Direct selling in Malaysia

Organisational Behaviour Associated With Emotional Contagion Among Direct Selling Members

Junaidah Hashim

Department of Business Administration,

Kulliyyah of Economics & Management Sciences,

International Islamic University Malaysia, Kuala Lumpur, Malaysia

Saodah Wok

Department of Communication,

Kulliyyah of Islamic Revealed Knowledge and Human Sciences,

International Islamic University Malaysia, Kuala Lumpur, Malaysia, and

Ruziah Ghazali

Nordant Management Sdn. Bhd., Kuala Lumpur, Malaysia

Direct Marketing: An International

Journal

Vol. 2 No. 3, 2008

pp. 144-158

Direct selling in Malaysia

Worldwide sales turnover in the direct-selling market was estimated at more than USD80 billion in 2000, with the Asia-Pacific region contributing some 52 per cent. Statistics from the Trade Ministry of Malaysia have shown that Malaysia is one of the 14 countries in the world that has a turnover of one billion USD annually from the multi-level marketing (MLM) industry. The value of the direct selling industry in Malaysia was USD1.02 billion in 2002 with more than one million sales people and about 700 licensed direct-selling companies. The prospects for this industry are promising, with annual growth of 10-15 per cent. The most popular mode of direct selling business is multi-level marketing. Products marketed under direct-selling organisations include food supplements, healthcare products, cosmetics, kitchen ware, clothes, and undergarments. About 75 per cent of sales were contributed by Dart Far East Private Limited, Amway and Avon. Avon Cosmetics (Malaysia) Private Limited was established 26 years ago. Today, it is the leading cosmetics company in Malaysia with a network of 220,000 Avon dealers and 169 Avon beauty boutiques nationwide (http://findarticles.com/p/articles/mi_qn6207/is_20000426/ai_n24903260).

The distinguishing characteristic of direct selling in terms of marketing is that the direct seller or retailer initiates contact with the potential customer instead of waiting for the customer to come and make purchase at a store or some permanent place of business. The direct seller or direct retailer therefore is a person who sells consumer products and renders services by direct personal contact with the consumer – usually, but not always at the consumer’s home. While some direct sellers or retailers may be employees of a direct sales company, and are authorised to act for the company in business matters, most direct sellers or retailers are independent business operators or are self-employed; and they enjoy the advantage of deciding when and how much time will be devoted to selling the company’s products.

In the direct selling business, it is a common practice to acknowledge distributors’ outstanding sale performance. A grand occasion celebrating and awarding top achievers with various incentive rewards, including cash or cheque, travel packages and merchandise is typically held to celebrate top achievements. The top achievers are usually given the opportunity to share their happiness and joyous feeling through delivering inspirational and motivating talks with the purpose of inspiring and motivating others to be successful also. It is noteworthy that the winning feeling of the top achievers appears to be contagious on other members and it is able to influence them to work hard and emerge as top achievers as well.