Overview of Global Direct Selling Industry Tamuna Gabilaia Executive Director April 17, 2013 Delhi, India Month/Year

Overview  Founded in 1978, voluntary, non-governmental organization  60 Member National DSAs Around the World: Asia – 12, Europe - 30, Latin America – 16, North America – 2  Governing Mechanism: CEO Council  Regional Federation – SELDIA  Doing Business in 170-plus Countries

To build understanding and support for direct selling worldwide. The Federation supports direct selling companies and associations by: – Developing, maintaining and promoting the highest global standards for responsible and ethical conduct. – Advocating the industry's positions and interest with governments, media and key influencers. – Serving as a trusted global resource for information on direct selling. – Facilitating interaction among direct selling executives on issues of importance to the industry. Mission

WFDSA Programs Women’s Economic Empowerment Socio-Economic Impact Studies Reputation Building Studies Corporate Social Responsibility/Philanthropy Surveys APEC Consumer Education and Protection Initiative Global Code of Ethics Initiative Regional Association Performance Seminars Media Outreach/Public Affairs

Socio-Economic Impact Studies Ernst&Young IPSOS Mori Partner Since 2004 WFDSA 24 socio-economic impact studies: Brazil, Canada, Japan, Korea, Mexico, Russia, Taiwan, the US (2005) Czech Republic, France, Finland, Germany, Poland, Italy, Turkey, UK (2007) South Africa, Thailand (2008) Colombia, India (2009) Canada, Chile (2010) Brazil and Ecuador (2011). Australia, New Zealand and Peru (2012)

Global Conditions  Growth expected to dropt to 3.5% in 2013  Gains expected to 4% in 2013 Source : International Monetary Fund

 Advanced Economies 2012 – 1.5 % 2013 – 2%  Emerging and Developing Economies 2011 – 6% % % Source : International Monetary Fund Global Conditions

 Asia still projected at 7.5% on average in  Economic Activity in Middle East and North Africa expected to accelerate  Sub Saharan Africa expected to expand at about 5.5%  Central and Eastern Europe most affected by Euro- crisis Source : International Monetary Fund

Global Annual Retail Sales (USD Billion ) Global Salesforce Size (In Millions) Global Statistical Data

Global retail sales increased 9% year-over-year Global retail sales increased 9%, from US$141.2 billion to billion. The number of Direct Sellers increased 9% from 84.3 million to 91.5 million $141.2 billion 2011 $153.7 billion,  9% ,  9% Sellers = Millions Global Sales & Sellers

11 Sales were UP in all major regions 2011 Retail Sales (US$) 2011 Seller Count Asia Sellers * 52 million,  15% 57% of total Americas Sales $60.4 billion,  8% 39% of total Africa / Mid-East Sales US$ 1.4 billion,  6% 1% of total Europe Sellers 11.4 million,  4% 12% of total Europe Sales US$ 25.0 billion,  4% 16% of total Americas Sellers 26.7 million,  4% 29% of total Asia Sales $ 66.9 billion,  12% 44% of total Africa / Mid-East Sellers x Global Total Sales US$ billion,  9% x Global Total Sellers 91.5 million,  9%  8%  4%  12% * Not including China

In 2011, 2 new countries joined the Billion Dollar Club: In 2011, 2 new countries joined the Billion Dollar Club: Indonesia and Turkey Country 2011 Retail Sales [US$ billions] Number of Sellers (millions) % Sales Growth (Local Currency) 1 United States$  4.6% 2Japan$  -4.7% 3 China$16.3not available  16.2% 4Korea$  4.7% 5 Brazil$  5.2% 6Mexico$  10.2% 7 France$  2.2% 8Germany$  -5.1% 9 Russia$  4.6% 10Italy$ % 11 Malaysia$  30.9% 11Venezuela$  75.5% 13 Taiwan$  3.0% 14Canada$ % 15 Thailand$  8.3% 16Colombia$  14.1% 17 United Kingdom$  -2.0% 18Argentina$  23.0% 19 Australia$  -12.4% 20Peru$  8.0% 20 Turkey$  17.6% 22 Indonesia$  10.0% India $

13 DSA CODE OF ETHICS Who must comply with the Code? DSA‘s Member Companies Sales Distributors Company Employees Code Compliance WFDSA and DSA Code of Ethics

14 DSA CODE OF ETHICS GUIDELINES FOR CODE COMPLAINTS Complaints should be in writing and should Include the following information: The date and details of the incident The individuals involved The code violation (if possible) Efforts made to resolve the matter The cost of the product (including invoices or other documentation) The current status of the complaint Resolution being sought Contact the Company Resolution Directly with the Company

15 DSA CODE OF ETHICS GUIDELINES FOR CODE COMPLAINTS Complaints should be in writing and should Include the following information: The date and details of the incident The individuals involved The code violation (if possible) Efforts made to resolve the matter The cost of the product (including invoices or other documentation) The current status of the complaint Resolution being sought Contact the DSA Code Administrator Resolution with Assistance of Code Administrator If not resolved…

16 DSA CODE OF ETHICS KEY PROVISIONS—COOLING OFF What is cooling off? If a consumer agrees to purchase an item and changes her mind, she has the right to cancel within a specified number of days The number of days varies by country This is called COOLING OFF

17 DSA CODE OF ETHICS KEY PROVISIONS—COOLING OFF The Code of Ethics allows consumers to cancel an order: Without any specific reason Within a specific time limit Your order receipt should clearly state what the policy is in your country

18 DSA CODE OF ETHICS KEY PROVISIONS— EARNINGS CLAIMS Companies and direct sellers cannot provide false or misleading statements about the earnings opportunity Statements made must be documented by facts Source: IPCC

19 DSA CODE OF ETHICS KEY PROVISIONS— PRODUCT BUYBACK Company must not encourage inventory purchases in unreasonably large amounts If you terminate your business, the company will buy back product you haven’t sold – if it is still marketable – less any costs such as handling and commissions

20 DSA CODE OF ETHICS KEY PROVISIONS— PRODUCT CLAIMS Companies or direct sellers must not make untrue claims about a product The skin cancer treatment

21  Global Code of Ethics Program WHAT? Global Code Promotion/Communication Initiative Approved by the CEO Council Demonstrates commitment to your direct sellers and their customers Proactively Communicates Standards of Excellence to External Audiences Raises the Bar on Performance Encourages Ethical Behavior Increases public awareness of the Code WHO? DSA’s Member companies

Global Code of Ethics Toolkit Ethics Toolkit Easy to read copy of Code Short pamphlet summarizing Code Separate materials outlining key takeaways for consumer as well as distributor PowerPoint presentations for use by local DSAs and companies Q&A document for training purposes Wallet sized card for use in the field

Toolkit Outlines key takeaways for Consumers and Direct Sellers The toolkit also contains training materials Q&A Document

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