World Federation of Direct Selling Associations
Transcription
World Federation of Direct Selling Associations
WFDSA World Federation of Direct Selling Associations annual report 2 0 1 4 Message from the Chairman We are excited to present the first Annual Report of the World Federation of Direct Selling Associations (WFDSA). The report will be the main source of information about the state of the global direct selling industry and ongoing activities of the Federation and its national association members. Direct selling recorded its highest ever global sales and number of people participating in the last year. We have much to share about the hundreds of companies and 96 million independent individuals that make up this dynamic marketplace, including which countries and categories are seeing the greatest growth and what those individuals most appreciate about working in the industry. Direct selling is a fountain of opportunity for everyone who wants to participate, whatever their gender, age or socio-economic situation. The entrepreneurial energy of our people will always be the heart of that opportunity. Increasingly, our industry is a source of choices, offering possibilities to all looking for a different meaning for their work and a significantly better balance in their life. The fast changes in our society arising from the accelerated adoption of technology and social media are, of course, affecting direct selling. Business, relationships and consumer behavior are changing at an amazing pace. The desire to consume is increasingly materializing at immediate touch, anytime and anywhere, determined by the need or convenience of the buyer. Long before people started relating with each other through websites, our independent sales representatives established their social networks. They already interacted as part of people’s lives, demonstrating a genuine concern and the desire to care for others. Direct selling is not only prepared to play in this new society but, more than that, the foundations of our industry ensure us a privileged strategic spot in this environment. Direct selling is the original social network. The social media simply offer us an opportunity to underline our strengths. No transformation of the marketplace, however, whether due to new technologies or new paradigms, will be able to undermine our commitment to the highest ethical standards. We have been diligent in tracking closely the activities of our member companies and their independent sales representatives. We also strive to communicate and promote understanding of our Code of Ethics, which represents the highest standards in the conduct of our associations, companies and independent sales representatives. The Strategic Long Range Plan adopted by the CEO Council in 2008 clearly outlines the Federation’s course of actions for the next 10 years: • Strengthen direct selling’s image • Promote ethics among direct selling companies, distributors and consumers • Improve processes and structures of WFDSA and direct selling associations • Strengthen integration and alignment of direct selling companies The continued implementation of this plan, under the mandates of different Chairpersons, shows the strength of the internal governance and the commitment of our members with the Federation’s continuity and sustainable development. In 2013 the Long Range Plan was revised and improved to meet the needs of the ever-changing marketplace while leaving the overall strategic objectives intact. In 2013, WFDSA celebrated a milestone 35th anniversary. I would like to express our deep gratitude to many people and organizations that have supported WFDSA’s mission in developing, maintaining and promoting the highest global standards of responsible and ethical conduct and advocating the industry’s positions and interest with key stakeholders, especially the 59 national Direct Selling Associations (DSAs) and one Regional Federation that belong to the WFDSA. I also would like to acknowledge and thank more than 96 million people engaged in direct selling worldwide. And I would like to express my special gratitude to everyone who supports the industry globally: our national associations, regional federation and especially, WFDSA’s Operating Group and staff for its passionate and tireless work in favor of our activity. Counting on their tireless efforts, WFDSA will continue its work to strengthen the industry and to contribute to a better world. Alessandro Carlucci Chairman WFDSA The World Federation of Direct Selling Associations (WFDSA) is a voluntary, non-governmental organization that represents the global direct selling industry in more than 170 countries. More than 60 national and regional direct selling associations are members of WFDSA, united in the effort to maintain the highest ethical conduct standards among their member companies and to build understanding and support for direct selling worldwide. Mission The WFDSA supports direct selling associations and their member companies by: • Developing, maintaining and promoting the highest global standards for responsible and ethical conduct in direct selling; • Advocating for the industry with governments, media and key influencers such as academic and consumer group leaders; • Serving as a trusted global resource for information on direct selling; and • Facilitating interaction among direct selling company executives on issues of importance to the industry. All WFDSA member Direct Selling Associations have implemented the WFDSA World Code of Ethics for direct selling in their national Codes as a minimum requirement. All direct selling companies agree to be bound by these Codes as a condition of admission of membership and continuing in a national association. The WFDSA was founded in 1978 and is based in the United States capital of Washington, DC. To learn more about the WFDSA, its Code of Ethics and its programs, visit www.wfdsa.org. Direct Selling Direct selling is the sale of a product or service based on an explanation or demonstration to the consumer by independent sales representatives who are sometimes also referred to as