Amid pandemic, direct selling industry grew by 20% last year

PETALING JAYA: While most business sectors have been badly impacted by the Covid-19 pandemic, direct selling grew by about 20% last year over 2019.

Direct Selling Association of Malaysia (DSAM) president Datuk Tan Chong Guan said the sector recorded sales of RM21.5bil last year while recruitment increased to four million from 3.3 million.

“The direct selling members are in a way a bit luckier because the pandemic has brought us growth,” he told a press conference on Friday (July 16) held to announce a fundraising initiative between DSAM and the Malaysian Retail Chain Association (MRCA) to benefit the needy.

“It's through word of mouth that people (learned they) can make a living through selling health and household products. I would say more than half of our members are doing well,” he added.

Tan said DSAM has about 126 members and nearly half of them showed growth in sales revenue.

“When people were in lockdown last year in March, they realised the importance of health.

“Before the vaccine came about, a lot of people (set out) to improve their immune system and the sales of our health products increased,” he said.

Tan added that as people lost jobs and faced salary cuts, they realised that direct selling was a way to supplement their income.

He said that before the pandemic, the percentage of their members' online business was in the single digits but there had been a steady increase over the past 12 months.

He said now, almost 60% of their business was done online.

Tan said, however, that the sector still needed human contact in certain areas, and some businesses in particular such as those selling water filters had been negatively impacted.

The MRCA, meanwhile, said a survey among 100 respondents in June revealed that 70% reduced their workforce and 40% terminated more than 10 employees per company.

“After tabulations, it is quite safe to say more than 50,000 employees have been terminated,” said MRCA president Shirley Tay.

She said 51% of respondents implemented wage reductions and 55% downsized their retail operations.

“It is very clear that many people’s financial status has been affected," she said.

Both MRCA and DSAM announced that they have joined hands to raise emergency funds to buy essential food supplies for those in urgent need.

The initiative aims to raise RM500,000 and distribute food boxes to more than 10,000 families in the Klang Valley and surrounding areas.

Since early this month, food boxes have reached 2,000 families in nine locations in the Klang Valley.

Each food box contains 5kg rice, instant noodles, vermicelli, sardines, baked beans, malt-based chocolate drink powder and biscuits.