Direct selling firms are facing the heat from online retailers. Amway, Tupperware and Oriflame have issued notices to e-commerce sites including Snapdeal, Flipkart and eBay, asking them to stop selling their products.
The merchandise of these three direct sellers is not only offered at discounts as high as 40% but also bypass and strike at the very heart of the direct-sales distributor model that these firms follow globally.
In the direct selling model, there are no sales through traditional retail outlets — companies hire distributors who, in turn, sell products to consumers. Most times, errant distributors themselves supply unsold stocks to e-commerce sites and the firms are working to identify and penalise them.
“Oriflame products are not allowed to be sold by unauthorised persons, entities and means and we have issued notices to these ecommerce platforms that are selling our products. The sale of our products on these online platforms not only diverts sales from our distributors but also undermines the essence of direct selling as a proposition,” Vivek Katoch, director – corporate affairs at Oriflame, maker of cosmetics and personal grooming products, told ET.
Katoch said from a consumer point of view, some products need recommendations and usage details, which is not possible with