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The Warsaw Voice » Business » December 3, 2008
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Direct Sales Market Growing
December 3, 2008 By A.R.    
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The direct sales sector is beginning to play a significant role in the Polish economy. Companies in this sector are reporting profits and have wide scope for development.

Last year the sector, which took off in this country in the early 1990s, notched up sales of over zl.2 billion, according to a report prepared by CASE-Doradcy consultants for the Polish Direct Selling Association.

The companies polled are association members who jointly account for some 80 percent of the sector's sales. Last year, their average gross profitability was 8.2 percent, with net profitability at 6.6 percent.

"In 2007, the total value of direct sales in Poland increased by 5 percent, and this year the market may grow by up to 6 percent," said Mirosław Luboń, director-general of the Polish Direct Selling Association.

Nearly 700,000 people, or 5 percent of Poland's labor force, work in direct-sales companies. For some 140,000 of them, this work is their basic source of income, according to the report.

Cosmetics are the most popular products among those sold in Poland directly. This explains why cosmetics companies such as Avon, Oriflame and Amway lead the way in the sector. Also, direct sales of household appliances, by companies such as Polish-owned DLF, are growing stronger, the report says.

"Direct sales of household appliances are growing fast: until recently household appliances accounted for 9 percent of the market; today the figure has grown to 14 percent," said Maciej Waszczyk, vice-chairman of DLF. "We estimate that in two to three years we will catch up with Western Europe, where household appliances account for some 25 percent of the direct-sales sector."

The average consumer in Poland spends only $22 annually on products bought in the direct selling system. Poland accounts for only 3 percent of the European direct-sales market, according to the report.
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