Direct selling businesses see 14% growth as unemployment bites

Published by rudy Date posted on June 18, 2010

CEBU CITY — Direct selling companies face bright growth prospects this year, as unemployment worsens and more employed workers look for additional income to cope with the difficult times.

The Direct Selling Association of the Philippines (DSAP), which counts 26 companies as members, has projected its combined sales to reach P25 billion this year, an increase of about 14% over last year’s, said DSAP director and Tupperware Brands Philippines President Perry C. Mogar.

He added that the group, which counts over 2.2 million distributors nationwide as of this year, also expects dealerships to grow.

“If unemployment is high, which it is, direct selling thrives. Underemployment is also high. What we’re doing now is making people aware of opportunities to earn more,” Mr. Mogar said, referring to the group’s livelihood caravan.

Unemployment worsened to a two-year high of 8% in April this year, while underemployment remains high at 17.8%. The underemployed are defined as those who have jobs but want to have additional work.

Amid the bright prospects for the industry, the group is pushing for legislation regulating direct, or person-to-person, selling and multilevel marketing operations, noting that the Philippines remains the only country in Southeast Asia without such a law.

Ador Bonquin, DSAP chairman and Amway Philippines country manager, said the group hopes to partner before the end of this year with some legislators who will push for the passage of a draft direct selling law.

“We have prepared a draft and we are reviewing it now. We looked at direct selling laws in Asia and selected provisions that are applicable in the Philippines,” Mr. Bonquin said.

Direct selling operations in the country are currently covered by Republic Act No. 7394, or The Consumer Act of the Philippines, which Mr. Bonquin said lacks provisions pertaining to direct selling. “A direct selling law would enhance the Consumer Act, ensure that the consumers are protected, guard against inferior products and prevent pyramiding. It wouldn’t be so easy for direct sellers to get a license to operate if we have this law,” he said.

Mr. Bonquin said there are at least 150 direct selling ventures in the Philippines today, some of which are fly-by-night operations. DSAP has been helping the Trade department and the Securities and Exchange Commission pin down these illegal businesses by conducting its own investigation. Mr. Bonquin said the group has also helped the National Bureau of Investigation in its entrapment operations against erring direct sellers.

DSAP is waging a campaign to promote legitimate direct selling and multilevel marketing through its livelihood caravan dubbed “Lakbay Hanapbuhay.” The caravan, which was launched last year in Cagayan de Oro City, is currently in Cebu. — Marites S. Villamor, Businessworld

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