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 �A meaningful introduction to the Direct Selling Association of South Africa (DSASA)�

Virtual Meeting: 18 March 2022, 07h30-09h00

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Honourable MEC – Thank you for the opportunity

Mr Parks Tau, MEC for Gauteng Economic Development.

RP

Honourable MEC – Thank you for the opportunity.

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Pillars of the DSA of South Africa

Membership

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Government

Affairs

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Public Relations

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Education Initiatives

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Africa Expansion

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DSA Directors

Chair: Rajesh Parshotam

Deputy Chair & Africa Expansion Director: Brandon Masondo

PR & Marketing Director: Lise de Kock

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Director: Mafahle Mareletse

Membership Director : Yusuf Bhyat

Government Affairs & Legal Director: Thilo Naidoo

DSA Directors

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DSA Strategic Support

GA & Stakeholder Engagement: Leigh Gunkel-Keuler

DSA Secretariat: Imtiaz Ebrahim

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Unprecedented times calls for unprecedented action!�

  • The DSA is of the view that with the Gauteng Department of Economic Development’s (GDED) support, this sector could become an effective contributor to the local economy.

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 Agenda

Introduction to the DSA

Understanding the Gauteng Dept of Economic Development (GDED) Mandate

The South African Unemployment Pandemic 

DSA in the news

Direct selling global and local indicators

Local economic impact of direct selling & the role of the township economy

DSA's proposal to Gauteng Department of Economic Development (GDED) 

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Who are we?

Not a pyramid scheme

Legitimate business opportunity for people to become independent distributors and members

An opportunity to exercise entrepreneurial spirit

An opportunity for people to earn supplementary and primary income

Significant contributor to the local economy

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Our vision

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To be leading ambassadors of the direct selling industry and proactively champion the interests of member companies who passionately create an enabling environment- in which lives are positively changed in our country.

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Awarded Platinum Status by WFDSA for 3 consecutive years.

Celebrating 50th Anniversary – representing member companies that distribute goods & services through independent contractors (referred to as direct sellers, distributors, sales agents, independent business operators).

An entrepreneurial opportunity where consumers can earn an income through professional distribution channels while supported strongly by direct selling companies.

The term‘direct selling’ encompasses multi-level marketing(MLM) also referred to as network marketing and referral marketing.

Every DSA member company pledges to abide by the terms set out in the industry Code of Conduct. All direct sellers are bound by the Code.

The Code has been developed within the framework and requirements of the WFDSA – the World Code of Conduct.

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Some of the DSA member companies

Corporate employer of people: approximately 4036 employees (2019 employees – Gauteng – 50%)

Bringing established brands to the country.

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Key Focus Areas of PR Strategy

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LEGITIMISATION

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ECONOMIC SOLUTION

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LEGITIMISATION�

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Direct selling as a legitimate, professional and ethical industry

Sensitising public on dangers of Ponzi and other get-rich quick schemes

Need for collaborative effort with government to elevate direct selling into a key economic lever

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ECONOMIC SOLUTION

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Direct selling business opportunity

Direct selling thought leadership (Part of mainstream debate about direct selling and SMEs in SA)

Positioning direct sellers as SMEs worthy of government support (NYDA reported that 1000 youth received assistance to start their own businesses-none of them were direct sellers)

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DSA in the Media

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Mandate

  • The aim of the Gauteng Department of Economic Development is to lead, facilitate and manage sustainable job creation and to promote an inclusive growth economy in the development of the Gauteng city region.
  • The Department's mission is to be an activist, interventionist and a developmentally-focused department in contributing to an inclusive and growing economy in Gauteng by providing thought-leadership to inform the economic development agenda; mobilising stakeholders to partner with for economic growth and development; creating an enabling regulatory environment and stimulating business practices that promote inclusive economic growth; enhancing the competitive advantage of key sectors of the economy; promoting and attracting trade and investment to the economy; directing investment into strategic economic infrastructure; and proactively linking communities to economic opportunities.
  • The Department's strategic goals are to provide integrated economic and development planning; facilitate the implementation of strategic programmes that will stimulate the brand, competitiveness and social transformation of Gauteng, enhance trade and export promotion, and attract investment; promote an efficient, equitable and socially responsible business environment; act as an economic intelligence nerve centre to inform strategic decision-making and targeted sector development strategies; and promote public accountability and achieve high standards of corporate governance and efficient resource utilisation.

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South Africa remains the most unequal society in the world.

  • The pandemic exacerbated inequalities.

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  • The COVID-19 pandemic made things worse for the ordinary South African. Food inflation has risen to 6.3%, the highest since 2017, and the unemployment rate rose to 32.6% in the first quarter of 2021. During strict lockdowns, two out of three people in the country reported not being able to work because of COVID-19 restrictions. South Africa had imposed harsh lockdowns since the start of the pandemic.

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Stats SA & Bloomberg Reporting – August 2021

  • South Africa’s unemployment rate surged to the highest on a global list of 82 countries monitored by Bloomberg.

The jobless rate rose to 34.4% in the second quarter from 32.6% in the three months through March, Statistics South Africa said Tuesday in a report released in the capital, Pretoria. The median of three economists’ estimates in a Bloomberg survey was 33.2%.

Unemployment according to the expanded definition, which includes people who were available for work but not looking for a job, rose to 44.4% from 43.2% in the first quarter.

