Panel Discussion on International Regulation
John Holloway, Executive Director, Direct Selling Association
of Australia
Mark-e-Dir: Bringing Market to Consumers
Wednesday, 17th April, 2013
New Delhi
Direct Selling – An Australian Perspective
Direct Selling is an economically and socially accepted channel for retailing
consumer products
Business models are changing and little understood or conveniently
stereotyped by key stakeholders
Australia’s regulation of direct selling has pronounced strengths and
weaknesses.
Direct Selling is a socially and economically accepted channel for retailing
consumer products
• 400,000 Australians engaged in distributing member products
• Technology and consumer behaviour enhance direct selling’s relationship
and experiential selling strengths
• Social connect is a key driver for distributor engagement
• True size of Australia’s direct selling market is not known
• DSAA members report $1.4 billion in annual sales
• Australian market relatively world competitive
Sales 2011
USD Billion
Source: WFDSA
5
10
15
20
25
30
Distributors 2011
Source: WFDSA
5 Million
10 Million
15 Million
Participation Rates 2011
Source: WFDSA, DSAA
Per Capita Sales 2011
Source: WFDSA, DSAA
Direct Selling is a socially and economically accepted channel for retailing
consumer products
• 400,000 Australians engaged in distributing member products
• Technology and consumer behaviour enhance direct selling’s relationship
and experiential selling strengths
• Social connect is a key driver for distributor engagement
• True size of Australia’s direct selling market is not known
• DSAA members report $1.4 billion in annual sales
• Australian market relatively world competitive
• Relatively low cost structure makes direct selling an attractive retail
option
• Small business kindergarten
Business models are changing and little understood or conveniently
stereotyped by some stakeholders
• Direct selling is increasingly multi channel
“Direct Selling” – selling a consumer product or service, person-toperson, away from a fixed retail location, usually in a home or workplace
Agency
Model
Wholesale
Model
DSO
Direct Seller
Independent Contractor
CONSUMER
Consumer
Group Purchaser
Seller
Seller/Business Builder
Business Builder
Direct Selling Organisation
Direct Seller
Door-to-Door
CONSUMER
Direct Selling Organisation
Direct Seller
Distance Selling
Door-to-Door
Store Selling
CONSUMER
Business models are changing and little understood or conveniently
stereotyped by some stakeholders
• Direct selling is increasingly multi channel
• Growing awareness by policy makers
• Some interests argue the best way to overcome relatively small
consumer detriment is to restrict retailing to store selling
Australia’s regulation of direct selling has pronounced strengths and
weaknesses
• Prior to the Australian Consumer Law (ACL) direct selling was regulated
by a patchwork of Federal, State and Territory law.
• DSAA membership assures distributors and consumers of ethical trading
behaviour
Sets out transactional
requirements for members and
distributors, product guarantees
and representations
Regulates certain behaviour
between members and between
members and their distributors,
including
• Entry Costs
• Inventory Management
• Buy-back
• Marketing Plans
Australia’s regulation of direct selling has pronounced strengths and
weaknesses
• Prior to the Australian Consumer Law (ACL) direct selling was regulated
by a patchwork of Federal, State and Territory law.
• DSAA membership assures distributors and consumers of ethical trading
behaviour
• ACL, singular consumer protection and fair trading law for all Australia,
commenced January 2011 . Co-operative venture between nine
governments recognising the social and economic benefits of the reform.
Policy and administration underpinned by an inter-governmental
agreement. Details at www.consumer law.gov.au
• ACL’s regulation of unsolicited (direct) selling is problematic. DSAA
achieved concessions, but a fresh regulatory approach is needed to
capture the consumer protection and business certainty challenges in the
non-store retail environment.
Thank You For Your Time