Direct sellers plan action to stop online sales without their consent

The India Direct Selling Association (IDSA) is in talks with its members for the industry to comply with the government's new regulations on direct selling

First Published25 Sep 2016
Photo: iStockphoto<br />
Photo: iStockphoto

New Delhi: Direct sellers such as Amway India Enterprises Ltd, Tupperware India Pvt. Ltd and Network Communications are planning to take steps to prevent their products from being sold online without their consent in the wake of new guidelines issued by the government.

The India Direct Selling Association (IDSA) is in discussions with its members for the industry to comply with the government regulations.

“We are concerned that online sellers have been selling Tupperware products. We do not sell to online sellers as for us offering the opportunity of economic empowerment to our sales force is very important,” Tupperware India managing director Shilpa Ajwani told PTI.

“We have in the past written to online sellers to refrain from offering our products on their e-commerce sites. We are assessing next steps in accordance with the direct selling guidelines,” she said.

Amway said it is engaging with stakeholders to understand the key aspects of the guidelines and develop strategies to harness the industry’s potential. “The new guidelines have put some important points for consideration on third-party online marketplaces. We are supportive of these efforts and believe they will strengthen consumer protection,” Amway India chief executive Anshu Budhraja said.

On 12 September, the government issued guidelines to regulate direct selling and multi-level marketing businesses. Under the norms, no person can sell products of a direct selling entity on an e-commerce platform/marketplace without the prior written consent of that direct selling entity.

“IDSA is consulting with all the member companies to find the ways and devise the strategy to control and ensure compliance of this condition with due consideration to the interest of the consumers and direct sellers,” IDSA chairman Jitendra Jagota said.

Another direct seller, Network Communications, said there were no issues as its products were sold by its own distributors. “We will find out if these are being sold by our authorized distributors. If yes then we don’t have a problem; if not we will approach the regulatory authorities to take due steps,” said Network Communications chairman and managing director Sujit Jain.

“We will also make sure distributor is not selling it bellow certain price point decided by the company,” Jain said.

According to Budhraja, any product sold via third-party online channels create an unnecessary risk for the consumer.

“People purchasing products through these channels run the risk of receiving products that could be, among other things, out-of-date, spoiled, altered, or even an imitation.” He said its distributors, Amway Business Owners (ABOs), are the only authorized sellers of Amway products.

“All of Amway’s products sold by ABOs are backed by a refund policy. We don’t offer any refund on a product sold through a third-party online platform,” he said.

According to a report by industry body Ficci, the direct selling industry in India is estimated to be around Rs7,500 crore. It has potential to attain a market size of Rs15-20 billion by 2025 on account of increasing income of middle class households, it added.

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