In Malaysia Direct-Sales and Multi-level-marketing MLM companies are often interchangeably used as terms. Some of the examples below are MLM Companies alongside direct sales companies with a maximum of 5 layers as governed by KPDNHEP
According to Euromonitor Malaysia is one of the most promising markets for direct selling in Southeast Asia. The sector has seen rapid growth over the past few years, with retail value sales reaching MYR21.5 billion in 2016. This figure is projected to grow by 12% in current terms to MYR26.9 billion by 2021. Amway (M) Sdn Bhd is the leading player in the market, with a retail value share of 6% in 2021.
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Retail value sales grow by 12% in current terms in 2021 to MYR26.9 billion Amway (M) Sdn Bhd is the leading player in 2021, with a retail value share of 6% Retail sales are set to rise at a current value CAGR of 4% (2021 constant value CAGR of 2%) over the forecast period to MYR32.8 billion
2021 Developments, MLM Malaysia
Strong demand for shopping experiences with the personal touch boosts sales
Direct selling was one of the only retailing categories in Malaysia to avoid negative sales growth during the peak of the COVID-19 pandemic in 2020. In fact, it continued to grow significantly in 2021, with double-digit value growth recorded both years. The main reason for the category’s success during the pandemic is that many of the non-grocery retailers had to close down completely during quarantine lockdowns, while restrictions were imposed upon their ability to operate at full capacity. For Malaysians, mlm e-commerce was the go-to non-store retailing channel when stores closed. However, many people still crave that personal touch. Since e-commerce doesn’t offer many chances for retailers to connect with customers on a personal level, direct selling became the better option for consumers searching for more individualized service. In addition, the top direct sellers are all engaged in e-commerce, which gave them an edge against other e-commerce businesses that don’t also participate in direct selling.
Increasing demand for consumer health products supports growth for Herbalife
The increasing focus on healthy living that is being seen among the Malaysian population has supported strong growth in a wide range of categories across consumer health and health and wellness food and beverages. While this trend was already building prior to the onset of the COVID-19 pandemic, the harsh realities of the pandemic situation have motivated many consumers to pay far more attention to their general health and, in particular, their immune system function. Within this context, demand for vitamins and dietary supplements has increased, a trend which has been very positive for direct selling due to the prominence of companies that specialise in such products, notably the category’s fourth leading player Herbalife. Herbalife continued to register a very strong performance in 2021 as consumers flocked to its wide range of very well-regarded vitamins and dietary supplements.
Amway performs well as demand for its consumer health products increases
Amway’s consumer health products are in high demand, and the company is doing well as a result. Amway was the top performer in its category during 2021, with substantial increases in sales and profits over the course of the year. The company’s strong performance towards the end of the review period was due mainly to increased demand for its consumer health products during the COVID-19 pandemic. As mentioned earlier, Malaysians have started to become more cautious of the food they consume and their overall health. This is due to the ongoing pandemic as people are looking for ways to avoid getting sick. Amway’s sales for consumer health products, such as multivitamins and vitamin B complexes, have increased this year because these products help strengthen immunity.
PROSPECTS AND OPPORTUNITIES
Customer loyalty and increasing health consciousness set to support sales growth
Because direct selling provides loyal customers with positive growth, it is predicted to continue expanding. This is especially true for the category’s leading players as people begin spending again after the pandemic starts to subside. The personal relationships that direct selling agents have with their customers is essential for all companies in the direct selling industry. These deep connections lead to customer loyalty, and likely ensure thatdirect selling will remain one of the most significant forms of non-store retailing Malaysia in coming years. Furthermore, the newfound health awareness brought about by coronavirus is anticipated to continue boosting Malaysians’ vitamin and supplement intake, with direct selling companies specializing in these items poised to be some of the strongest performers in their category throughout the forecast period.
Category leaders expected to face stiffer competition from smaller companies
In the past, large companies have generated most of the growth in direct sales. However, this is expected to change soon as smaller businesses such Shaklee and Atomy start doing better than their bigger competitors. Shaklee and Atomy are expected to excel in the coming years due to their focus on consumer health, beauty, and personal care–all categories that will see significant growth in direct selling. Additionally, these smaller companies’ investment in e-commerce bodes well for their future sales.
Increasing shift towards e-commerce likely to provide strong growth opportunities
In the last few years, a crucial change in direct sales has been that top companies now depend more on digital marketing and e-commerce to connect with customers and stay competitive. With e-commerce booming, it’s no surprise that direct-selling companies are eager to jump on the bandwagon and capitalize off consumer interest. In addition to providing an excellent digital marketing platform and streamlining the sales process, e-commerce is also incredibly useful for direct selling companies. Moreover, it’s anticipated that lesser-known companies will excel in direct selling as more retailers focus on consolidating their e-commerce and direct selling efforts. Hai-O is expected to be a lead player in this domain.
Summary of the Top 5 MLM Malaysia, Direct Sales
|Amway (M) Sdn Bhd||6|
|Cosway (M) Sdn Bhd||3|
|Nu Skin (M) Sdn Bhd||2|
|Herbalife Products (M) Sdn Bhd||2|
|USANA Health Sciences Sdn Bhd||2|
|Tupperware Malaysia Sdn Bhd||2|
|Mary Kay (M) Sdn Bhd||1|
Summary of the Top 4 Product Categories for MLM Malaysia, Direct Sales
|Category||Value (MYR Millions)|
|Consumer Health Direct Selling||2,448.00|
|Beauty and Personal Care Direct Selling||1,651.90|
|Homewares and Home Furnishings Direct Selling||508.9|
|Food and Drink Direct Selling||256.7|
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