direct sellers, consultants, distributors or other titles. Direct sales often occur in a one-to-one or small group or party plan environment, typically in the consumer’s home or place of work. Direct sales also may take place in a branded shop or retail location, online via e-commerce or social media, or by subscription/ automatic delivery. These independent sellers earn income from direct selling companies on the sales they make. They join a direct selling business opportunity to earn extra money or even build a business with very low entry cost, low risk and company-provided training and support. Some people join direct selling companies just to buy exclusive products and services they enjoy at a discount. Worldwide, more than 96 million people are engaged in direct selling. They sell some of the world’s most sought-after brands of nutrition, beauty, home care, jewelry, clothing, home decor and other products; and energy, telecommunications, legal, financial planning, insurance and other services. Direct selling accounted for more than US$178.5 billion in retail sales globally in 2013 – a new sales record for the industry. People of all ages and backgrounds succeed in direct selling. No specific levels of education, experience, financial resources or physical condition are required. Sellers receive training and support from established companies. People say they choose direct selling because: • It provides opportunities to meet and socialize with people. • It offers flexible work schedules. Direct sellers choose when and how much they work, whether full time or part time. • It can provide extra income. Direct sellers set their own goals for earning income and determine how to reach those goals. • It offers the chance to develop new skills and be mentored by experienced leaders. • It is a low-risk way to own a business – it takes very little, if any, capital investment. • Earnings are in proportion to effort. The level of success depends on how hard a person wants to work. Governance Chief Executive Officer (CEO) Council The WFDSA is governed by the CEO Council. The Council is composed of chief operating officers of leading member companies around the world. The WFDSA chairman is a Council member elected by the Council to serve a three-year term. The CEO Council directs WFDSA affairs, activities and establishes policies and priorities. The Council meets annually to address issues affecting the industry and chart the action plan. The CEO Council approves the annual operating budget and program of work prepared by the WFDSA Operating Group. Highlights of 2013/2014 Activities and Strategic Initiatives Direct selling is a highly personal industry that thrives on robust relationships between companies, independent sales representatives, consumers and suppliers. The WFDSA, along with its member associations and their member companies, is heavily invested in improving the quality of the relationships between these groups by fostering trust, confidence and high standards for conduct. The WFDSA strategic initiatives are designed to increase public awareness, understanding and support for the real and meaningful difference direct selling makes in various economies, political systems and people’s lives around the world, every day. WFDSA and the national associations work closely together to educate key regulatory, consumer and academic groups and to promote consumer protection initiatives. Ethics Committee The WFDSA Code of Ethics states that direct selling companies and independent sellers shall not use misleading, deceptive or unfair sales practices. The Ethics Committee administers, promotes and enforces the Global Code of Ethics and implements programs to improve and strengthen the self-regulatory activities of WFDSA, local and regional associations and their member companies. The committee facilitates interaction between association Code administrators and sharing of best practices across nations. It also promotes awareness of the Code among member companies, media, regulators and consumer groups. 2013/2014 Activities Global Code of Ethics Review: To ensure the WFDSA Code of Ethics is keeping pace with the business and regulatory environments, the Ethics Committee holds Code review meetings at least once per year (July 2013 and April 2014). Potential revisions to the Code, the universal complaint handling compilation procedure and the Code’s extraterritorial provision to strengthen the Code are completed and put before the Board of Delegates for adoption. Global Code of Ethics Implementation: National associations continue to implement the Code of Ethics Initiative in their respective countries. Code administrators – the independent individuals appointed by the national Direct Selling Associations to monitor companies’ Code compliance and resolve complaints under the Code – meet throughout the year to exchange ideas and best practices for Code implementation and provide feedback on proposed Code amendments. Associations and their member companies are encouraged to use the Ethics Toolkit to widely promote the Code and to educate various constituencies about the best business practices and ethical standards of the direct selling industry. Advocacy Committee Advocacy initiatives develop and strengthen relationships with key industry stakeholders through third party research and communication. 