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Thailand: Direct sales sector forecast to slip just 1-2% this year
Thailand’s direct sales industry is expected to contract by 1-2% this year as consumer purchasing power remains weak due to the spread of Covid-19.
Kittawat Ritteerawee, president of the Thai Direct Selling Association (TDSA), said domestic household debt is the highest in 18 years and economic uncertainty is causing consumers to be cautious with their spending, buying only essential goods.
Thailand’s direct sales shrank by 1% to 70 billion baht in 2020. It was reported that the market contracted by more than 5% in the first half of 2021 due to the spread of the pandemic which has weakened consumers’ overall purchasing power.
“We hope in the second half of the year, the overall situation will ease up and sales will improve by the end of the year, resulting in a market contraction of only 1-2%, following the government’s Covid-19 vaccine allocation plans, the easing of lockdown restrictions and a series of economic stimulus measures,” Mr Kittawat said.
He said the direct sales business is expected to recover in the very near future because the goods and items marketed by direct sales channels are mostly daily-use consumer products that gain high brand loyalty.
In addition, the current consumer trend of a healthy lifestyle offers an opportunity to businesses with great potential for product research and development to manage to meet consumers’ demands.
“The impact of the pandemic has led people to seek alternative careers. The direct sales business provides people with opportunities to fulfil their needs in the current economic climate. In every crisis, it always has an opportunity for direct sales. However, we have to adjust ourselves to cope with the changes in terms of products, brand building and platform,” said Mr Kittawat.
In a related development, Suchada Theeravachirakul, chairperson of the World Federation of Direct Selling Associations (WFDSA), said Thailand is scheduled to host the 16th WFDSA World Congress “Tomorrow is Now” virtually on Oct 6-7.
The event is expected to bring together an array of executives, academics, economists and legal advisers who will share experiences and opinions on how to unlock the collaborative success of direct selling companies and independent distributors across the world, ensuring that the direct selling business is ready for future growth.
This is the first time Thailand was elected to host the congress, aiming to promote knowledge and exchange perspectives, as well as sharing insightful information covering all areas which benefit business and the development of the potential of direct selling companies and independent distributors worldwide.
Despite the impact of digital disruption and the spread of the pandemic over the past two years, the global direct selling industry continued to grow by 5.8% reaching US$179 billion in value last year, with the number of independent distributors increasing by 4.3% to more than 125 million.
The continuous growth was driven by the Asia market, which is the world’s fastest-growing region.
Source: https://www.bangkokpost.com/business/2183135/direct-sales-sector-forecast-to-slip-just-1-2-this-year