Since direct selling was introduced in Italy in the late 50ies, it has enjoyed excellent acceptance by both business builders and consumers. This is due to the country’s intrinsic factors: its culture of open-mindedness, its propensity to independent commercial activities, and its 60.8 million inhabitants spread across the territory in densely populated areas facilitate relationships and personal interaction.
Not surprisingly, Italy is seeing a constantly growing presence of both national and international direct selling companies doing the equivalent of over US$3.24 billion, making Italy the third country in Europe in terms of sales volume and the sixth country based on the number of consultants, estimated at 406,000.
Direct sales is the only economic sector in Italy that for ten consecutive years has been growing, even during times of overall economic slowdown and increased unemployment (estimated at 11.2 percent in 2013, with youth unemployment at 36.6 percent). Italians recognize that direct selling provides a vital economic and professional alternative for young people looking for career solutions in the short term. This explains a constant increase in the number of consultants. The direct sales model, combined with the commitment of the companies operating in the sector, the professionalism of the consultants, and the attention paid to customer service and consumer protection, is highly accepted and liked.
Italy is the ninth economy in the world with the sixth highest GDP (both absolute and weighted) in Europe. The distribution of income in Italy varies considerably between North and South and this difference is reflected in the structure of direct selling. A higher GDP and purchasing power in the North means a higher sales percentage and a lower consultant percentage than the national average. A lower GDP and purchasing power in the South means a lower sales percentage and a higher consultant percentage than the national average.
Party plan represents 35 percent of direct selling in Italy, which is higher than other European countries due to the presence of the important sales generated by companies traditionally active with this method. Multilevel marketing (representing 35 percent) began to establish itself in a significant way relatively late, starting with the big American companies entering the country in the eighties. This late start was due in part to the Italian legislation and in part to a certain resistance from more traditional direct sellers. Today multilevel marketing is a well established and fully integrated, experiencing constant growth and development with an increasing number of companies entering the market every year.
Ninety-four percent of consultants do the business part time. Italian direct selling sees an unusual high percentage of men (24 percent) because of the presence of companies distributing high-end technological durable consumer goods with consumer financing, allowing for the business to easily become a main career and full-time employment.
Product categories are diverse, even if the most important market share is inevitably beauty and fashion accessories (27 percent) and wellness and nutrition (30 percent), followed by household care and durables (21 percent).
Legal and Fiscal Affairs
Legislation both in terms of the legal contracts for consultants and fiscal treatment of the business is significantly different from other European legislations. Although complex, both the official legislation and practice guidelines give a clear definition of the rules and procedures to follow. The two Italian direct selling associations, Avedisco (founded in 1969) and Univendita (founded in 2010), should always be the first contact of any company wanting to start or improve its business in the Italian market. These associations can offer specialized assistance in choosing the most appropriate professional contacts for legal, fiscal, and commercial advice.
Consumer and Consultant Protection
Direct selling companies have worked hard to strengthen and consolidate their image and credibility in the Italian market, not only by implementing all the European regulations, as is to be expected, but also by developing a Code of Conduct all companies must strictly adhere to if they want to be granted the valuable and prestigious trade mark of one of the two direct selling associations mentioned above.
Together these associations currently count forty-five member companies and aim to protect the consumer as well as anyone wanting to approach the world of direct selling or already belonging to it.
Logistics and Transport
Italy’s complex geography and the morphology of its territory could suggest difficulties in communication or transportation to deliver orders to consultants and end consumers.
In reality, the presence of large logistics centers and national as well as international transportation companies guarantee efficiency of logistics and transport. These organizations have no problem meeting the needs of each company, independently of its size, geographic location, product characteristics, or penetration in the territory.
The islands (Sicily and Sardinia), however, require special attention when planning logistics and transportation because they involve costs and delivery times usually higher than the ones applied to mainland.
Payment systems at last are evolving and becoming more flexible and efficient.
The traditionally limited circulation of and propensity to use credit or debit cards is changing rapidly and today there are much more opportunities and understanding for companies working with the advance payment of the order.
Is it worthwhile therefore to invest in expanding your business in Italy? Of course it is! The cradle of Western Civilization and the birthplace of the Renaissance, Italy remains one of the most desirable destinations because of its cultural and natural riches. Why not pursue your dream of building a team in our beautiful country? Benvenuto in Italia!
ALESSANDRO GHIDINI is partner with Meridian Associates.
After many years in the direct selling industry in senior positions
he is now providing a wide range of consulting services,
especially in Italy, Spain, and other Southern European Countries.