2013/2014 Activities Australia/New Zealand Socio-Economic Impact Study (SEIS): The WFDSA partners with national DSAs study the socio-economic impact of direct selling. The 2014 studies yielded data that enables the industry to demonstrate its social and economic value in meaningful terms to the governments and other key audiences in New Zealand and Australia: • Direct selling contributes NZD $226 million and the equivalent of more than 4,600 full-time jobs to the New Zealand economy annually. • The industry contributes AUD $1.1 billion and the equivalent of more than 12,000 full-time jobs to the Australian economy annually. • Direct selling provides opportunities for Australians and New Zealanders looking for flexibility, income and access to exclusive products. • As an alternative to traditional retail, the industry encourages workforce participation, competition, innovation and choice. • In both nations, independent direct sellers cite improved self-confidence and the opportunity to improve life and business skills as important social benefits of working in the industry. Global Women’s Economic Empowerment Initiative (GWEE): The WFDSA and its members believe that investing in women entrepreneurs and developing woman-owned micro-enterprises will help with the overall global economic recovery and reduce poverty and inequalities in the Asia Pacific Economic Cooperation (APEC) region and beyond. Leveraging the industry’s experience as a leader in microfinance, WFDSA and its members work with governments, women’s organizations, academia and other stakeholders to train and prepare women to succeed as microentrepreneurs to improve the economic status of their families. The first groups of women were to begin the GWEE six-week training course on basic business skills in late 2014. This is a multi-year effort funded by WFDSA and national Associations, implemented in partnership with the Indiana University Kelley School of Business Institute for International Business. The program is a true public-private partnership between APEC governments, women’s organizations, the direct selling industry and individual companies. All are committed to working together to improve women’s economic conditions. The program is based on the APEC Consumer Education and Protection (CEPI) Initiative model, is endorsed by the APEC Small & Medium Enterprises (SME) Ministerial in Singapore and aligns with the APEC SME Minister’s cutting-edge priority of developing micro-enterprises and investing in women. Direct Selling Association of South Africa - Academic Initiative: Students at the University of Johannesburg (UJ) and Durban University of Technology are learning practical personal selling and sales management experience in a major academic program developed by the South African Direct Selling Association, in partnership with UJ. The program, which supports South Africa’s National Skills Development framework, combines coursework with structured learning on the job, and enables students to gain practical selling experience and earn money by direct selling products while earning academic credit. The program is described as a world first for direct selling, and a model that can be replicated for other under-developed nations as well as other industries. France Academic Initiative: More than 100 university students, academics, journalists, company representatives and representatives from the Higher Education Ministry shared innovation, crosschannel distribution, value co-creation, digital marketing, salesforce performance and studies of potential issues facing direct selling at the French Direct Selling Association’s (FVD) second annual academic symposium in Paris. The symposium was organized in collaboration with Strasbourg Business School and Paris-East Créteil University. “As the European DSA, Seldia not only aims to advocate favorable regulation in the European Union (EU), we also want to educate our audiences about the many benefits of direct selling. They are social and economic and they benefit people of all walks of life without discrimination. We are particularly proud that more than three quarters of the 5.2 million people involved in direct selling in the EU are women. We are a growing business in Europe, even in difficult economic times, thanks to entrepreneurship, perseverance and high ethical standards.” Maurits Bruggink, Executive Director Seldia Russia Consumer Education Conference: A conference held in Moscow organized by the Russian Direct Selling Association and the International Confederation of Consumer Societies (CONFOP) drew praise for fostering constructive public-private dialogue that is resulting in solid outcomes and is making way for stronger consumer protection efforts. High-profile speakers from policy bodies addressed topics such as developing trends of consumer rights protection in Russia and global direct selling industry trends. The conference was conducted within the framework of the Asia-Pacific Economic Cooperation (APEC) Consumer Education and Protection Initiative (CEPI). “The WFDSA, as well as local [direct selling] associations constitute a well-developed infrastructure which aims to actively assist in the sphere of consumer rights protection. This results in positive resolution of consumer complaints in real terms and proves that it is quite easy for active consumers to successfully protect their rights. And we highly value such unique interaction.” Dmitry Yanin, Chairman of the International Confederation of Consumer Societies (CONFOP), Russia Association Services Committee The Association Services Committee’s purpose is to guide the national associations, improve their effectiveness and help them provide overall value to their member companies. 2013/2014 Activities Association Performance: The national associations provide a first line of defense in critical matters that affect the entire industry. WFDSA supports the associations by providing organized approaches to issues and concerns, working closely to continuously improve the value of the services they deliver to member companies and consumers. • Association reviews. Periodic performance reviews are conducted to support the national associations to continuously improve. Seminars were conducted in Asia, Europe and Latin America to facilitate associations’ preparation for performance reviews. The seminars focused on performance standards, Ethics Code recognition, online/ electronic transactions, marketspecific issues, social media, effective communication tools and exchange of best practices. • Performance criteria updated. WFDSA benchmarks the national associations’ operating and organizational characteristics to help their boards and staff continuously improve their associations’ effectiveness. The performance committee revised the Bronze, Silver and Gold association performance criteria in 2014 to better align