORIFLAME
Oriflame has been operating in India for over 24 years. The company sells cosmetics and personal care products.
In India, Oriflame sells its products through a website and is the oldest MLM enterprise that still enjoys a solid reputation.
AMWAY
Amway India is a subsidiary of the Amway corporation, the largest international MLM business that distributes consumer goods (personal care products, household chemicals, cosmetics, dietary supplements, cookware, water filters, etc.).
In 1998, Amway received approval from the Foreign Investment Promotion Board of India. Starting with the sale of 6 product lines in 1998, Amway India now operates 140 retail stores across the country, selling over 150 products.
MODICARE
Modicare is one of the most popular Indian national companies with a distribution network of over 300,000 people. Founded in 1996, Modicare was the first Indian company to introduce the concept of multi-level marketing. Modicare deals with several product lines, including health, beauty, and home care products.
India is on the brink of a revolution in network marketing. A favorable attitude towards foreign investors is leading to the establishment of branches of global network companies.
With a fair and transparent approach to organizing business, significant success and national support can be achieved. Using India as an example, we see that MLM takes the country's economy to a new level of development, contributes to industrial growth, and creates jobs.
When expanding a company and entering the international arena, it is important to optimize business processes according to the niche development trends in a specific country. The team at FlawlessMLM, drawing on years of experience, will help scale your business and minimize potential risks when entering a new market.
Subscribe to our newsletter
so you don't miss out on useful information from the world of MLM
