Calcutta, Nov. 22: Eastern India holds the greatest potential for growth in direct selling, according to an Ernst & Young survey.

At present, the east is lagging behind but is poised for a big leap on the back of greater entrepreneurial activities.

Amway India managing director William S. Pinckney said his company’s growth rate in the east was 40 per cent compared with 20-30 per cent in the other markets. “The east is the emerging market for us,” he said.

The south has become the hub of direct sales. In the E&Y survey of companies affiliated to the Indian Direct Selling Association (Idsa), 58 per cent of the respondents have named a southern state as a top performer.

None of the respondents gave the top billing to an eastern state. The region figured as the third biggest revenue earner among 36 per cent of the respondents.

This is set to change. The survey said a rise in entrepreneurial activities would lead to growth in the east.

The Northeast will be a key region. “The east includes the seven states in the Northeast where direct selling has had a stronghold for some years. Here, growth is faster because opportunities in the Northeast are less compared to the metros. Direct selling is also viewed as a serious way of making a living in this region, which of course it is,” Fredrik Widell, chairman of Idsa and managing director of Oriflame, said.

The size of the direct selling industry in India, excluding insurance, is Rs 3,300 crore, and sales grew 17 per cent in 2008-09. The market is expected to touch Rs 5,320 crore in the next four years.

Among 25 countries, India ranks 11th in the number of sales people and 23rd in revenue generated.

Direct selling companies do not take the usual channel of sales through stores and rely on individuals. The sales people in India earn less than their counterparts in the developed countries, or even in some of the Southeast Asian countries.

India had 1.82 million direct sales people by 2008-09, adding 220,000 in that year alone. Women made up 68 per cent of the sales people.

Expansion does not always mean direct investment by the global giants, said Amarjit Ubhi, vice-chairman of Idsa and country manager of Forever Living Products.

Companies generally involve third parties to make high volume products. The rest are imported.

Nutrition and wellness products sell more in India while elsewhere, it is cosmetics.

Amway is strong in wellness and nutrition products, while Oriflame and Avon are the big names in cosmetics. Pinckney said wellness products for specific complaints were doing well in the east.