Multi-level marketing (MLM) or network marketing is a popular business model in several parts of the world. With its initial success in the West, especially in the US, network marketing soared to new heights as a top-grossing business vertical. Today, when we look at the facts and figures put forth by leading MLM companies, it surprises us to see the kind of revenue that network marketing businesses are making.
In the past decade, however, the business of network marketing has faced considerable flak from the public and the regulatory institutions. Several direct selling companies, who were emerging successful, were compelled to be shut down due to the growing misrepresentation of this business model as a pyramid scheme.
Even so, the future of the network marketing industry looks promising. There are thousands of direct selling enterprises that are striving hard to reach those exceptional sales figures. Millions of brands are becoming actively ready to partner with network marketing companies. Product portfolios are being revamped, and the industry is also witnessing a strong uptake owing to the integration of social media and online marketing technologies.
In 2020 and beyond, the network marketing industry is slated to remain one of the highest-earning industries in the global economic diaspora. Here are some of the key industry statistics associated with network marketing, reflecting its growth in the past year and predicting its rise in this year.
Network Marketing – Top 10 Industry Statistics for 2020
With the success stories piling up, more companies are becoming involved with the network marketing business model. SMEs are preferring the distribution of their goods through network marketing companies, primarily due to low investment and comparatively high returns.
The following statistics showcase the current as well as the forecasted growth of the network marketing industry in the world:
1. Network marketing or direct selling is one of the oldest business models.
The method of promoting and selling products by communicating with people has been around for ages. It is one of the most trusted ways of generating customer base. In times when there was no technology or an omnipresent mode of communication, entrepreneurs used to conduct marketing activities by spreading the word, asking help from others, appointing people as promoters, etc.
2. Network marketing companies are operating successfully in over 100 countries
Due to its success rate, almost every country welcomes the network marketing business model. There is no strict law that bans an MLM company from operating in any country in the world. The flexible operability of MLM businesses makes their entry into international trade a lot easy. Network marketing is prevalent on all continents and is widely operated in developing and developed countries. Some of the key countries witnessing the success of network marketing include – US, UK, China, Canada, India, Germany, South Korea, Brazil, and Japan, among others.
3. Promoting through MLM activities is more profitable
The initial investment or capital required for promoting your products via a network marketing business model is significantly low. In addition to this, technological adoption and network marketing software have made these businesses more cost-effective. As a result, the profit margin increases, and companies can stay profitable with the MLM approach.
4. In 2019, the global network market industry was valued at US$ 167 billion
According to leading international trade reports, it has been estimated that the overall valuation of the network marketing industry had surpassed US$ 150 billion by the third quarter of 2019. Growing diversity in product portfolios and increasing participation of self-employed marketing professionals have driven the industry’s growth to date.
5. By 2020-end, the global network marketing industry is set to touch US$ 200 billion mark
In 2020, network marketing businesses from around the world are slated to bring in an estimated US$ 200 million every day. This staggering number is supported by the increasing cut-offs and commissions paid to distributors and direct sellers. Products will be manufactured at a low cost, which will increase the scope of profits on their selling prices.
6. Annually, every network marketing professional gets an average earning increment of $300
By working full-time, an individual is earning more in network marketing than in other marketing vertical. Since there is no limit to the number of people recruited in a network, these professionals can take the extra efforts to expand their networks beyond the conventions. Even at a 25% success rate, these professionals are able to sell an average of two products per day, making their monthly commissions over $500.
7. China, US, and South Korea are the top markets
China is the largest marketplace for MLM, surpassing the US in the recent past. The economically-progressive country is spearheading the global marketplace for network marketing with its compliant trade policies and customer protection laws. South Korea is also among the top countries to witness stimulating growth in the direct selling industry.
8. Four out of five MLM businesses are growing rapidly
The success rate of MLM companies has gone up to 80% from 25% in the past five years. Currently, there are several companies operating as established players in the network marketing industry. These companies started out with just a handful of promoters. Now, they’ve expanded their networks across multiple countries.
9. FDI policies are offering a retaining environment for network marketing
One of the biggest economic boons to the network marketing industry is the support of Foreign Direct Investment (FDI) policies. There are several countries that welcome foreign investors in boosting the growth of MLM companies. This helps the industry attain sustainable growth.
10. By 2025, the global network marketing industry is likely to be worth nearly US$ 650 billion
It has been reportedly forecasted that the network marketing industry can witness a year-on-year growth of over 20% in the coming years. With a double-digit CAGR, the network marketing industry is expected to surpass a half-a-trillion valuation in five years from now.
Based on the above stats, it is but obvious that as an industry, network marketing will have a great future. The statistics showcase the excellent potential for individuals to earn through this business model. With the influence of AI in consumer behavior analysis, the network marketing activities are also likely to be modernized in the near future. Overall, the network marketing industry will witness top-notch growth in the years to come.