The South African Direct Selling sector is proving to be a critical succor for multitudes of people who are trying to make ends meet within an economy haunted by stubbornly high unemployment levels.
In 2012 close to a million people joined the Direct Selling sector and participated in the generation of R7.6 billion of sales. This is a significant figure considering that South Africa runs on a 25% unemployment rate which translates to 4.3 million people. Youth unemployment is estimated to be more than 50%.
The Direct Selling Association (DSA), a national business association founded in 1972, released its latest industry results this week. The numbers show 960 000 people joining the industry in 2012. However 940 000 people left the industry. This means the industry a net gain of 20 000 independent direct sellers from 2011 to 2012.
DSA chairman Richard Clarke said “Although there are a high number of people leaving this industry, this supports the rest of the economy because they can use the skills they’ve learned in this industry elsewhere.”
The DSA numbers also showed that total sales in South Africa increased from R7.152 billion in 2011 to R7.625 billion in 2012 and export sales increased from R657 million to R1.154 billion in 2012. This represents a total sales growth of 12.4%.
Clarke said the direct selling industry provides income opportunities to 1,378 million people. The industry consists of 86% females and 14% males.
Direct sellers earned R3,769 billion in 2012 which is an increase of 13.2% from 2011. Total value in product sales in 2010 amounted to over R7-4-billion, 16.9% growth over 2009. This compared favourably to the global picture which reflected 8.8% sales increase to $153.7 billion in 2012 from $141.2 billion in 2011.
Clarke said “The most fundamental aspect of our business is that we get people to recruit other people to join the industry. Recruitment is one of the most fundamental functions of any business and we continue to grow because this is our main focus.”
The DSA said it has recognised the need to develop Direct Sellers at university level and this led to the The DSA – University of Johannesburg Africa Development Plan which now in its 12th year at UJ and 7th year at the Durban University of Technology. 12,500 students have been put through the programme from 2002 – 2012 and students have made over R8 million in earnings and bursaries to the value of R500 000.
The DSA said the success of the direct selling industry in South Africa is based on the industry’s open-door approach that offers low barriers to entry, the reassurance of a sheltered, mentored learning environment, and a virtually risk-free earning opportunity to people of all ages, all races and from all economic and educational backgrounds, making it a perfect recipe for South Africa’s fight against unemployment.
The direct selling industry has a track record of being one of the highest job-creation industries in the South African economy. Offering a “soft landing” for people entering the industry, the direct selling business model provides the requisite knowledge, skills, learning, management, processes and systems that have been proven over time, and are backed by relevant market research, advertising and promotional programmes already in place. The capital investment required to start up is minimal, relative to the benefits that can be achieved.
The DS added that job creation, skills development and social upliftment are vital elements of much needed economic growth in our country, and it is these three keywords that are synonymous with direct selling in South Africa.