Updates – Organics, Direct Selling

Organics

In May, we ran a post on the market for organic goods and how this market has been seeing a lot of activity in the past few years. One of the key challenges faced by the industry is the lack of adequate and standardized certification methods and policies. A recent initiative in the organics textiles industry is all set to help this sub-segment grow. To keep up with the increased demand for organic textiles, the Agricultural and Processed Food Products Export Development Authority of India (APEDA) has launched certification standards by recently including the National Organic Textile Standards (NOTS) under the National Programme for Organic Productions (NPOP). This initiative would help boost demand for organic textiles products as well as benefit local producers and the environment. Owing to this, organic textiles exports are expected to increase by 50%, from Rs.1,027 crores in 2011-12 to Rs.1,500 crores in 2012-13. (Click here and here to read news reports)

Direct Selling

In May, we also ran a post on the direct selling business model followed by companies like Tupperware, Avon, Amway, Oriflame, etc. and how this has now become a force to be reckoned with in India especially for traditional FMCG and OTC companies. A recent article in the Economic Times caught my attention regarding the same. Below is an excerpt, click here to read complete article:

While traditional FMCG companies are facing slower growth due to economic slowdown and weak monsoon, direct-selling companies seem to have bucked the trend riding on stable demand, direct engagement with consumers, flexibility in market penetration and lower costs.

Direct selling firms—which sell their products to consumers without routing them through retail stores—are estimated to have posted 21%-23% growth in India in 2011-12, according to IDSA and industry body PHD Chamber. In contrast, traditional FMCG companies, which sell through retail channels, grew 15% in 2011, and 17% so far this year.

Clearly it is the traditional FMCG and OTC companies that need to take notice and be prepared.

  • Roshni Jhaveri
2012-08-13T08:21:59+00:00

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