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Key-Note AddressTamuna Gabilaia, Executive Director, WFDSA
Mark-e-Dir: Bringing Market to Consumers
Wednesday, 17th April, 2013New Delhi
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Overview of Global Direct Selling Industry
Tamuna GabilaiaExecutive Director
April 17, 2013 Delhi, India
Month/Year
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Overview
Founded in 1978, voluntary, non-governmental organization
60 Member National DSAs Around the World: Asia – 12, Europe - 30, Latin America – 16, North America – 2
Governing Mechanism: CEO Council
Regional Federation – SELDIA
Doing Business in 170-plus Countries
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To build understanding and support for direct selling worldwide. TheFederation supports direct selling companies and associations by:
– Developing, maintaining and promoting the highest global standards for responsible and ethical conduct.
– Advocating the industry's positions and interest with governments, media and key influencers.
– Serving as a trusted global resource for information on direct selling.
– Facilitating interaction among direct selling executives on issues of importance to the industry.
Mission
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WFDSA Programs
• Women’s Economic Empowerment
• Socio-Economic Impact Studies
• Reputation Building Studies
• Corporate Social Responsibility/Philanthropy Surveys
• APEC Consumer Education and Protection Initiative
• Global Code of Ethics Initiative
• Regional Association Performance Seminars
• Minimum DSA Criteria
• Media Outreach/Public Affairs
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Socio-Economic Impact Studies
Ernst&Young IPSOS Mori Partner
Since 2004 WFDSA 24 socio-economic impact studies:
•Brazil, Canada, Japan, Korea, Mexico, Russia, Taiwan, the US (2005)
•Czech Republic, France, Finland, Germany, Poland, Italy, Turkey, UK (2007)
•South Africa, Thailand (2008)
•Colombia, India (2009)
• Canada, Chile (2010)
•Brazil and Ecuador (2011).
•Australia, New Zealand and Peru (2012)
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Global Conditions
Growth expected to dropt to 3.5% in 2013
Gains expected to 4% in 2013
Source : International Monetary Fund
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Advanced Economies2012 – 1.5 %2013 – 2%
Emerging and Developing Economies2011 – 6%2012 - 5.34%2013- 6%
Source : International Monetary Fund
Global Conditions
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Asia still projected at 7.5% on average in 2012-13
Economic Activity in Middle East and North Africa expected to accelerate
Sub Saharan Africa expected to expand at about 5.5%
Central and Eastern Europe most affected by Euro-crisis
Source : International Monetary Fund
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Global Annual Retail Sales
(USD Billion)Global Salesforce Size
(In Millions)
Global Statistical Data
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Global retail sales increased 9% year-over-year
•Global retail sales increased 9%, from US$141.2 billion to 153.7 billion.
•The number of Direct Sellers increased 9% from 84.3 million to 91.5 million.
0
20
40
60
80
100
120
140
160
2010Sales
2011Sales
2010Sellers
2011Sellers
2010 $141.2 billion
2011 $153.7 billion, 9%
84.3
91.5, 9%
Selle
rs =
Millio
ns
Global Sales & Sellers 2010 - 2011
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Sales were UP in all major regions
2011 Retail Sales (US$) 2011 Seller Count
Asia Sellers *
52 million, 15% 57% of total
Americas Sales$60.4 billion, 8%
39% of total
Africa / Mid-East Sales
US$ 1.4 billion, 6%1% of total
Europe Sellers11.4 million, 4%
12% of total
Europe SalesUS$ 25.0 billion, 4%
16% of total
Americas Sellers
26.7 million, 4% 29% of totalAsia Sales
$ 66.9 billion, 12% 44% of total
Africa / Mid-East Sellers
x
Global Total Sales
US$ 153.7 billion, 9%
x
Global Total Sellers
91.5 million, 9%
8%
4%
12%
* Not including China
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In 2011, 2 new countries joined the Billion Dollar Club: In 2011, 2 new countries joined the Billion Dollar Club:
Indonesia and Turkey
Country
2011 Retail Sales [US$
billions]
Number of Sellers (millions)
% Sales Growth (Local
Currency)1 United States $29.9 15.6 4.6%2 Japan $23.9 3.4 -4.7%3 China $16.3 not available 16.2%4 Korea $12.9 4.2 4.7%5 Brazil $12.0 2.8 5.2%6 Mexico $6.3 2.2 10.2%7 France $5.1 0.5 2.2%8 Germany $3.7 0.3 -5.1%9 Russia $3.6 4.1 4.6%
10 Italy $3.4 0.4 -- 0.0%11 Malaysia $2.9 7.4 30.9%11 Venezuela $2.9 1.2 75.5%13 Taiwan $2.8 4.7 3.0%14 Canada $2.2 0.7 -- 0.0%15 Thailand $2.1 15.6 8.3%16 Colombia $2.0 1.2 14.1%17 United Kingdom $1.9 0.4 -2.0%18 Argentina $1.6 0.6 23.0%19 Australia $1.4 0.4 -12.4%20 Peru $1.2 0.4 8.0%20 Turkey $1.2 1.2 17.6%22 Indonesia $1.0 8.3 10.0%
India $982 3.9
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DSA CODE OF ETHICSDSA CODE OF ETHICS
Who must comply with the Code?