global standards and added a Platinum standard to extend improvement achievement. • Mentoring provisional members. The committee designed a mentoring program that pairs “provisional” and Bronze level member associations with higherlevel associations to help them achieve minimum standards and full WFDSA membership. Africa Expansion Initiative: The South African Direct Selling Association is working to help expand the industry across the African continent, seeing its potential to help alleviate poverty, unemployment and develop skills. The Association is leading the effort to establish associations in other African nations. The Association Services Committee assists in the process. Global Research The Global Research Subcommittee works with local DSAs to gauge direct selling industry size and trends for governments, media, consumer groups and other key influencers. Annual industry statistics show retail sales and the number of participants, fluctuation from year-to-year and longer-term trending. Global Direct Selling 2013 Retail Sales Top 10 Global Markets Regional Sales Other, 23% Asia/Pacific, 43% United States 18% Russia, 2% 3% Malaysia, China, 15% e, 3% c Fran M % o, 5 c exi % rm Ge a ,5 ny Japan, 10% zil, 8% Americas 38% People of all ages and backgrounds succeed in direct selling. No specific levels of education, experience, financial resources or physical condition are required. Participants receive training and support from established companies. Africa/Middle East, 1% Bra Europe 18% Who are Direct Sellers? Korea, 8% They sell some of the world’s most sought-after brands of nutrition, beauty, home care, jewelry, clothing, home décor and other products; and energy, telecommunications, legal, financial planning, insurance and other services. Korea, 8% Regional Sales Top 10 Global Markets Regional Sales Top 10 Global Markets Published July 28, 2014. Not for use after May 31, 2015 Global Industry: $178,521 (US$ millions), Up 8.1% in Constant 2013 US$ Global Industry: $178,521 (US$ millions), Up 8.1% in Constant 2013 US$ 2013 Retail Sales (1) (1) 2013 Retail Sales Local Local Currency US$ Currency US$ (millions) (millions) Region/Country (millions) Region/Country % Sales Change % Sales Change (YOY) in Constant (YOY) in Constant 2013 US$ (2) (millions) 2013 US$ (2) 3‐Year 3‐Year CAGR CAGR (2010‐13) (2010‐13) Independent Independent (3) Contractors Contractors (3) Global na 178,521 8.1% 6.8% 96,257,679 Global na 178,521 8.1% 6.8% 96,257,679 93,333 93,366 na 8,068,120 na 103 na 3,145 3,039 1,284 386 1,132 12 175 4.8% 5.3% 11.3% 28.5% 13.7% 5.7% 7.9% 2,900,000 11,100,000 1,496,588 1,183,158 1,391,899 87,112 125,000 6.8% 6.7% 33.6% 4.2% ‐1.8% ‐1.9% 0.2% 4.6% ‐2.9% 31,786,761 240,000 17,589,158 104,689 789,158 24,689 16,800,000 6.7% 4.2% ‐1.9% 4.6% 31,786,761 17,589,158 789,158 16,800,000 Asia/Pacific Australia Asia/Pacific China Australia Hong Kong China India Hong Kong Indonesia Japan India Kazakhstan Indonesia Korea Japan Malaysia Kazakhstan New Zealand Korea Philippines Malaysia Singapore Taiwan New Zealand Thailand Philippines Vietnam Singapore Other Asia/Pacific Taiwan Thailand Africa/Middle East Vietnam Africa Morocco Other Asia/Pacific South Africa Other Africa Africa/Middle East Middle East Africa Israel Morocco Other Middle East South Africa Americas Other Africa North America Middle East Canada Israel United States Other Middle East Americas North America Canada United States (4) (5) (4) (4) (5) (4) (6) (6) (6) (6) (6) (6) (6) (6) (4) (6) (6) (6) (4) (6) (6) (6) na 1,490 na 169,433 1,490 3,978 169,433 68,859 3,978 11,743,800 1,747,000 68,859 62,000 11,743,800 15,841,093 1,747,000 14,680 62,000 283 15,841,093 49,000 14,680 510 93,333 283 93,366 49,000 8,068,120 510 na 6,948 na na na na 190 103 na 77,569 1,438 77,569 27,346 1,438 513 27,346 1,175 513 1,123 17,901 1,175 408 1,123 14,469 17,901 4,659 408 232 14,469 1,154 4,659 407 3,145 232 3,039 1,154 386 407 175 720 400 1,284 152 1,132 53 12 99 8.2% ‐2.3% 8.2% 23.3% ‐2.3% 18.6% 23.3% 20.0% 18.6% 12.0% ‐4.4% 20.0% 6.3% 12.0% 8.0% ‐4.4% 4.7% 6.3% 4.8% 8.0% 17.8% 4.7% 8.5% 4.8% 4.8% 5.3% 17.8% 28.5% 8.5% 7.9% 6.7% 17.0% 6.9% ‐7.7% 9.2% ‐5.0% ‐39.3% ‐9.0% 6.8% 33.6% 11.3% ‐1.8% 13.7% 0.2% 5.7% ‐2.9% 6.4% 1.9% 6.9% 49.0% 9.2% ‐39.3% 13.0% 6,948 na na na 2,080 190 32,670 na 68,049 400 34,689 152 2,019 53 32,670 99 6.7% 5.7% 17.0% 2.7% ‐7.7% ‐6.4% ‐5.0% 3.3% ‐9.0% na na 2,080 32,670 68,049 34,689 2,019 32,670 5.7% 2.7% ‐6.4% 3.3% Page 1 of 2 720 12.6% 2.3% 12.6% 41.0% 2.3% ‐3.7% 41.0% 11.7% ‐3.7% 15.0% ‐3.6% 11.7% 2.0% 15.0% 2.9% ‐3.6% 1.8% 2.0% 10.3% 2.9% 14.8% 1.8% 11.0% 6.4% 10.3% 1.9% 14.8% 49.0% 11.0% 13.0% 50,246,543 505,620 50,246,543 na 505,620 614,641 na 5,775,345 614,641 10,256,400 3,259,000 5,775,345 320,000 10,256,400 5,499,818 3,259,000 4,250,000 320,000 94,967 5,499,818 3,933,210 4,250,000 429,384 2,900,000 94,967 11,100,000 3,933,210 1,183,158 429,384 125,000 1,064,787 240,000 1,496,588 104,689 1,391,899 24,689 87,112 80,000 1,064,787 80,000 Region/Country South & Central America Argentina Bolivia Brazil Chile Colombia Ecuador Mexico Peru Uruguay Venezuela Central America/Caribbean Other South & Central America Europe Western Europe Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Other Western Europe Central & Eastern Europe Bulgaria Croatia Czech Republic Estonia Hungary Latvia Lithuania Poland Romania Russia Slovakia Slovenia Turkey Ukraine Other Central & Eastern Europe (4)(6) (6) (4) (6) (2) (6) (6) (4)(6) (4)(6) (6) (6) (7) (4)(6) (6) (4) (6) (6) (6) (6) (4)(6) (4) (4) (4)(6) (4)(6) (4) (6) 2013 Retail Sales (1) Local % Sales Change Currency US$ (YOY) in Constant (millions) (millions) 2013 US$ (2) na 33,360 9.1% 10,390 1,903 38.0% 2,351 340 18.0% 30,589 14,188 7.2% 259,783 525 8.0% 6,140,397 3,286 6.7% 870 870 8.5% 103,752 8,123 8.5% 5,033 1,863 5.7% 1,859 91 19.0% 16,000 1,391 15.0% na 755 2.0% na 25 9.0% na na 182 140 330 180 4,000 6,380 123 50 2,332 42 111 807 107 608 2,309 413 2,134 na na 121 269 5,974 30 56,468 29 314 2,775 1,068 137,936 110 18 1,337 5,801 na 31,620 23,280 242 186 59 239 5,312 8,473 164 66 3,097 55 147 137 142 807 355 446 3,334 19 8,340 83 47 