Direct selling cos committed towards ethical business norms, says IDSA

Indian Direct Selling Association (IDSA) on Wednesday said its members are committed towards responsible and mature conduct of ethical business norms, adhering strictly to ''avoidance, prevention and restriction'' of business malpractices.

Every financial transaction of its member company is conducted and transacted with recorded financial statements, billing and invoicing records that could be traced and cross-referenced as mandated by the government, IDSA said in a statement.

IDSA is a self-regulatory body for the direct selling industry in India and consists of 16 leading players including - Amway, Tupperware, Oriflame, Modicare, Avon, Blulife and Herbalife International.

This statement comes after the Enforcement Directorate (ED) attached assets worth over Rs 757 crore of Amway India as part of a money-laundering investigation earlier this week.

While talking about direct selling compensation, IDSA said it is ''neither extravagant nor are out of the ordinary'' when compared to other multi-tiered business models where there could potentially be more tiers and levels of profit /revenue sharing among the distributors and retailers.

''Among the most common misconceptions around Direct Selling is that that it is a Get Rich Quick or Pyramid like the scheme is nothing but an agenda and design to subdue the hard reality that Direct Sellers have to work very hard for their income, be professionally trained and skilled and where it may take several years to reach a particular level of financial self-actualisation,'' it said.

Moreover, almost all major direct selling companies in India, that provide direct employment to more than 20,000 people in India, contribute substantially to employee welfare, benefits and caregiving schemes throughout the tenure of each employee with full superannuation benefits, it added.

Its 16 member companies employ close to 80 lakh people as direct sellers - including nearly 38 lakh women.

The Indian direct selling market is around Rs 18,000 crore (around USD 3 billion), while globally, it is USD 180 billion in industry, providing livelihoods to around 125 million individuals.

''In terms of potential, this industry clearly has a long way to go in India. This fledgling industry is routinely rocked by regulatory challenges that question the very existence of the industry from time to time,'' it said.

Recently, the government notified the Consumer Protection (Direct Selling) Rules 2021, which was to bring clarity to this industry.

''IDSA and other associations have been working with the Department of Consumer Affairs for an amendment, which now would appear to be under a cloud, given the recent negativity,'' the statement added.

The Enforcement Directorate, in a statement issued on Monday, alleged that Amway India was perpetrating a ''scam'' by running a pyramid ''fraud'' in the guise of direct selling multi-level marketing network.

Amway on its part said the ED action was with regard to an investigation dating back to 2011 and since then, the company has been cooperating with the agency and has shared all the information sought by it from time to time.

A spokesperson had said the company is cooperating with the authorities ''towards a fair legal and logical conclusion of the outstanding issues''.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)