DSA‘s
2
4
5Member
Companies
SalesDistributors
CompanyEmployees
CodeCompliance
WFDSA and DSA Code of Ethics
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DSA CODE OF ETHICSDSA CODE OF ETHICS
OUR PROMISE TO CONSUMERS:
• No deceptive or unfair sales practices
• Complete and accurate information about the products
• No false or misleading testimonials
• Written documentation outlining terms of sale
• Contact information
• Clear return policies
• Respect for consumer privacy
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DSA CODE OF ETHICSDSA CODE OF ETHICS
OUR PROMISE TO DIRECT SELLERS:
• No misleading, deceptive or unfair recruiting practices
• Clear, transparent and honest
• No claims that cannot be verified by fact/promises that can’t be fulfilled
• Regular information regarding your sales and other important business aspects
• Written information detailing your relationship with the company
• No unreasonably high fees
• Inventory Buyback
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DSA CODE OF ETHICSDSA CODE OF ETHICS
OUR PROMISE TO COMPANIES
We pledge to abide by the spirit of fair competition.
We pledge not to entice or solicit direct sellers of another company.
We will not unfairly denigrate the activities of another company.
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DSA CODE OF ETHICSDSA CODE OF ETHICS
GUIDELINES FOR CODE COMPLAINTS
Complaints should be in writing and should Include the following information:
• The date and details of the incident
• The individuals involved
• The code violation (if possible)
• Efforts made to resolve the matter
• The cost of the product (including invoices or other documentation)
• The current status of the complaint
• Resolution being sought
Contact the
Company
Resolution
Directly with the
Company
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DSA CODE OF ETHICSDSA CODE OF ETHICS
GUIDELINES FOR CODE COMPLAINTS
Complaints should be in writing and should Include the following information:
• The date and details of the incident
• The individuals involved
• The code violation (if possible)
• Efforts made to resolve the matter
• The cost of the product (including invoices or other documentation)
• The current status of the complaint
• Resolution being sought
Contact the DSA Code
Administrator
Resolution with Assistance of Code
Administrator
If not resolved…
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DSA CODE OF ETHICSDSA CODE OF ETHICS
KEY PROVISIONS—COOLING OFF
What is cooling off?
• If a consumer agrees to purchase an item and changes her mind, she has the right to cancel within a specified number of days
• The number of days varies by country
This is called
COOLING OFF
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DSA CODE OF ETHICSDSA CODE OF ETHICS
KEY PROVISIONS—COOLING OFF
• The Code of Ethics allows consumers to cancel an order:
• Without any specific reason
• Within a specific time limit
• Your order receipt should clearly state what the policy is in your country
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DSA CODE OF ETHICSDSA CODE OF ETHICS
KEY PROVISIONS—EARNINGS CLAIMS
• Companies and direct sellers cannot provide false or misleading statements about the earnings opportunity
• Statements made must be documented by facts
Source: IPCC
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DSA CODE OF ETHICSDSA CODE OF ETHICS
KEY PROVISIONS—PRODUCT BUYBACK
• Company must not encourage inventory purchases in unreasonably large amounts
• If you terminate your business, the company will buy back product you haven’t sold
– if it is still marketable
– less any costs such as handling and commissions
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DSA CODE OF ETHICSDSA CODE OF ETHICS
KEY PROVISIONS—PRODUCT CLAIMS
• Companies or direct sellers must not make untrue claims about a product
The skin cancer treatment
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DSA CODE OF ETHICSDSA CODE OF ETHICS
SALES AND TRAINING AIDS• Companies shall prohibit Direct Sellers from marketing or
requiring the purchase by others of any materials that are inconsistent with Company policies and procedures.
• Companies shall provide adequate training to enable Direct Sellers to operate ethically.
• Direct Sellers must:
• (i) utilize compliant materials
• (ii) refrain from making the purchase of such sales aids a requirement
• (iii) provide sales aids at a reasonable and fair price
• (iv) offer a written return policy
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Global Code of Ethics Program
WHAT?
•Global Code Promotion/Communication Initiative
•Approved by the CEO Council
•Demonstrates commitment to your direct sellers and their customers
•Proactively Communicates Standards of Excellence to External Audiences
•Raises the Bar on Performance
•Encourages Ethical Behavior
•Increases public awareness of the Code
WHO?
•DSA’s
•Member companies
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Global Code of Ethics ToolkitGlobal Code of Ethics Toolkit
Ethics ToolkitEthics ToolkitEasy to read copy of CodeEasy to read copy of Code
Short pamphlet summarizing CodeShort pamphlet summarizing Code
Separate materials outlining key takeaways Separate materials outlining key takeaways for consumer as well as distributorfor consumer as well as distributor
PowerPoint presentations for use by local DSAsPowerPoint presentations for use by local DSAsand companiesand companies
Q&A document for training purposesQ&A document for training purposes
Wallet sized card for use in the fieldWallet sized card for use in the field
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ToolkitToolkitThe Code of Ethics ToolkitThe Code of Ethics Toolkitincludes a short pamphletincludes a short pamphletsummarizing the Codesummarizing the Codecustomizable for each DSA customizable for each DSA
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ToolkitToolkitOutlines key takeaways for Consumers and Direct Outlines key takeaways for Consumers and Direct SellersSellers
The toolkit also contains training materialsThe toolkit also contains training materials
Q&A Document
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Thank You For Your Time