How direct selling created economic solutions during pandemic
From left to right: QNET Business Development Executive Muqtadir Suwani, V Council Member Patrick Phamien, V Council Member Jean Luc, QNET Head of Marketing Irina Polyakova, V Partner David Sharma, Associate V Partner Fofana Amaral, QNET Côte d’Ivoire Agent Dr. Solu Fofana , and V Council Member Sylla Youssef
What you need to know:
From 2017 through 2020, the Direct Selling industry saw a CAGR of 3.0 percent (excluding China), demonstrating resilience where most commercial sectors are experiencing a downward trend due to the pandemic,” reads the report in part.
While all other sectors of the global economy have suffered great losses owing to the outbreak of the Corona virus pandemic, the Direct Selling industry has remained resilient and even experienced growth.
“Direct selling is a sales channel used by companies to promote products away from a physical retail location and directly to the end consumer primarily relying on word-of-mouth promotion from existing users,” explained Qnet East African Regional Coordinator Muqtadir Suwani.
In a recent media communiqué, Suwani said according to the International Monetary Fund (IMF) the global economy shrunk by 4.4 percent in 2020.
“Yet at that same time, the latest Direct Selling Report, published by the World Federation of Direct Selling Associations (WFDSA), shows global direct sales increased by 2.3 percent year-on-year, from US$175.3 billion in 2019 to US$179.3 billion in 2020,” he detailed.
He also pointed out that the International Monetary Fund recently raised its projection for economic growth in 2021 to 6 percent, up from 5.5 percent, and projects 4.4 percent growth in 2022.
“In linewith these projections, the direct selling company Qnet, experienced a record-breaking growth of up to 65 percent in some African markets,” he added.
He went on to explain that the report shows the 3-year Compound Annual Growth Rate (CAGR) for Direct Selling is rising despite the devastation caused by Covid-19.
“From 2017 through 2020, the Direct Selling industry saw a CAGR of 3.0 percent (excluding China), demonstrating resilience where most commercial sectors are experiencing a downward trend due to the pandemic,” reads the report in part.
Notably, due to the increased use of the internet, the global digital market for goods and services is expanding at unprecedented rates and East Africa is no exception.
According to a study conducted by Trade Mark East Africa TMEA (2020), 91 percent of those sampled in Uganda had made online purchases in 2020, 86 percent in Kenya, 81.3 percent in Tanzania, 58.8 percent in Burundi, and 50 percent in Rwanda and South Sudan, indicating a significant potential for growth in online market delivery channels in these countries.
Africa has been projected to be the new frontier of direct selling. The region has one of the highest 3-year CAGR at 6 percent. The World Bank’s economic analysis highlights how African countries were quick to recover from the Covid-19 crisis.
“Locals are adopting digital technologies exponentially, boosting productivity and employment opportunities as e-commerce opens up new prospects for businesses,” the World Bank reports.
The report further explains that road to strengthening Africa’s economy will lie in remote work and gig opportunities. How well digitisation is integrated into the current economy, allowing businesses to leverage their digital commerce infrastructure and local know-how to provide new gainful income opportunities, will be key to this process and Direct Selling is leading the way to this ecommerce revolution.