305 40 252 39 121 878 321 4,333 146 24 702 726 322 2.9% 3.3% 0.0% 5.0% ‐8.3% 1.0% 3.9% 4.2% ‐3.8% ‐5.7% 1.2% 0.0% 8.6% ‐1.0% 4.0% ‐4.0% ‐2.6% ‐5.0% 6.7% 1.0% 1.8% 5.5% 3.0% ‐2.1% 3.9% ‐5.4% 6.7% 8.2% 4.7% 2.3% 2.7% 1.0% ‐8.0% 2.5% ‐4.8% 2.0% 3‐Year CAGR (2010‐13) 9.6% 28.1% 29.4% 8.6% 7.7% 11.6% 10.2% 6.5% 8.3% 12.5% 15.7% 8.1% 14.4% Independent Contractors (3) 14,197,603 700,000 306,512 4,504,001 347,856 2,342,422 944,000 2,135,694 449,302 77,903 1,417,950 946,893 25,070 3.6% 3.7% ‐3.0% 2.2% ‐1.9% 1.1% 3.4% 5.8% ‐9.0% ‐2.7% ‐1.2% 15.9% 5.2% 4.1% ‐1.4% ‐3.8% ‐4.2% ‐0.8% 10.4% ‐0.2% 3.5% 8.1% ‐23.3% ‐7.3% 20.5% 7.5% 10.3% 8.7% 6.8% 12.2% 3.3% 15.3% ‐1.2% 7.6% ‐1.6% 2.2% 12,727,787 2,898,430 14,728 18,100 32,830 79,638 534,672 376,415 270,331 21,000 521,642 2,700 53,057 99,000 107,900 202,008 112,969 12,250 420,000 19,190 9,829,356 117,208 33,630 246,506 34,388 473,725 45,563 101,358 900,008 292,561 5,042,778 145,000 23,000 863,475 1,187,836 322,320 ©Copyright WFDSA 2014 na = not available (1) Sales figures are expressed at Estimated Retail level and exclude Value Added Tax. Figures are based on the size of the entire industry, unless otherwise noted. (2) Sales figures for 2012 and 2013 are expressed in US Constant 2013 Dollars to exclude the impact of foreign exchange and ensure comparability. Average annual exchange rates from the International Monetary Fund have been used to convert data from local currency to US dollars. A notable exception is Venezuela, where the official SICAD exchange rate has been used. (3) The Direct Selling Independent Contractors include individuals who are career minded entrepreneurs building their own businesses … or part‐time entrepreneurs earning extra income. All enjoy significant discounts on products. In fact, some choose Direct Selling Independent Contractors 7.3% Direct Selling Independent Contractors 2010-2013 2012 50.2 2013 96.3 90.0 84.0 79.3 2012-2013 (USD Millions) 6.5% 31.8 5.9% 7.1% 7.0% 7.1% 12.7 2010 2011 2012 2013 More than 96 million people participated in direct selling in 2013, an increase of 7% over 2012. Three-fourths of the world’s markets experienced growth in the number of people participating in direct selling. Asia Pacific* Americas Europe *No figures are availble for China Reporting global regions saw growth of around 7% in the number of people participating in direct selling. 2013 Global Retail Sales Increased by 8.1% All regions, and three-fourths of direct selling countries, showed increases in retail sales in 2013. Global Retail Sales 2010-2013 (US Billions) Direct selling’s compound annual growth rate of 6.8% for the period 2010-2013 shows a strong growth trend. $178.5 $165.2 (2010-2013) $155.8 $146.6 CAGR 6.8% Central & Eastern Europe 6.3% 6.0% 8.1% Africa Mid-East 1% Western Europe 5% 2010 2011 2012 2013 Asia is the largest region for direct sales 43% 19% Sales Share by Region - 2013 Asia remains the largest market for direct selling, accounting for 43% of global retail sales. The Americas are the second largest region, accounting for 38% of global retail sales. The 11 markets in South and Central America command a 19% share of the global market, equal to the share of the entire North American market (US and Canada). Asia Pacific 13% South & Central America 19% North America Sales increased in all regions in 2013 Sales & Increases 2012-2013 (Constant US Billions) 2012 12.6% $77.6 5.7% Regional Compound Annual Growth Rates 2010-2013 (Constant USD Billions) 2013 CAGR 8.2% $68.0 2.9% $77.6 $31.6 2010 CAGR 6.7% 2011 2012 $68.0 2013 CAGR 3.6% Asia Pacific Americas $31.6 Europe Asia Pacific Americas Europe 23 countries account for 93% of global direct selling retail sales The top 23 countries are those reporting more than US$1 billion in annual direct selling retail sales 5 10 15 23 60% >75% >85% 93% 2013 RANK COUNTRY 2013 RETAIL SALES (2013 CONSTANT USD MILLIONS) 2013 % CHANGE (2013 CONSTANT USD) CAGR (2013 CONSTANT USD 2010-2013) 10.3INDEPENTENT CONTRACTORS (MILLIONS) 1 United States 32,670 3.3% 4.6% 16.8 2 China 27,346 41.0% 23.3% NA 3 Japan 17,901 3.6% 4.4% 3.3 4 South Korea 14,469 2.9% 8.0% 5.5 5 Brazil 14,188 7.2% 8.6% 4.5 6 Germany 8,473 4.2% 5.8% 0.4 7 Mexico 8,123 8.5% 6.5% 2.1 8 France 5,312 3.9% 3.4% 0.5 9 Malaysia 4,659 1.8% 4.7% 4.3 10 Russia 4,333 2.7% 3.3% 5.0 11 United Kingdom 3,334 6.7% 10.4% 0.4 12 Colombia 3,286 6.7% 11.6% 2.3 13 Taiwan 3,145 6.4% 4.8% 2.9 14 Italy 3,097 1.2% 1.2% 0.5 15 Thailand 3,039 1.9% 5.3% 11.1 16 Canada 2,019 6.4% 1.9% 0.8 17 Argentina 1,903 38.0% 28.1% 0.7 18 Peru 1,863 5.7% 8.3% 0.4 19 Australia 1,438 2.3% 2.3% 0.5 20 Venezuela 1,391 15.0% 15.7% 1.4 21 India 1,175 11.7% 20.0% 5.8 22 Philippines 1,123 14.8% 17.8% 3.9 23 Indonesia 1,122 15.0% 12.0% 10.9 178,512 8.1% 6.7% 96.3 GLOBAL TOTAL Top Markets Rest of the World United States 46% of direct selling retail sales in 2013 came from emerging markets, an increase of 7% since 2010. Emerging markets as a group have seen a compound annual growth rate of 13% for the period 2010-2013. 7% 18% Russia 2% Malaysia 3% 15% 39% 3% France 5% Mexico China Advanced vs. Emerging Market Sales as % of Total Global Sales 2010 2011 2012 2013 10% 5% 8% Germany Brazil 8% 61% 59% 58% 54% 41% 42% 46% Japan Korea CAGR of TOP 5 Markets #1 US 4.6% #2 China 23.3% #3 Japan -4.4% #4 Korea 8.0% #5 Brazil 8.6% 0% 20% 40% AdvancedEmerging 60% 80% 100% Direct Selling is empowering people in Emerging nations 2013 Population Split 2013 GDP Split 2013 Direct Sales Split 15% 85% AdvancedEmerging 39% 61% 46% 54% Socioeconomic Impact of Direct Selling Direct sellers and companies they represent support the service economy everywhere they operate. We use hotels, restaurants, transportation, travel-related services and various professional services including legal counsel, communications and advertisting support. Direct selling organizations innovate, develop and manufacture quality products. Globally, this generates billions of dollars in incremental revenue and tax payments, while providing employment for thousands of people. Following are regional case studies in brief - United States Size Direct selling is a PEOPLE business. • In 2013 direct selling in the US generated US$32.7 billion in estimated retail sales, up 3.3% and an industry record. • The US is the world’s largest direct selling market. • There were 16.8 million independent sales representatives in the US in 2013, up 5.7% from the previous year and an industry record. • Three-quarters of them are women. That’s 12 million women who appreciate the direct selling opportunity for the flexibility to set their own schedules and raise their families. According to the USDSA National Sales Force Survey - 2013, these independent contractors provide over 60 million repeat retail customers with knowledgeable, personal service. Two out of three direct sellers used the products themselves before ever becoming a company representative. 