Many direct selling companies do business worldwide. Each company must carefully consider entering a new country. Three areas to consider are how well retail sales are doing in the country, what products and services are needed, and what legal restrictions may be unique to the country.
The World Federation of Direct Selling Associations (WFDSA) provides a wealth of information about direct selling and multilevel marketing around the world. The WFDSA represents 63 national direct selling associations. The most recent worldwide statistics comes from 2017. The total retail sales increased to 189.6 billion with 116.7 million distributors. The majority of distributors are women (73.8%). From 2016 to 2017, worldwide estimated retail sales increased by 1.6%. The United States and China are both at 18% of worldwide sales. Several markets dramatically grew. For example, Indonesia, Kazakhstan, Philippines, United Arab Emirates, Argentina, Romania, Slovenia, Norway, Russia and Turkey all had double digit increases in retail sales. Overall in the Africa and the Middle East region, retail sales rose by 9.9%. The Netherlands showed a loss of 14.4%.
The type of products most often sold were personal care and cosmetics at 32% (down 2% from 2016), with wellness products at 34% (up 5% from 2016)and home goods at 11% (down 2% from 2016). As companies expand into other countries, the products sold changes.
Companies should design products for the culture and lifestyle of purchasers. Selling to the poor of the world is a challenge. Hammond and Prahalad give examples of direct selling companies making progress in both India and Brazil. For example, Modicare started in India. Modicare developed low cost personal care products Products are not the only consideration in crossing international boundaries (For more information see article on “What do the poor buy?” ).
Another key consideration is the compensation plan. Laws on how many levels a company can pay down and how much of the sales price can be paid in compensation are regulated differently across the world.
The good news is that direct selling continues to grow around the world. Each culture has varying beliefs about products and about direct selling. With careful consideration, the differences can work toward the company’s favor.