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Direct Selling

�Global Industry Key Indicators

�2020���

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179.3 BILLION

U.S. DOLLARS

GLOBAL SALES FROM DIRECT SELLING

Global Industry Key Indicators : 2020

A global opportunity

125.3 MILLION

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125.3 MILLION

DIRECT SELLERS GLOBALLY

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Direct Selling

�Local Industry Key Indicators

�2020���

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Local Industry Key Indicators : 2020

DSA MEMBERSHIP

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Member Companies

24 – (Gauteng 18)

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Local Industry Key Indicators : 2020

SIZE OF INDUSTRY

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R7.7 BILLION RANDS

(R2.76 Billion: 36% - Gauteng)

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Local Industry Key Indicators : 2020

NUMBER OF DIRECT SELLERS

870,382

(322,534: 37% - Gauteng)

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Local Industry Key Indicators : 2020

EARNINGS OF DIRECT SELLERS

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R2.1 BILLION RANDS

(R806 Million: 38% - Gauteng)

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Local Industry Key Indicators : 2020

GENDER OF DIRECT SELLERS

FEMALE - 77% (79% - Gauteng)

MALE - 23% (21% - Gauteng)

DEMOGRAPHICS OF DIRECT SELLERS

AFRICAN - 89% (92% - Gauteng)

WHITE - 6% (5% - Gauteng)

INDIAN - 4% (2% - Gauteng)

COLOURED - 1% (1% - Gauteng)

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Local Industry Key Indicators: 2020

AGE PROFILE OF DIRECT SELLERS

Under 35 - 38.38% (39.80% - Gauteng)

35 to 44 years - 25.90% (25.92% - Gauteng)

45 to 54 years - 17.27% (16.02% - Gauteng)

55 to 64 years - 11.34% (11.08% - Gauteng)

65 and over - 7.11% (7.18% - Gauteng)

64% below the age of 45 (66% - Gauteng)

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Our social commitment

  • All DSA member companies offer ongoing skills and overall business training opportunities to their distributors. This in turn enhances their overall business skills as small business owners/entrepreneurs.

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Our Social Commitment in Action

  • The DSA makes a substantial skills development contribution via the DSA-UJ Work Integrated Learning Programme.
  • The programme focuses on practical sales, entrepreneurial skills and overall business and life skills development which enhances the students’ direct selling capabilities.
  • Via this programme the DSA advances the reach of the direct selling industry by focusing on the employability of students.
  • The project provides an opportunity for companies to build brand awareness in the youth market and to develop future business builders within the direct selling space.
  • Most encouraging are the results of this project. Now into its 20th year, there have been over 15,000 students through the programme since inception, around R14 million earned by participating students from approximately R53 million of sales by students with approximately R750,000 paid in bursaries by DSA member companies to top UJ students.
  • Furthermore, top students have won product prizes sponsored by the participating DSA companies based on their sales performances.

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The Potential of the Township Economy

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The importance of the township economy

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“The significant participation and meaningful inclusion of

the people of the township into mainstream economy of

Gauteng through their own township enterprises that are

supported by the government and big business will be one

of the key game changers…The townships must be

self-sufficient and vibrant economic centres.”

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  • Premier David Makhura, State of the Province Address (June 2014)

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Objectives: township economy 

OBJECTIVES

  • To create jobs in the township.
  • To create opportunities for existing township entrepreneurs to expand and for new entrepreneurs to emerge.
  • To increase the income returns from economic activity – including for workers employed in such enterprises.

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The opportunity of different vantage points.

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A need for recognition, support & investment

  • Direct selling industry is a low hanging fruit and quick-win in contributing to our economic recovery goals.
  • It has the ability to absorb hundreds of thousands of people with minimal investment as there are very few (if any) barriers to entry to this sector.
  • Scalability of business with very little capital required; and central to the growth of other businesses – marketing, communications, warehousing, courier-services, etc.
  • With the necessary Investment, the need for the development of the sector as well as regulations that assist the industry to flourish.
  • Strategic intervention from government can be one of endorsement and partnership.
  • Direct selling is unique in terms of cost-benefit opportunity.
  • A minimal investment can result in the creation of income generation opportunities for members, distributors entrepreneurs and by so doing, contribute effectively to job creation and employment opportunities.
  • The ability to upskill distributors and guide them along the entrepreneurship path bodes well for future economic development.

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 The multiplier effect of direct selling

Put money in the hands of people who in turn become consumers.

Increase aggregate demand in the economy.

Increase critical mass/market size to make it attractive for capturing the other segments of the industry value chain in the local economy. Employer of people – direct and indirect.

Ultimately making SA more attractive for FDI.

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Common goals: DSA and Gauteng Dept of Economic Development (GDED)��

  • Direct Selling Association and GDED are both looking for the same outcome which is to grow our productive segments of the economy.
  • To create opportunities and create work for people so that they can enter these segments of the economy.
  • To generate incomes that have multiplier effects to the broader economy, and in turn create opportunities in other sectors of the economy.
  • In essence we both have a desire to promote industries that can quickly and with little investment, get citizens working again.

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Key engagements over the past 18 – 24 months and our ‘Ask’

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  • Our voice being heard on key regulatory impediments and due recognition for the value of the direct selling industry locally.
  • Seek out mutually beneficial opportunities inclusive of capacity training for distributors, entrepreneurs.
  • Opportunity for partnership and collaboration to advance the mutual objectives of the direct selling industry and the Gauteng Province.

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Objectives for Today’s presentation to MEC for Economic Development, Gauteng

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  • An introduction to the DSA.
  • An understanding and appreciation of our value proposition as an industry.
  • Provincial support to ensure relevant engagements take place with key representatives in government.
  • Further relevant engagement which could result in a structured programme to ensure country value is derived from the direct selling industry.
  • An opportunity to report back on progress on any programme success at designated time.
  • An opportunity to present to the Hon. Premier and other members of the provincial executive on the value/role of direct selling in the province.
  • Possibly an opportunity to become a part of provincial discussions which seek to further ‘unlock’ the economy via economic segments, in our case distributor entrepreneurship.

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THE WORK CONTINUES, HOPEFULLY WITH YOUR SUPPORT…

RP

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Thank you