Ng says a main driver of growth is the direct selling blue print.
GEORGE TOWN: The Direct Selling Association of Malaysia (DSAM) is targeting 8%-10% growth this year in the turnover of its members from RM3.86bil in 2012.
President Frederick Ng told StarBiz that in 2012, the turnover of DSAM members grew strongly at 19% due to the contribution of a new member of RM3.86bil from RM3.24bil in 2011.
Growth this year is projected to be slower due to the global economic challenges, according to Ng.
Moving ahead, Ng said a main driver of growth would be the direct selling blueprint that was launched by the Domestic Trade, Co-operatives and Consumerism Ministry in December 2012.
“Over the past 18 months, the DSAM has collaborated with the ministry to achieve a sales turnover of RM20bil for the industry by 2020, a target set by the blueprint.
“In DSAM’s monthly visits to member companies, many of them reported strong sales in the first half of 2013. They are optimistic about their overall performance for 2013,” he said.
On the direct selling industry in the region, Ng said Malaysia was ranked 8th globally in retail sales with an estimated turnover of RM14.4bil in 2012.
On DSAM plans for its members, he said the Asean Direct Selling Community initiated by DSAM last year would pave the way for the respective DSAM members in Asean to explore and set up businesses in the region.
“This initiative will extend the current growth of the industry in Malaysia and the region,” Ng added.
According to Ng, the key drivers of growth in 2012 were dietary and herbal supplements, contributing 44% of total sales, while cosmetics and external personal care products and home appliances generated 16% and 12% respectively.
These products should continue driving the growth of the direct selling business in Malaysia, Ng added.
Meanwhile, the World Federation of Direct Selling Associations (WFDSA) chairman Alessandro Carlucci said in an e-mail interview recently that the outlook for the direct selling industry in Malaysia was robust.
“Over the past 18 years, the DSAM records show that the overall performance of the direct selling industry in Malaysia improves when there is an economic downturn or slowdown. It is in such situations that the industry provides opportunities and possibilities to those afflicted by the downturn or slowdown,” Carlucci added.
Carlucci said that in addition to Malaysian companies starting up, there was also a small influx of international multinationals venturing into Malaysia.
“Companies from the United States, Japan, South Korea and China have been establishing themselves here lately and this will definitely contribute to the continuous growth of the industry in Malaysia.
“In terms of business expansion, countries that Malaysian direct-selling companies are looking into are Thailand, Indonesia and Vietnam. They believe that these countries will be the next booming markets in the region.
“Other countries that are getting significant attention by Malaysian companies include Myanmar and Cambodia,” Carlucci said.
Meanwhile, Amway Malaysia executive director Paul Yee said Amway would convert the four regional distribution centres (RDCs) in the country to shops next year, increasing the number of shops nationwide to 25 from 21 presently.
Yee said the group expected to achieve a low single-digit growth in sales revenue for 2013.
”We will grow by enhancing the accessibility of our products and brands through our new shops, greater utilisation of IT technology and new product introductions,” he said.