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Direct Selling Industry Growth In India Is Slowing
by Tina Williams • • 0 Comments
The direct selling industry, which is facing challenges in the Indian market due to regulatory issues, has witnessed a reduced 4.3% growth in 2013-14 compared to 12.2% in 201213 fiscal, says a report. Gross sales stood at Rs 7,472.2 crore in 201314 while the industry had posted a growth of 12.2% in 2012-13 with sales amounting to Rs 7,164.1 crore, said a report issued by industry chamber PHD in association with the Indian Direct Selling Industry (IDSA).
“The direct selling industry has registered growth rate of about 4.3% in 2013-14 as against the growth rate of 12.2% of 2012-13, 22% of 2011-12 and 24% of 2009-10,” the report said.
Although the growth rate in India is on a decline in the past three fiscal years, on a global basis the direct selling industry has grown over 8% in 2013, it added. The North region accounted for 29% of sales the highest level with an increase of 12.2%, followed by South region with 25%. However, the South region saw a drop in sales.
“Southern region, which was earlier our main base, is not doing well due to lack of clarity on the policy for direct selling. In state like Kerala, direct selling has stopped,” said IDSA Secretary General Chavi Hemanth.
Products related to healthcare/wellness contributed 44%, followed by cosmetic and personal
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Herbalife Moves To Curb Rogue Sites
by Tina Williams • • 0 Comments
Herbalife, the diet shake seller being probed over pyramid scheme accusations, is making another move to keep regulators at bay.
The Los Angeles company is banning independent web sites run by US distributors and migrating their businesses to a corporate-controlled hub (goherbalife.com).
The change, which goes into effect Nov. 15, is an attempt to exert more control over Herbalife’s sales force and follows some instances in which distributors were accused of making false health claims about the company’s products.
“The web sites are designed to be in compliance with applicable requirements about product claims and they provide a consistent brand image for Herbalife products,” the company said in its advisory, adding the goal is to “promote a level playing field for all members.”
The Federal Trade Commission opened an investigation into Herbalife after hedge fund activist Bill Ackman lobbied hard for a probe and placed a $1 billion short bet on the company.
Ackman, whose big Herbalife short is now closer to $2 billion, claims the company is a pyramid scheme in which distributors earn more money from recruiting other distributors than by selling products to the end user.
While Herbalife denies the allegations, it has taken steps to address some potential trouble spots, including a
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Herbalife Hires Former FTC Commissioner For Compliance Department
by Tina Williams • • 0 Comments
Herbalife Ltd. HLF has hired a former U.S. regulator to lead its compliance team, after the Federal Trade Commission opened an investigation into the embattled nutritional-supplement company in March.
Pamela Jones Harbour —who worked as an FTC commissioner from 2003 to 2010 and as a prosecutor for the New York State Attorney General’s office for 12 years—has been appointed senior vice president of global member compliance and privacy. She will lead a compliance team across 91 markets in the newly created role, Herbalife said Monday.
Ms. Harbour’s appointment comes as activist investors continue to face off over the company.
Herbalife, which sells weight-loss shakes and fitness supplements, has been pummeled by hedge fund manager William Ackman since December 2012, when he spent more than three hours in a Manhattan auditorium laying out his case for why he thinks the direct marketer is a pyramid scheme whose salespeople rely more on signing up new recruits than selling product. Mr. Ackman has repeatedly called for an FTC investigation into the company, and his firm, Pershing Square Capital Management, has bet about $1 billion that the company’s shares will fall.
The company has repeatedly defended its operations and has won the support of a number of Mr. Ackman’s hedge fund rivals, including Carl