WFDSA Annual Report 2024 on the current situation and future trends in the direct sales industry

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A closer look at the European market: growth, trends and future prospects

The market in Europe recorded steady growth of 8.6% from 2019 to 2023.
Despite the challenges of the pandemic, the sector proved resilient.
In 2020, sales increased by 1.6% to USD 33,824 million, followed by a stronger increase of 4.4% in 2021 to USD 35,298 million.
Although 2022 saw a slight decline of 1.0% and sales fell to USD 34.958 million, the market recovered in 2023 with growth of 3.4% and closed at USD 36.149 million.

Germany stands out as a growth driver in direct sales and achieved impressive growth of 7.0% in 2023.
It thus outperformed general growth (2.9%).
Germany is consolidating its dominance in European direct selling, which now accounts for 54.7% of total sales in the region, driven by consumer demand and booming categories such as energy and telecoms.
However, the Direct Selling Association (DSA) forecasts moderate growth for 2024 and a possible decline in sales staff.

The role of social media and changing consumer preferences

Social media is increasingly influencing how younger consumers interact with brands.
The DSA highlights the importance of adapting to digital trends, with companies using specific products, social media activity and interactive strategies to attract new customers.
Personal connections remain crucial and direct selling is benefiting from the entrepreneurial opportunities that exist in Europe.

Women make up 53% of sales staff in direct sales, with a particular focus on personal relationships and entrepreneurial flexibility.
German sole traders are more likely to believe in the ease of starting a business: 41% are convinced that there are good opportunities and 42% are confident that they have the necessary skills and knowledge for business success.

What does the future hold for direct sales?

The DSA predicts that several trends will shape the future of direct selling in Europe.
Consumers are becoming more diverse, digitally savvy and place more emphasis on personal development.
The desire for flexible working, entrepreneurial opportunities and a focus on product personalization will continue to drive growth.
In addition, external factors such as economic downturns could encourage more people to explore direct selling as an alternative source of income.

In addition, the younger generation is attracted to direct selling as it offers modern products, online platforms and a strong sense of community through events and mentoring.
However, the industry is increasingly competing with the gig economy, e-commerce and influencer marketing.
The DSA believes that direct selling companies can remain competitive by prioritizing relationship building, ongoing support and lowering barriers to entry for new sellers.

As the retail landscape in Europe continues to evolve, companies that embrace digital transformation and respond to consumers’ desire for personalized, flexible options will thrive.
Despite the challenges ahead, the sector’s ability to adapt, driven by innovation and consumer engagement, gives confidence for the future.

Direct selling: A path for budding entrepreneurs and the competitive advantage of personalization

The Global Entrepreneurship Monitor (GEM) 2023/2024 sheds light on how direct selling can provide a solution to the challenges faced by aspiring entrepreneurs.
Several trends highlight the potential of direct selling, offering opportunities that overcome common entrepreneurial hurdles and respond to the growing need for personalization in today’s business environment.

Overcoming the fear of failure

One of the biggest barriers for budding entrepreneurs is the fear of failure.
In fact, at least two in five adults in 35 economies are hesitant to start a business for fear of failure.
Direct selling offers a way to overcome this hurdle because the barriers to entry are low and support systems are in place.
Two key factors reassure budding entrepreneurs: firstly, the minimal costs and risks associated with starting a direct selling business, and secondly, the strong support network provided by direct selling companies and their communities.
As the saying goes, “You’re in your own business, but you’re not on your own.”
In this model, companies provide important business-building support, education and the opportunity to learn from peers, creating a more accessible entrepreneurial path.

Support for entrepreneurs

The GEM report shows that entrepreneurial support for women is rated as inadequate in 37 out of 49 economies.
Direct selling, on the other hand, offers flexible opportunities that address the unique challenges faced by women entrepreneurs, particularly in balancing family responsibilities and entrepreneurial ventures.
By creating opportunities that adapt to these challenges, direct selling stands out as a viable solution that encourages more women to take the plunge into self-employment and creates a supportive network to help them succeed.

Promoting sustainability

Sustainability is becoming increasingly important for new entrepreneurs: at least one in two founders attach importance to ensuring that their business idea is in line with the Sustainable Development Goals (SDGs).
The focus on social and environmental responsibility is very popular in direct selling, as many companies are already integrating sustainability into their business practices.
This alignment with global trends towards responsible entrepreneurship not only appeals to environmentally conscious founders, but also positions direct selling as a force for positive change in the business world.

Education of entrepreneurs

Direct selling can also make a difference in the area of education.
The GEM report found that only five out of 49 economies received a satisfactory rating for the quality of entrepreneurial education.
Direct selling companies can close this gap by providing entrepreneurs with the tools and knowledge they need to build successful and sustainable businesses.
Through comprehensive training and mentoring, direct sellers are equipped with the skills to navigate the complexities of the business, further increasing the attractiveness of direct selling as a career path.

By addressing these key factors – fear of failure, support for women entrepreneurs, sustainability and education – direct selling positions itself as a driving force for entrepreneurial growth.
It provides an accessible and impactful path for those who want to start their own business, while creating a sense of community and support that many traditional models lack.

Personalization: The competitive advantage of direct sales

A major advantage of direct selling is its focus on personalization, which is increasingly recognized as a key competitive advantage in today’s market.
Building relationships through personalized experiences is a cornerstone of success in direct selling.
Consumers today are looking for brands that perceive them as individuals, understand their preferences and offer products that are tailored to their needs.
Direct selling thrives in this space by creating genuine connections between customers, sales associates and the brands they represent.

According to a McKinsey study 72% of consumers expect companies to know their interests and personalize interactions.
The study also found:
– 71% of consumers expect personalization.
– 76% are annoyed when companies don’t provide it.
– 76% are more likely to make a purchase when personalization is available.
– 78% are more likely to recommend personalized shopping options to friends and family.
– 78% are more likely to make repeat purchases from companies that use personalization.

By focusing on relationship building and personalization, direct selling companies can build loyal customer bases and drive growth.
Consumers who feel noticed and valued are more likely to stay engaged, make repeat purchases and recommend the company to others.
In a world where consumers are increasingly seeking personalized experiences, direct selling’s focus on personal connections offers a clear competitive advantage.

Conclusion

Direct selling offers aspiring entrepreneurs a unique and supportive business model that addresses key concerns such as fear of failure, gender inequality, sustainability and education.
In addition, its focus on personalization offers a distinct advantage in a market where consumers expect tailored experiences.
As the business world evolves, direct selling remains a compelling path for those seeking flexible, sustainable and personalized entrepreneurial opportunities.