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Published on March 10, 2008

More people are becoming interested in working as independent sales representatives of direct-sales companies in these times of economic slowdown and political uncertainty.

Following this popular trend, direct-selling companies have launched promotions and marketing campaigns to attract more members. The move forms part of their business plans to boost sales growth by between 10 per cent and 30 per cent this year.

Nu Skin Enterprises Thailand, a major player in the direct-sales market specialising in personal-care products and food supplements from the United States, announced its business strategy early this year, with the slogan, "The difference demonstrated". That means the company will focus upon where it is already strong - health and beauty products and nutrition - in line its parent's policy.

At the same time, it is taking the opportunity to release very attractive incentives with three travel programmes: a Baltic cruise trip, a convention in the US, and a Shanghai trip.

Creating more attractive incentives is not only aimed at stimulating its current 230,000 members to work harder, but also to attract newcomers. The number of new members last year rose significantly by 30 per cent from the usual annual increase of 10 per cent.

"The continued economic slowdown and political uncertainty is one of the major factors that have convinced more people to become independent sales representatives of direct-sales companies. They want to secure their financial stability and gain more income at the same time," said Pakapun Leevutinun, general manager of Nu Skin Enterprises (Thailand).

Meanwhile, Amway (Thailand), the leader in the industry, announced it would implement a three-step strategic plan - consumer focus, performance-driven attitude and applications of innovation into products and services - as well as strengthen its four business strengths of a world-class company, products, business plan and social contributions.

Having 440,000 consumer members and 300,000 independent sales representatives - and with new members reaching 25,000 people every month - the company hopes to achieve sales of Bt20 billion in 2012.

Synergy Worldwide Marketing (Thailand), a subsidiary of a newer player from the US, has identified the Thai market as its centre to expand business in Asia after seeing movement in the industry over the three years it has been involved. The company specialises in food supplements, skincare and personal-care products and has 90,000 members.

The company said it would focus on creating strong brand position-ing and awareness, increasing membership and forming a training system.

Meanwhile, watching the success of the Thai direct-selling industry, major conglomerate Loxley eagerly joined the fray and announced that it would climb into the top five players within five years. Its main products are beauty care, skincare, healthcare and household products.

Loxley had a good 2007, gaining 100,000 members: 40 per cent are consumer members and the remainder independent sales representatives. It expects another 100,000 members with Bt300 million this year.

"More major companies in other businesses are expected to jump into the direct-sales pool. They have kept a close watch for a while," said Supachart Ankasuwansiri, general manager of Synergy Worldwide Marketing. He has provided consultancy services to these potential players, but declined to reveal their names.

The local direct-sales industry has achieved growth of 5 to 7 per cent throughout the past few years. Last year, its value was Bt40 billion. This year, with a better economic outlook, the industry is expected to reach 10-per-cent growth.

What makes the industry attractive to many consumers is that people can sell products during their free time. All direct-sales companies have precise business plans which members can easily follow, along with a wide variety of products. They do not, therefore, have to start everything from scratch by themselves.

Another reason is that the industry has continually gained a better image. Amway president Preecha Prakobkit said consumers now understood the industry more. Moreover, the government's understanding of the industry has resulted in closer work with major associations and specific laws to ensure transparency.

Citing the World Federation of Direct Selling Associations' research, Supachart from Synergy said the overall value of global direct sales industry was more than US$100 billion (Bt3.1 trillion), of which 87 per cent was contributed by 15 countries, including Thailand.

Meanwhile, the Kingdom has 400 direct-sales companies registered with the Office of the Consumer Protection Board, of which 200 are active. One hundred have world-class products and 20 have their own factories.

However, this does not mean that all direct-sales companies in Thailand succeed.

According to a Nu Skin survey, products that promise health and beauty benefits and companies that educate consumers and offer a good operation system and revenue compensation plan are the main concern of consumers.

Meanwhile, direct-sales companies focus on product variety and more marketing activities to constantly create demand.

Nu Skin has a Nu Skin University to train its independent sales representatives, while Synergy Worldwide is planning to set up a Synergy Academy this month.

Loxley has its own training programme, and Amway has a training system that gradually moves down from executive levels to new members.

Amway's Preecha said the company wanted to focus on building a strong operating system among networks in order to increase renewal of memberships, and does not expect to keep attracting a huge number of new members.

Having a strong network with a good reputation is one key to attracting newcomers. Amway and Nu Skin have already gained a very strong reputation as leaders, while Loxley is hoping its current strong retail and wholesale network that has been gradually established throughout the past 30 years will build its direct-sales reputation.

"Being a giant company doesn't always mean that you will win," Preecha said. "A direct-sales business requires scientific thinking more than art."

Nitida Aswanipont

The Nation