The Centre has issued guidelines to regulate direct selling companies like Oriflame, Avon, Tupperware and Amway with clear provisions to protect consumers and prevent firms from exaggerating the benefits of products or charging a fee from their agents.
Companies like these appreciated the Consumer Affairs Ministry for the guidelines, which industry people said would weed out fake players and will help serious companies grow.
Government has asked states to implement guidelines for firms involved in direct sales to customers, sidestepping retail stores.
"We have sent an advisory to state governments on the model framework for guidelines on direct selling after consultation with industry and stakeholders. Some states have already made their guidelines and can make changes locally," Hem Pande, secretary in the Department of Consumer Affairs was quoted as saying by ‘The Economic Times’.
"The state governments will also set up a mechanism to monitor/supervise the activities of direct sellers, direct selling entity regarding compliance of the guidelines," the consumer affairs ministry said in a note dated September 9.
Pande said presently, direct selling had no guidelines. "Some companies took fees from members, others didn't. If we get a good response, then we may come with a regulation. As of now, it will be voluntary. To promote and grow direct selling, we need guidelines," he said further.
Guidelines seek to protect sale agents and consumers and bar ecommerce platforms from offering products or services of direct sales companies without their written agreement.