Direct selling still lives amid new retail modes

CEBU, Philippines — Amid the introduction of different retail avenues including eCommerce or online selling, direct selling continues to thrive and is seen to stay in business for much longer.

Direct selling company Avon Philippines made this statement as the market is now flooded with multi-faceted retail options add to that the entry of cheaper imported goods.

Avon Philippines general manager Razvan Diratian said the referral system in retail business is still deeply embedded in the Filipino culture, and this is going to sustain and even grow the direct selling concept here.

"Filipinos trust what their families and friends say when buying products. Avon [for instance has become a business in the family. Some of our representatives, who are mothers, have passed them on to their children," explained Diratian.

Because Avon has been part of Filipino family stories for 40 years, it is hard for the new selling concepts to affect its stability and even growth.

In general, he said direct selling has been proven to have worked even in developed countries, much more in developing countries like the Philippines.

The Philippines is Avon’s top fourth market in the world and is a market leader in Asia Pacific.

Based on the latest Euromonitor report on direct selling industry in the Philippines, the direct selling giant Avon Cosmetics can reach far-flung provinces, beating even the expanding reach of shopping centers and online retailing in the Philippines.

Avon markets a wide product portfolio, which successfully appeals to its target consumers, said the Euromonitor report.

Direct selling seeks to exploit the market potential through a network-centric business model, often with an emphasis on health and beauty products.

The prevalence of underdeveloped retail markets and the growing obsession with health among women make direct selling alluring to Filipinos who are looking for economic power and those looking to better themselves via self-improvement.

Data from market researcher Kantar Worldpanel shows that Filipinos are enticed to spend more through the direct sales channel, mainly because of the availability of an "installment" scheme. The fact that they are buying the items from friends or relatives is another factor.

Kantar Worldpannel study added that around half of consumers who buy through direct selling are from Visayas and Mindanao.

Moreover, the study noted that more than half of the direct selling customers belong to Class D households.