By DAVID TAN
davidtan@thestar.com.my
Association sees 5% growth in collective revenue
GEORGE TOWN: Direct Selling Association of Malaysia expects its collective revenue to exceed RM3.6bil this year, representing an increase of about 5% from a year ago. Its president Paul Yee told StarBiz that the association was aiming for a single-digit growth as the country's gross domestic product (GDP) was projected to expand by 5.5% this year compared with 7.2% in 2010.
Yee said that last year, collective revenue stood at RM3.48bil, which surpassed the association's target of RM3.1bil. “We were able to surpass the target because there were more direct sellers making direct selling their main source of income rather than just doing it on part-time basis. “This shift in mindset has encouraged more people to join the industry. Exclusive and quality products offered by our members as well as aggressive marketing and sales programmes also contributed to the rise in revenue,” he said.
Zhulian staff working at a costume jewellery production line at the company’s factory in Penang On whether the association is able to generate RM8bil revenue by 2015 as targeted by the Government, Yee said it was on course to achieve the target.
“Dietary and herbal supplements are the biggest contributors to the sales of our members. “These products made up 36% of 2010 turnover, followed by cosmetics at 19% and home appliances 17%,” Yee said. Currently, there are about 4.25 million direct sellers in the country compared with four million in 2009.
“This year, it should remain at around 4.25 million, as the number has stabilised. “In fact, the number of direct sellers in Malaysia hovered around the 4 million-mark for the past few years and only in 2009/2010 that it rose to 4.25 million,” he said.
Yee said the association was targeting four new member companies by the end of 2011 and this would increase the membership to 60 from 56 presently. “The recent DSAM Convention 2011 with the theme Direct Selling Beyond Malaysia', which provided an insight for direct-selling companies to venture beyond the Malaysian market, was very well attended.
“This indicates that there are many direct-selling companies ready to expand abroad,” he said.
Meanwhile, Zhulian Corp Bhd managing director Teoh Meng Keat said the company was now doing a feasibility study to establish distribution networks and warehouses in new markets such as Laos, Vietnam and the Philippines. Some 50% of the company's revenue is generated from overseas.
“For our first quarter ended Feb 28, 2011, we registered a flat growth over the corresponding period in 2010. We will increase selling prices to offset the impact of a stronger ringgit to protect our margins. “We expect to register single-digit growth in sales for the financial year 2011,” Teoh said.
He said Zhulian would launch three types of health supplements in the second quarter for overseas and domestic markets. He said the central region of Malaysia still generated the bulk of the company's sales, followed by the north and south. “Our warehouses in Kuching and Kota Kinabalu are also contributing to the growth,” he added.
