Reliance retail is plannning to distribute their subsidiary "reliance fresh" products through Network Marketing/Direct selling.

Reliance retail is planning to sell the products at wholesale prices which could not only exhaust the inventory that has been piling up but also create a new sales channel. Reliance Fresh a food and grocery supermarket, grew 20% last year with sales of . 2,514 crore for 2010-11. It posted a net loss of 160 crore.

 For all the customers reliance would be providing a flat discount of 30% to all the customers which could be sold to their friends or relatives for 20% margin. This would ensure them to get a handsome amount of 20% profit.  Reliance Retail would be the first national retailer to try business growth through multi level marketing strategy.

Network Marketing or MLM ( Multi Level Marketing) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels of compensation.

Some of the Factors thats affecting the Network Marketing (MLM) companies in India.

a. Retail Sector Growth
b. Huge Population
c. High Thinking/English Speaking crowd
d. Huge Market

Although statistically speaking there is a big difference between the two as the size of the domestic retail sector is pegged at 1.35 Lakh Cr. On the other hand, the direct selling industry currently stands at Rs 4500 crore. In order to get its act together the Indian Direct Selling Association is in talks with the Ministry of Consumer Affairs to give the direct selling business industry a status and design a framework with the dos and don'ts of direct selling in India.

India stands 11th overall among the top 25 countries world wide in the number of sales consultants present within the direct selling network, and 23rd in terms of the revenue generated through direct selling

There is no doubt that the retail sector in India is on an upswing and is now being considered to be the next sunshine industry but as India's direct selling industry gears up for the future in a collective way, can it give the retail sector a run for its money?

1. RMP Infotec PvtLtd Estd. 2001 Chennai India
2. Amway India Corp Estd. 1995 NCR Delhi India
3. ModicareLimited Estd.1996 Delhi India
4. HerbalifeInternational India Pvt. Ltd. Estd.1996 Commissariat Rd, Bangalore, India
5. Oriflame IndiaPvt Ltd Estd. 1995 Connaught place, NCR Delhi, India
6. Tupperware India Pvt Ltd Estd. 1996,Gurgoan India

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For starters, Direct selling/Network Marketing is the distribution system employed by certain companies in which they engage private citizens on a contractual basis to sell their products/services to the consumers.

The distributor, being not an employee of the company, will, in most cases, be able to set his schedule, level of effort and comfort, the distributor’s compensation comprises the margin between the wholesale and retail prices of the product and also the extra bonus paid by the company to him when sales volumes hit certain levels.
There are over 3,500 companies globally that use only this system for sales, with 61 million distributors aggregating sales of $110 billion (2007). India is on the radar of many such companies from all regions whether it is USA, Europe, and South East Asia. And many more are waiting for the government to pass legislation for Direct Selling industry in India, which is not considered as an industry yet.

India lacks a clear policy on direct selling (DS), which under a proper regulatory framework could have given millions with limited means a legitimate tool to earn a decent living and develop marketing and management skills.

Some of the foreign multinational companies like Amway, Modicare, Avon and Herbalife have formed a self regulatory association IDSA to convince the government about the potential of such an industry to the Economy and make their way into the booming consumer market in India.

The total size of the direct selling industry in India, not including the insurance activity, is estimated to be at Rs 33,300 million for 2008-2009. And it’s expected to reach Rs 53,200 million by 2012-2013

In such a time of Global Crisis we strongly believe that there is a lot of potential for employment in this sector provided the most important safeguard— no payment unless product is sold— is in place