Archive for category Organised Retailing

ICRIER REPORT TO GOVT.OF INDIA ON NETWORK MARKETING INDUSTRY

Indian Council for Research on International Economic Relations (ICRIER) released a report to the Media titled “Socio–Economic Impact of Direct Selling: Need for a Policy Stimulus” at The Claridges Hotel, New Delhi in the presence of Hon’ble Minister, Shri Ashwani Kumar, Minister of State (Planning, Parliamentary Affairs, Science & Technology and Earth Sciences).
News was covered in major Newspapers

Like to add few major points of the report:
The Background India – fastest growing economies in the world
Expected to be the 12th largest economy by 2015
Growing Consumer Market
India ranked 12th largest consumer market in 2007, expected to be the 5th largest by 2025
Different distribution channels are evolving, modern retail growing –
India has become an attractive destination for foreign retailers and
manufacturers, entry of Indian corporates into retail
Many store and non-store formats have evolved
Direct selling: one of the fastest growing non-store format
Direct selling refers to selling of goods and services to the consumers
away from a fixed retail outlet, generally in their homes, workplace,
etc., through explanation and demonstration of the product by direct
sellers
One of the most labour-intensive segment

Overview of Direct Selling in India
Started in 1980s – gained momentum in 1990s with the entry of foreign
companies
Size of the sector has grown by 60% between 2003 and 2010
Products diversified from consumer durables to health and
wellness, cosmetics, personal and household products
From Tier I cities penetration into Tier II and III cities, now targeting
rural areas .Growing at 20% – expected to reach 71,200 million by 2012-13.Number of direct sellers increased from one million in 2001-02 to three million in 2009-10.Genuine direct selling companies in India – only 30

Regulatory Structure
No Nodal ministry
DIPP – FDI policy, Ministry of Consumer Affairs, Food and Public
Distribution – internal trade and consumer welfare
A ‘State’ subject under Indian Constitution
Governed by over 30 regulations at the centre, state and local levels
No sector-specificAct
Consumer Protection Act, 1986 and the Consumer Protection
(Amendment) Act, 2002: protects consumers of both goods and services from unfair or restrictive trade practices, redressal of grievances of
consumers
Prize Chits and Money Circulation Scheme (Banning) Act, 1978: checks
prize chits and similar financial schemes based purely on money circulation without any sale of goods and services
In states like Andhra Pradesh, Sikkim and Kerala, direct selling
companies were mistaken to be ‘money circulating companies’ and were
charged for violating the Act

Survey Findings: Direct Selling Companies
Primary survey of 16 direct selling companies
Majority of the companies have pan-India presence and long-term
commitment in the Indian market
80% foreign companies have wholly-owned subsidiary
75% follow multi-level marketing structure
Presence in Tier I (43% share), Tier II (38%) and Tier III (19%) cities
Investment: 70% in equipment, followed by manufacturing facilities
Investment in R&D is low
Survey found that if a stable operating environment is provided, companies could invest in R&D and develop India as a R&D hub
Majority of expenditure in organising events and product promotion
Own manufacturing facilities – account for 30-35% of the products sourced,rest contract manufacturing largely through SMEs
Average spending on training of direct sellers – 8.6 million per annum and on training of employees – 1.5 million per annum

Other Benefits
• Tax contributions
• Reduction in intermediaries in supply chain
• Training and skill development
• Sourcing from SMEs leading to technology percolation

Survey Findings: Direct Sellers
Majority are graduates, fall in the monthly income category of
40,000-70,000, fall in age group of 35-49 years, followed by
18-34 years
Over 68% have small families – convenience of working from
home
Around 64% take it up as their sole activity, 26% have
additional job
Network expansion; essential part of their operations – almost
80% work in close contact with their downlines
The 180 direct sellers surveyed had 1.28 lakhs downlines, out of
which over 10,000 joined in 2007-08
Margins are around 25%

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International

Network Marketing is a global business. In the Video below Former American President Bill Clinton endorses Network marketing. In his speech he clearly mentions when Private and Public sectors fail to give job opportunity to people, how this Industry can provide such a wide opportunity to public.

Also like to show the International exposure of RMP Infotec Pvt.Ltd. Given below is Malasian news channel report on RMP

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The first step

The Future group : Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India’s leading business houses with multiple businesses spanning across the consumption space. While retail forms the core business activity of Future Group, group subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics.

Led by its flagship enterprise, Pantaloon Retail, the group operates over 16 million square feet of retail space in 73 cities and towns and 65 rural locations across India.The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls.

In 2008, Big Bazaar opened its 100th store, marking the fastest ever organic expansion of a hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, Hyderabad and Bangalore.

The group’s speciality retail formats include supermarket chain – Food Bazaar, sportswear retailer – Planet Sports, electronics retailer – eZone, home improvement chain – Home Town and rural retail chain, Aadhaar, among others.

Future Capital Holdings, the group’s financial arm provides investment advisory to assets worth over $1 Billion that are being invested in consumer brands and companies, real estate, hotels and logistics.

Future Generali India Life Insurance Company Limited
Future Generali India Life Insurance Company Limited (FGILICL) was incorporated on October 30, 2006 to establish and conduct the business of life insurance in India, which comprises of whole life insurance, endowment insurance, double benefit and multiple benefits insurance etc. The approval for carrying on Life Insurance Business has been received from the IRDA in September, 2007.

CNBC Awaaz Consumer Awards 2009
Images Fashion Forum 2009
Coca-Cola Golden Spoon Awards 2009
Indian Retail Forum Awards 2008
The INDIASTAR Award 2008
Retail Asia Pacific 500 Top Awards 2008
Coca-Cola Golden Spoon Awards 2008

Year 2008 Asias No.1 eCommerce company RMP Infotec Pvt.Ltd. and the above mentioned retail giant of India – Future group joined hands together.This is the first step of RMP eCommerce business expansion. Know more about RMP Family Mart Plan, that is the business.

Future Group CEO about RMP :

Please send a mail to mailer@wetheguardians.org for details about the next video:

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