12,744 4,088 11,204 32% administration and other 11% in Information Technology • More than 2,200 (4% of the employee total) science professionals who are leading chemists, biologists, engineers and more. 21% in Sales & Customer Service • More than 53,000 people in the US alone who are experts in their fields – and serve as resources to help independent representatives grow their businesses. 8% in Advertising, Marketing, PR • These 16.8 million US independent sales representatives are in business FOR themselves, but not BY themselves. The 170 USDSA member companies they represent employ: 24% in Manufacturing and Quality Assurance Employees/Experts 5,841 16,036 Direct Selling Supply Chain 90% More than 90% of USDSA member companies have head offices in the US 30% 40% 78% 1/3 have innovation and testing laboratories in the US 40% have manufacturing plants in the US Nearly 80% have distribution centers in the US Colombia Size • In 2013, the independent sales force size was over 2.3 million, up nearly 15% • 84% of these are women … that’s nearly 2 million female entrepreneurs with independent direct selling businesses of their own. • In 2013, direct sales in Colombia reached USD 3.3 billion, up 6.7% year-over-year, and a record for that country. • Colombia is the world’s 12th largest direct selling market. • A double digit Compound Annual Growth Rate shows solid sustainable growth at 11.6% Supply Chain •D irect selling tends to be a local industry, fostering entrepreneurial start-up companies. For instance about 40% of direct selling association member companies in Colombia are Colombian companies. • Beyond that, more than 50% of member companies have head offices in-country. • Another plus: Direct selling has brought in foreign investment: 15% of member companies manufacture in Colombia, and a full ¾ have distribution and warehousing there. 4,480 3,780 3,500 1,120 700 420 Administration and Other Information Technology Sales & Customer Service Advertising, Marketing and PR These companies employ some 14,000 people in the fields of: Manufacturing and Quality Assurance The independent salespeople in Colombia represent the country’s 32 national association member companies. … Research & Development Employees/Experts 5% 27% 8% 32% 3% 25% France Size • France is the world’s 8th largest direct selling market. • In 2013, direct sales in France reached USD 5.3 billion, up 3.9% year-over-year, and a record size for that country. • The independent sales force size was 535,000, up nearly 3% • A total of 82% of these are female entrepreneurs with independent direct selling businesses of their own. • The compound annual growth rate of direct selling in France 20102013 was 3.4% for the period – considered steady growth for a mature industry in an advanced market. Employees/ Experts The independent salespeople in France represent the nation’s DSA member companies. These companies employ close to 6,000 people. Of these: he r ot n tio n an d Te ch n st o Cu & m ini s tra at io les Sa in % 10 % in In f ad m or in 23 % olo gy er S m an ing ar ke t ing ,M tis ve r Ad in 8% 3,000 er v PR d an ce As su r lity Qu a an d g rin fa ct u an u M 600 ice t en De ve lop m 420 & se ar ch Re in 2% in 7% 1,380 480 50 120 Russia Size • Russia is the world’s 10th largest direct selling market. These companies employ some 6,300 people … 0.9% in Research & Development • To service the vast Russian territory, 44% of member company staff are in Sales and Customer Service, and all member companies have distribution centers in the country. 58 1,008 504 2,772 378 25% administration and other • 70% of member companies have national head offices in Russia member companies … 6% in Information Technology Supply Chain The independent salespeople in Russia represent the nation’s 17 direct selling association 44% in Sales & Customer Service • Nearly 90% or 4.5 million of these are women. Employees/Experts 8% in Advertising, Marketing, PR • Yet the number of independent direct sellers showed a 17% increase to over 5 million … a forward indicator of greater sales to come. 16% in Manufacturing and Quality Assurance • Russian 2013 direct sales were in excess of USD 4.3 billion, up 2.7% year-over-year, showing a Compound Annual Growth Rate of 3.3% (2010-2013) 1,575 South Africa Employees/ Experts Size The independent salespeople in South Africa represent the 37 national association member companies employing some 2,900 people: • In 2013, South Africa’s direct selling retail sales were up 6.7% to USD $720 million, with a compound annual growth rate of 6.8% duing the period 2010-2013. • The direct selling sales force grew by 5.3% to 1.1 million independent sales representatives. • Just over 80% of these are women. Supply Chain • All Direct Selling Association member companies have national head offices in South Africa. • More than 20% of member companies have manufacturing facilities in South Africa and nearly half have distribution centers. olo g y 870 he r Te c n ot at io st ra in tio n In an d fo rm & Sa les ini ad m in % 24 87 hn er S m to Cu s ar ke t ,M ing rti s Ad ve 30 % in 6% in er vic e PR ing As su r lity Qu a an d g rin fa ct u an u M in 36 % an d an ce De ve lop m & ar ch Re se in 1% 0. 696 174 1,030 3% en t NA Malaysia Size • Malaysia is the world’s 9th largest country for direct selling. • Direct retail sales in this developing market reached USD 4.7 billion in 2013, up 1.8% vs. 2012. 