COVID-induced lockdown has turned out to be a money-spinner for Pune-based direct selling firm Netsurf Network.
The company has registered a turnover of Rs 100 crore in 100 days, starting April 10, 2020, driven mainly by healthcare and agricultural products, Sujit Jain, Founder, and Chairman and Managing Director of Netsurf Communication Pvt Ltd, told Moneycontrol.
There’s more. In the last four months, despite the lockdown, 2,31,600 direct sellers have started their business with the Netsurf Network, Jain said.
The company, he says, now has a customer base of more than 2.5 million, in India.
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In India, the direct selling industry has clocked a turnover of Rs 18,144 crore in 2019, and it is dominated by players like Amway.
A direct selling company sells products and services directly to consumers, without any fixed retail location. They market their products through independent sales representatives’ person-to-person.
What does Netsurf offer?
Netsurf offers more than 60 natural and herbal products in five categories-- health care, personal care, home care, colour cosmetics and agriculture.
Healthcare and wellness products that constitute 33 percent of the company’s overall turnover are sold under the brand Naturamore, while agricultural products that form 56 percent is sold under the brand BioFit.
For instance, Naturamore has products that help build immunity and nourishment, while Bioﬁt has a range of products that promotes organic farming and increase in agricultural output.
Personal care products are offered under the brand Herbs & More, and Home Care products under the brand Clean & More.
The company’s entry into the scene
Started in 2001 as a small direct-selling company of software products, Netsurf Network expanded its arena in less than two decades to register a turnover of Rs 275 crore in FY20. It entered the US and has plans to expand its business to Thailand now.
“As a direct selling company, we had around 75,000-1 lakh people joining our business every year from 2013-14 till 2017-18.
Netsurf products are formulated in in-house R&D labs and manufactured at the company’s plants in Himachal Pradesh, Maharashtra and Uttarakhand.
The company has reached across all 29 states, and six Union Territories, and Jain said its next goal is to execute an integrated strategy for further market penetration.
Jain also pointed out that the company has achieved a 50 percent corresponding year-on-year growth in the first quarter of 2020.
The hot seller
Netsurf Network has seen health care as the most growing category during COVID-19.
“Health care or nutrition has been the highest selling product range in the direct selling industry, with a share of 36 percent in sales across the world. However, we have seen an even steeper graph of sale for this range during the lockdown,” Jain said.
Jain pointed out that people shifted their focus on health-care products considering the importance of health-building, immunity, and fitness to stay healthy with the infection spreading rapidly.
Recently, the company launched four products in the healthcare space-- Naturamore Eye Care, Naturamore Women’s Wellness, Naturamore De-stress, and Natura Immune Plus, which have garnered a robust response.
Apart from healthcare products, the company has also sold agricultural products. During the lockdown, Netsurf launched one product within this category--BioFit Encounter, which also witnessed a strong response.
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Having achieved Rs 275 crore turnover in FY20, Netsurf is eyeing a turnover of Rs 450 crore in 2020-21, and a multi-fold percentage of growth thereafter.
The company’s ambition does not end there. By the year 2025, it plans to touch a turnover of Rs 2,000 crore, post which, it is planning an initial public offer (IPO).
The company is currently working on opening more manufacturing plants in India.
Selling during lockdown
Considering the changing lifestyle and the means of socialisation due to COVID-19, technology is going to play a lead role in direct selling very soon, believes Jain.
“Looking at this, we have built the entire business process for direct sellers on a Web-based platform and on our app and transformed the entire business from door-to-door to screen-to-screen. This offers the ultimate convenience to our direct sellers and melts down their geographical boundaries to expand their business,” he said. People have realised the importance of direct selling as it lets them work from home at their convenience.
In the last four months, the company has sold 70 percent of its products through its mobile app.
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Jain believes that the economic slowdown, shutting small scale businesses, uncertainties around income, rising unemployment, and pay cuts are the compelling reasons for people to consider an additional income option like direct selling during this pandemic.
Direct selling market
As per the Global Direct Selling-2019 Retail Sales Report by Washington-based WFDSA, India has recorded the highest year-on-year growth rate of 12.1 percent, and the highest CAGR of 16.3 percent over the last three years, among the top 20 direct selling markets across the globe.
In terms of the number of direct sellers, India has been ranked sixth, providing employment to 57.50 lakh people. Jain expects this turnover to grow to Rs 65,000 crore by 2025, Jain said.