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Mark-e-Dir: Bringing Market to Consumers Wednesday, 17 th April, 2013 New Delhi

Panel Discussion on International Regulation John Holloway, Executive Director, Direct Selling Association of Australia. Mark-e-Dir: Bringing Market to Consumers Wednesday, 17 th April, 2013 New Delhi. Direct Selling – An Australian Perspective

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Mark-e-Dir: Bringing Market to Consumers Wednesday, 17 th April, 2013 New Delhi

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  1. Panel Discussion on International RegulationJohn Holloway, Executive Director, Direct Selling Association of Australia Mark-e-Dir: Bringing Market to Consumers Wednesday, 17th April, 2013 New Delhi

  2. Direct Selling – An Australian Perspective Direct Selling is an economically and socially accepted channel for retailing consumer products Business models are changing and little understood or conveniently stereotyped by key stakeholders Australia’s regulation of direct selling has pronounced strengths and weaknesses.

  3. Direct Selling is a socially and economically accepted channel for retailing consumer products • 400,000 Australians engaged in distributing member products • Technology and consumer behaviour enhance direct selling’s relationship and experiential selling strengths • Social connect is a key driver for distributor engagement • True size of Australia’s direct selling market is not known • DSAA members report $1.4 billion in annual sales • Australian market relatively world competitive

  4. Sales 2011 USD Billion 10 15 20 25 30 5 Source: WFDSA

  5. Distributors 2011 5 Million 10 Million 15 Million Source: WFDSA

  6. Participation Rates 2011 Source: WFDSA, DSAA

  7. Per Capita Sales 2011 Source: WFDSA, DSAA

  8. Direct Selling is a socially and economically accepted channel for retailing consumer products • 400,000 Australians engaged in distributing member products • Technology and consumer behaviour enhance direct selling’s relationship and experiential selling strengths • Social connect is a key driver for distributor engagement • True size of Australia’s direct selling market is not known • DSAA members report $1.4 billion in annual sales • Australian market relatively world competitive • Relatively low cost structure makes direct selling an attractive retail option • Small business kindergarten

  9. Business models are changing and little understood or conveniently stereotyped by some stakeholders • Direct selling is increasingly multi channel

  10. “Direct Selling” – selling a consumer product or service, person-to-person, away from a fixed retail location, usually in a home or workplace Agency Model Wholesale Model DSO Consumer Group Purchaser Seller Seller/Business Builder Business Builder Direct Seller Independent Contractor CONSUMER

  11. Direct Selling Organisation Direct Seller Door-to-Door CONSUMER

  12. Direct Selling Organisation Distance Selling Direct Seller Door-to-Door Store Selling CONSUMER

  13. Business models are changing and little understood or conveniently stereotyped by some stakeholders • Direct selling is increasingly multi channel • Growing awareness by policy makers • Some interests argue the best way to overcome relatively small consumer detriment is to restrict retailing to store selling

  14. Australia’s regulation of direct selling has pronounced strengths and weaknesses • Prior to the Australian Consumer Law (ACL) direct selling was regulated by a patchwork of Federal, State and Territory law. • DSAA membership assures distributors and consumers of ethical trading behaviour

  15. Sets out transactional requirements for members and distributors, product guarantees and representations • Regulates certain behaviour between members and between members and their distributors, including • Entry Costs • Inventory Management • Buy-back • Marketing Plans

  16. Australia’s regulation of direct selling has pronounced strengths and weaknesses • Prior to the Australian Consumer Law (ACL) direct selling was regulated by a patchwork of Federal, State and Territory law. • DSAA membership assures distributors and consumers of ethical trading behaviour • ACL, singular consumer protection and fair trading law for all Australia, commenced January 2011 . Co-operative venture between nine governments recognising the social and economic benefits of the reform. Policy and administration underpinned by an inter-governmental agreement. Details at www.consumer law.gov.au • ACL’s regulation of unsolicited (direct) selling is problematic. DSAA achieved concessions, but a fresh regulatory approach is needed to capture the consumer protection and business certainty challenges in the non-store retail environment.

  17. Thank You For Your Time

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