1,716 • Compound Annual Growth Rate in Malaysia is 4.7% (2010-2013). • 2013 Sales force numbers were down 10.5% to 4.3 million. 1,320 • 62% of Malaysian direct sellers are women. Supply Chain • Over 1 in 4 DSA member companies have manufacturing plants in Malaysia. 836 • Member companies operate 220 distribution centers / warehousing facilities to service Malaysian customers. Employees/ Experts The 65 DSA member companies of Malaysia employ 4,400 people: 176 220 132 Administration and Other Information Technology Sales & Customer Service Advertising, Marketing and PR Manufacturing and Quality Assurance Research & Development 4% 3% 19% 30% 5% 39% Turkey • The country achieved CAGR 2010-2013 of 7.6%. Supply Chain Just 1 of the 10 Turkish DSA members is a Turkey-based company. For the others, the communications, customer service and IT functions are supported by direct selling company regional infrastructure in other countries. In this, Turkey provides a strong example of the interdependence of nations and how direct selling helps attract direct foreign investment to a market. 5% administration and other • Retail sales rose to USD 702 million in 2013. This figure was up 2.5% year-over-year. 5% in Information Technology • 82% of these are women. That’s 742 million female entrepreneurs. The Turkish DSA has 10 member companies, employing 861 employees. 40% in Sales & Customer Service • Turkey’s 863,000 direct sales people, increased in numbers by 4.2% in 2013. Employees/ Experts 50% in Advertising, Marketing, PR Size 430 345 43 43 Global Regulatory Affairs Committee The Global Regulatory Affairs Committee protects the direct selling opportunity by providing proactive, strategic and tactical government and regulatory affairs support to the national associations. The Committee facilitates global information sharing by developing best practices that are proactive and shared through education and training, and by providing consulting and advocacy assistance, when appropriate. The Committee encourages member companies to visibly promote good causes, conducts fundamental regulatory training for member companies and creates position papers on behalf of the global industry. 2013-2014 Activities Government Relations Toolkit: The Committee produced a Government Relations Toolkit in 2014, including a Government Relations Handbook, to help the national associations’ government relations personnel in several countries and regions to better understand the legislative processes. The kit presents the fundamentals of developing and executing a government affairs strategy, ethics considerations and an issues overview. India regulatory climate: The WFDSA and Indian Direct Selling Association (IDSA), in partnership with Federation of Indian Chambers of Commerce and Industry (FICCI), continue to work toward a clear direct selling regulatory framework for the benefit of consumers in India. A 2014 forum brought together high-level experts including academics, chamber representatives, consumer activists, police and direct selling company CEOs to discuss solutions and advance the country’s regulatory framework. “The FICCI stands by WFDSA’s backing for direct selling through advocating the industry’s positions and interest with governments, media and key influencers. We are looking forward to work in close association with WFDSA in areas of self-regulation, consumer affairs and regulatory affairs related to [direct selling] industry.” Shilpa Gupta, Head of Retail, FMCG & Gems and Jewellery Committee, Federation of Indian Chambers of Commerce and Industry Acknowledgements WFDSA CEO Council 4Life Research, LLC, Mr. Steven Tew, CEO Amway Corporation, Mr. Douglas DeVos, President Arbonne International, Inc., Ms. Kay Napier, CEO Avon Products, Inc., Ms. Sheri McCoy, CEO Best World International Ltd., Dr. Dora Hoan, Founder, Co-Chairman and Group CEO Best World International Ltd., Dr. Doreen Tan, Founder, Co-Chairman and President Herbalife International of America, Inc., Mr. Michael Johnson, CEO Infinitus (Hong Kong) Company Limited, Mr. Sammy Lee, Chairman Infinitus (Hong Kong) Company Limited, Mr. Harry Yeung, COO Jafra Cosmetics International, Inc., Mr. Mauro Schnaidman, CEO LifeVantage, Mr. Douglas Robinson, President and CEO LR Health & Beauty Systems, Mr. Jens Abend, CEO Mary Kay Inc., Mr. David Holl, President and CEO Natura Cosmeticos S.A., Mr. Alessandro Carlucci, CEO Nature’s Sunshine, Mr. Greg Probert, Chairman and CEO Nu Skin Enterprises, Mr. Truman Hunt, CEO Oriflame Cosmetics, Mr. Magnus Brännström, CEO Oriflame Cosmetics, Mr. Robert af Jochnick, Founder & Chairman Perfect (China) Co. Ltd., Mr. SL Woo, CEO Rodan + Fields Dermatologists, Ms. Lori Bush, CEO Scentsy, Inc., Mr. Orville Thompson, CEO Shaklee Corporation, Mr. Roger Barnett, Chairman and CEO Morinda Inc., Mr. John Wadsworth, CEO The Pampered Chef, Mrs. Doris Christopher, Founder, Chairman, and Interim CEO Tianshi Health Products, Mr. Jinyuan Li, CEO Yanbal International, Ms. Janine Belmont, CEO Ulrich Justrich Ltd., Mr. Marcel Justrich, CEO USANA Health Sciences, Inc., Mr. David Wentz, President WFDSA Member Countries and Board of Delegates Argentina Mr. Wilder Yasci Camara Argentina De Venta Directa (CAVEDI) Web Site: www.cavedi.org.ar Australia Mr. John Holloway Direct Selling Association of Australia Web Site: www.dsaa.asn.au Austria Mr. Stefan Mumelter Arbeitsgruppe Direktvertrieb Zu Hause Beraten gut Gekauft’ Handelsverband Web Site: www.handelsverband.at Belgium The European Direct Selling Association (Seldia) Web Site: www.seldia.eu Bolivia Ms. Marisol Ardaya Duran Bolivian Direct Selling Association ASOEM Web Site: www.asoem.org.bo Brazil Mr. Marcelo Behar Associacao Brasileira de Empresas de Vendas Diretas (ABEVD) Web Site: www.abevd.org.br Canada Mr. Ken Mulhall Direct Sellers Association of Canada Web Site: www.dsa.ca Chile Mr. Pedro Moreno Camara de Venta Directa de Chile, A.G. Web Site: www.camaraventadirecta. cl/ China Ms. Louisa Lui DSA of Hong Kong, Ltd. Web Site: www.hkdsa.org.hk Chinese Taipei Ms. Charlene