It has been little less than 25 years from when I remember a good friend extending to me an inspiring invitation to attend a meeting where people was going to speak about businesses. That invitation came along with a sentence that was similar to “this proposal can change your life and turn it into something better”. It was a very attractive invitation and that sentence still resonates in me. Because I never imagine that years later those words would frequently be repeated. I went to that meeting with my friend and once we were there we found a group of professional people from different age ranges. There was where I first heard the concept “Multilevel Marketing”.
For those that are no very familiar with the “Multilevel Marketing” concept it is about creating networks of people that create a distribution channel for manufacturers, in order to deliver the products to the final consumers. This means that those products are not distributed through traditional channels like wholesalers, supermarkets, stores, etc. The Multilevel channel works only from the people to the people.
The people receive benefits for the effort they put on creating the network and delivering the products to the customer. Those incentives take the forms of bonuses and rewards. The bigger the quantity of people each one has within his/her network, the greater the benefits will be. This new business form is called Multi-level Marketing or Network Marketing.
Nowadays the Latin-American market is changing. Because not only the consumers are changing their consumption patterns, but the companies are also seeing the necessity to adapt themselves to this changes. And the Multi-level marketing is becoming more and more important in this regard, especially because this business work from the people to the people and there is not the necessity to have a physical shop.
It is very common to see a lot of companies that offer a new lifestyle, where people will become high income and rewards in return of a constant effort. Furthermore, in the past the product portfolio of the Multilevel companies was mainly limited to kitchen and beauty products. However, today this portfolio has expanded by including home, health and personal care products, as well as food, financial services, among others.
The Direct Selling and Multilevel Companies have grown and maintain the business thanks to their accelerate expansion over the world. Latin-America has been very active in receiving this expansion wave. Each year we see new companies and new products being commercialize though networks of people that want to generate extra income. Our region has become very attractive for this industry and proof of that is that countries like Brazil and Mexico are a benchmark at a global level.
According to the World Federation Of Direct Selling Associations (WFDSA) in 2014 Brazil and Mexico were in the top 5 and 7 respectively in an industry made up of more than 100 countries. Brazil with sales of US$13 Billion and Mexico with US$8 Billion are only outperformed by countries like the United States, Japan, China, Korea, and Germany. More surprisingly, is the pace of growth of these two giants of the region. During the period 2010-2014 the growth rate of these countries was of 10% and 11% respectively, showing that both of them maintain a high and stable growth, something that is difficult to find in other industries these days.
Taking a closer look to the rest of the countries in Latin-America and the annual data provided by the WFDSA, you can see that there is positive information about the region. There are cases like Colombia, with annual sales greater than US$3.1 Billion and a growth rate of 20%. This is the country with the highest growth rate of the region followed by Ecuador with 17% and Peru with 16%.
The enrollment rate of new consultants is also very attractive, as this is one of the most important variables of the industry. In this regard Colombia is also the leading country of the region with 16%, then comes Ecuador with 14% and Brazil with 10%.
To establish a comparison, the United States, the number one country of the industry, has annual sales of US$34.5 Billion and its growth rate during the period 2010-2014 was 4%. This number is not far away from Latin-America, a region with total sales of US$31.1 Billion but with a growth rate of 11% in the same period. This data shows that Latin-America is clearly becoming gigantic in the Multilevel Marketing Industry.
I have had the opportunity of living a first-hand experience with the Multilevel Marketing world by having worked in this business for almost 20 years in Amway, one of the pioneer companies of the industry. I have not only see the entrance and growth of new Multilevel companies during these years, but also the entrance and growth of the people that develop the networks and that turn this business into a life project.
Certainly the industry will keep on the rise in Latin-America and it can be foreseeable that new companies will transform their traditional commercial channels into Multilevel systems. Even those with Latin funds like Natura from Brazil and Belcorp and Yanbal from Peru.
I have no doubt that his progress wave of the Multilevel Marketing has had a great reception in our markets and my projection is that this system is awaking a real interest for companies with Latin funds. I personally have a lot of friends interested in the topic and I frequently get invited to meetings where a business opportunities are presented and those can probably bring me a new lifestyle.
Year by year Latin-America is transforming into the most innovative business strategies and the Multilevel Marketing is trendy in our region.