Direct-sales industry to suffer rough 2nd half

Paiboon, who is also president of Giffarine Skyline Unity, estimates sales growth of 6-7 per cent for the Bt45-billion industry, down from an earlier forecast of 10-per-cent growth.

"The present economic situation is even worse than it was in 1997, when the situation affected only some industries and big companies. Today, the situation is hurting all businesses, and only the strong can survive. It's similar to the sub-prime crisis in the US," she said.

She said consumers were less confident about spending, because prices of many consumer products, especially rice, kept rising.

"Small firms are experiencing big problems, while large companies are cutting their growth forecasts. Mid-sized direct-sale companies with revenue of Bt100 million to Bt800 million still predict good performances," Nalinee said.

The TDSA is trying to help its 29 members survive, but they should also be very careful in managing their financial situation. They should strengthen their support for their independent sales representatives, because they are being hit by rising oil prices.

Giffarine itself has increased its product prices 5-10 per cent this year and is trying to adjust its business to meet the changing situation, she said. In terms of performance, the company recorded 10.78-per-cent sales growth in the first half of the year, slightly higher than its target of 10 per cent.

Nu Skin Enterprises (Thailand) is also revamping its business plan, due to concerns about the economic situation. The company has increased incentive programmes from once a year to three times. It has maintained prices at current levels despite a 10-per-cent rise in costs.

However, the company saw first-half sales grow 10 per cent, up from 6 per cent in the same period last year. It also gained more independent sales representatives.

Nu Skin general manager Pakapun Leevutinun said due to the economic situation, people were taking on second jobs to help secure their financial stability.

Regarding the TDSA itself, Nalinee was re-elected president for a second term from this month.