Chiang Web Site: www.dsa.org.tw Colombia Mr. Miguel Arismendi DSA of Colombia-ACOVEDI Web Site: www.acovedi.org.co Costa Rica Mr. Wilbert Rosales Gomez Camara Costarricense De Empresas De Venta Directa (DSA of Costa Rica) Croatia Ms. Hedi Kovacs Direct Selling Association of Croatia (Hrvatska Udruga Direktne Prodaje) Web Site: www.hudp.hr/ Czech Republic Ildiko Kikosova Direct Selling Association of the Czech Republic Asociace Osobní¬ho prodeje (AOP) Web Site: www.osobniprodej.cz/ Denmark Ms. Mette Henius Direkte Salgs Foreningen (DSF) Web Site: www.disafo.dk Dominican Republic Mr. Ruben D Familia Asociacion Dominicana De Empresas De Ventas Directas Web Site: www.adeve.com.do Ecuador Mr. Mario Galarraga Asociacion De Venta Directa Del Ecuador Web Site: www.aevd.ec El Salvador Mr. Eduardo Castro Directorio Asociacion Salvandorena De Venta Directa Web Site: www.asvd.org.sv Finland Ms. Rakel Lassila (Suomen Asiakkuusmarkkinointiliitto ry) Finnish Direct Marketing Association Web Site: www.asml.fi France Mr. Jacques Cosnefroy FEDERATION DE LA VENTE DIRECTE Web Site: www.fvd.fr Germany Mr. Jochen Clausnitzer Bundesverband Direktvertrieb Deutschland E.V. Web Site: www.bundesverbanddirektvertrieb.de Guatemala Mr. Francisco Hernandez Asociacion Guatemalteca De Ventas Directas Web Site: www.agevd.org Honduras Mr. Mario Hernandez Asociacion Hondurena De Empresas De Venta Directa Web Site: www.ahvd.org Hungary Ms. Edit Tanczos Direct Selling Association of Hungary Web Site: www.dsa.hu India Ms. Chavi Hemanth Indian Direct Selling Association Web Site: www.idsa.co.in Indonesia Mr. Djoko H. Komara Indonesian Direct Selling Association Web Site: www.apli.or.id Ireland Ms. Lynda Mills The Direct Selling Association of Ireland Web Site: www.dsai.ie WFDSA Member Countries and Board of Delegates (continued) Israel Mr. Oved Levi Direct Selling Association of Israel Web Site: www.dsa.org.il Malaysia Mr. Fredrick Ng Chee On Direct Selling Association-Malaysia Web Site: www.dsam.org.my Mr. Hans Werner Peruvian Chamber of Direct Selling CAPEVEDI Web Site: www.capevedi.com Italy Mr. Giuliano Sciortino Direct Selling Association Italy AVEDISCO Web Site: www.avedisco.it Mexico Ms. Ocativo Moreno Asociacion Mexicana de Ventas Directas Web Site www.amvd.org.mx Philippines Mr. Josefino Sarmiento Direct Selling Association of the Philippines Web Site: www.dsap.ph Japan Mr. Hideaki Itou Japan Direct Selling Association Web Site: www.jdsa.or.jp Netherlands Ms. Sindy Staessen Vereniging Directe Verkoop Web Site: www.directeverkoop.nl Poland Mr. Jaroslaw Mulewicz Direct Selling Association of Poland Web Site: www.pssb.org.pl Estonia, Lithuania, Latvia Mr. Gintautas Zaleckas Estonian Direct Selling Association Web Site: www.edsa.ee New Zealand Mr. Garth Wyllie Direct Selling Association of New Zealand Inc. Web Site: www.dsanz.co.nz Portugal Ms. Gee Soares Instituto Portugues De Venda Directa (IPVD) - Portuguese DSA Web Site: www.ipvd.pt Norway Mr. Jan Fredrik Torgersen Direktesalgsforbundet Web Site: www. direktesalgsforbundet.no/ Romania Mr. Razvan Diratian Association of Direct Sales Companies of Romania (ACVD) Web Site: www.acvd.ro/ Lithuanian Direct Selling Association) Web Site: www.ltpa.lt Direct Selling Association of Latvia WebSite: www.tta.lv Panama Ms. Mariela Delvalle Direct Selling Association of Panama Web Site: http://apavedi.org Peru Seldia Mr. Magnus Brannstrom www.seldia.eu Russian Federation Ms. Tamara Shokareva Direct Selling Association of Russia Web Site: www.rdsa.ru Singapore Mr. Leo Boon Wang Direct Selling Association of Singapore Web Site: www.dsas.org.sg Slovakia Ms. Jana Darulova Slovakia Direct Selling Association Web Site: www.zpp.sk Slovenia Nenad Bondzic Direct Selling Association of Slovenia Web Site: www.dsa.si/index.html South Africa Mr. Ernest du Toit Direct Selling Association of South Africa Web Site: www.dsasa.co.za South Korea Mr. Won Kyung Eo South Korea Direct Selling Association Web Site: www.kdsa.or.kr Spain Mr. Agustin Roque Asociacion de Empresas de Venta Directa Web Site: www.avd.es Sweden Mr. Anders Berglund Direkthandelns Forening Web Site: www.direkthandeln.org Switzerland Mr. Marcel Justrich Verband der Direktverkaufsfirmen Web Site: www.svdf.ch Thailand Ms. Pakapun Leevutnun Thai Direct Selling Association Web Site: www.tdsa.org Turkey Ms. Candan Corbacioglu Dogrudan Satis Dernegi (DSA of Turkey) Web Site: www.dsd.org.tr Ukraine Mr. Tomasz Muras Ukrainian Direct Selling Association Web Site: www.udsa.org.ua United Kingdom Ms. Lynda Mills The Direct Selling Association Ltd. Web Site www.dsa.org.uk United States Mr. Rich Hartvigsen U.S. Direct Selling Association Web Site: www.dsa.org Uruguay Ms. Magali Arreseigor Camara De Empresas De Servicio Directo Web Site: www.cuvedi.org.uy/ Venezuela Ms. Maria Consuelo Morantes Direct Selling Association of Venezuela --CEVEDIR Web Site: www.cevedir.org.ve/Inicio.html WFDSA Operating Group Governance and Finance Committee WFDSA Executive Director Tamuna Gabilaia Tamuna Gabilaia WFDSA Executive Director Chairman Alessandro Carlucci, CEO, Natura Cosmeticos S.A. Moacir Salzstein Natura Cosmeticos, S.A. Vice Chairman Magnus Brännström, CEO, Oriflame Cosmetics Vice Chairman Sheri McCoy, CEO, Avon Products, Inc. Treasurer Doug DeVos, President, Amway Corporation Assistant Treasurer Moacir Salzstein, Natura Cosmeticos S.A. Secretary Truman Hunt, CEO, NuSkin Enterprises Advocacy Committee Chairman Kim Drabik, Amway Corporation Association Services Chairman Dora Hoan, Best World Life International Ltd. Ethics Committee Chairman Joseph Mariano, United States Direct Selling Association Global Regulatory Affairs Committee Nathan Moore, Mary Kay Inc. Miguel Arismendi Amway Corporation Kim Drabik Amway Corporation Josephine Mills Avon Products, Inc. Association Advisory Council Asia Pacific Melisa Quijano, Nu Skin Enterprises Martin Liou, Amway Corporation Latin America Daniel Serra, Natura Cosmeticos, S.A. Miguel Arismendi, Amway Corporation Europe Imelda Vital, Amway Corporation Michaela Beltcheva, Oriflame Cosmetics North America Ryan Nelson, Melaleuca US Raymond Patrick, Mary Kay Canada