The direct selling and network marketing business sector has the potential for dramatic global growth over the next years. That growth will be driven by widespread entrepreneurial movement across the developing countries of the world and reinforced by the resurging economics of the developed economies.

While recent issues of Networking Times featured overviews of network marketing in specific countries (namely Turkey and India), the goal of this article is to present a global perspective on direct selling and network marketing today. Going forward, Networking Times will continue to publish country overviews by contributors from different regions around the world.

The data in this article come from the WFDSA (World Federation of Direct Selling Associations) June Statistical Report, 2012, and are the most recent available. Their presentation is intended to reinforce the power and credibility of network marketing, a fundamental mission of Networking University. The facts and interpretations may be a valuable reference for distributors and serve as a handout for training sessions.

Global Sales in Direct Selling (2007—2011)
In 2011, the WFDSA reported direct global sales of $153.8 billion (retail US$) by 91.5 million direct sellers.

Table 1. Direct Global Retail Sales and Number of Direct Sellers (2007—2011)


Year

Global Sales (US$ billions)

Direct Sellers (millions)

2007

$114.0

62.9

2008

$114.0

65.0

2009

$117.5

74.0

2010

$141.2

84.3

2011

$153.8

91.5

Table 1 reflects dramatic global sales growth, from $114 billion in 2007 to $153.8 billion in 2011, an increase of 34.9 percent over a five-year period. This impressive growth is driven by two factors:

U.S. Sales in Direct Selling (2007-2011)
The United States has historically been the global sales volume leader in direct selling, at almost $30 billion dollars and involving over 15 million direct sellers in 2011.

Table 2 shows that the U.S. is maintaining its leadership as the number one direct selling producer. Sales, however, have been flat over the 2007—2011 period, while the global market has expanded.

Table 2. U.S. Retail Sales and Number of Direct Sellers (2007—2011)


Year

Global Sales (US$ billions)

Direct Sellers (millions)

2007

$30.8

15.0

2008

$29.6

15.1

2009

$28.3

16.2

2010

$28.6

15.8

2011

$29.9

15.6

Analysis of Global Direct Sales by Region (2011)
Table 3 summarizes the global distribution of direct sales in US$ and direct sellers in major regions of the world.

Table 3. Distribution of Direct Sales and Direct Sellers by Region/Country


Region/Country

Percentage Dollar Sales By Region

Percentage Sellers By Region

Asia/Pacific

36.7% 

51.6%

U.S./Canada

33.2%

26.5%

Latin America

15.5%

9.9%

Europe/Africa/Middle East

14.6%

11.0%

Total Global

100.0%

100.0%

The Billion-Dollar+ Sales Club (Countries with Over 1$US Billion in Retail Direct Sales, 2011)
Table 4 lists the individual countries in rank order, high to low. Analysis of the data supports several conclusions:

Table 4: The Billion-Dollar+ Sales Club in Direct Selling


Region/Country

Sales (US$ billions)

Sellers (millions)

U.S.

$29.9

15.6

Japan

$23.9

3.4

China

$16.3

N/A

Korea

$12.9

4.2

Brazil

$12.0

2.8

Mexico

$6.3

2.2

Germany

$3.7

0.3

Russia

$3.6

4.1

Italy

$3.4

0.4

Malaysia

$2.9

7.4

Venezuela

$2.9

1.0

Taiwan

$2.8

4.7

Canada

$2.2

0.7

Thailand

$2.1

15.6

Colombia (LA)

$2.0

1.2

U.K

$1.9

0.4

Argentina

$1.6

0.6

Turkey

$1.2

1.2

South Africa

$1.2

1.4

Peru

$1.2

0.4

Indonesia

$1.0

8.2

Total

$135.0

75.8

Percentage of Total Global

87.8%

82.8%

TOTAL GLOBAL

$153.7

91.5

Global Report on Sales by Product Category (2011)
Table 5 summarizes the breadth of global sales by product category in 2011. Several conclusions can be drawn:

Table 5. Global Sales by Product Category (US$)


Cosmetics and Personal Care

30%

Wellness

25%

Household Care and Durables

16%

Clothing Accessories

9%

Books, Toys, Stationery, Etc.

3%

Home Improvements

3%

Financial Services

3%

Feedstuffs and Beverages

2%

Home Care

2%

Utilities

2%

All Other

5%

Total

100%

Based on these data, it is clear that the direct selling/network marketing business sector has a global footprint!

Even though the twenty-one Billion-Dollar+ Sales countries dominate the market, reporting over 87 percent of dollar sales (US$) and over 82 percent of direct sellers, the growth of traditional leaders is slowing or flattening. The future business growth will be driven by the developing countries of Asia, Africa, the Middle East, and Latin America.

Look for more country overviews of those developing markets in future issues of Networking Times.

Dr. Charles King is professor of marketing at the University of Illinois at Chicago and president of Networking University.