Conceptual Framework

This study has anchored the concepts of authors to discuss the impact of covid-19 to

direct selling companies.

Chandiok (2020) stated that direct selling has been in practice since the 20th century

providing a non-traditional successful income-generating model to earn a living. Unlike retail

counterparts, direct selling provides non-public demonstration and clarification of products,

domestic delivery, and ensures beneficiaries delight on comparatively low-value modules.

Moreover, Chen (2006) said that direct selling is a way that the manufacturer or the product

importer sells the product directly to the final consumer and it is a process of face-to-face

communication between two persons.

Due to the infectious nature of COVID19, the government sets a limitation to face-to-face

interactions, which is one cause of the problems of the entrepreneurs in direct selling since direct

sellers depend on face-to-face interactions (Donthu, 2020). In the recent study of Fields (2020),

he eloquently stated that with the abrupt loss of demand in direct selling markets, it is critical to

evaluate and shift strategies. Growing market share will be the focus to generate revenues and a

successful direct seller in a competitive marketplace will quickly evaluate to devise and execute

plans to impact market share. In addition, Paysafe (2020) said that a disruption can be a great

time for direct sellers to reflect on new ways of reaching customers. One of the essential

strategies a direct seller must do is to create room to map various scenarios in order to shift

rapidly as the business environment changes.

According to McKone and Evans (2020), the impact of the COVID-19 outbreak on the

direct selling industry expects to be significant. In fact, in a survey designed by L.E.K. to track

pandemic-associated shifts in 2020, customers have already mentioned significant decreases in

month-to-month spending throughout numerous classes relevant to the direct selling channel. For

example, consumers have reported spending 15%-20% less on beauty products. Financially,

people reduce consumption due to a changed perception of risk (Sharma & Sonwalkar, 2013;

Mogaji, 2020). Most of all, during an economic crisis, the household reduces its consumption

which means that consumers prioritize necessary products and switch to cheaper substitutes

(Sharma & Sonwalkar, 2013). For a lot of direct selling businesses, this means that sales will

start to drop (Srinivasan & Lilien, 2009).

However, not all the news is bad for direct selling. Other categories, such as nutritional

supplements, are actually seeing greater spending than they did before the crisis. What’s more,

the consumer reconditioning that occurs in a health crisis of this sort is likely to renew interest in

wellness categories (McKone and Evans, 2020). In fact, health has emerged as a key focus for

consumers readjusting to their “new normal.” And after months of social distancing, consumers’

approach to fitness and wellness products may be permanently altered (Chiquoine, 2020).

According to a recent McKinsey survey, consumer adoption of health soared from 11% in 2019

to 46% in 2020, largely due to the COVID-19 epidemic. McKinsey also estimates that virtual

healthcare has the opportunity to represent up to $250 billion in healthcare spending (Shin,

2020).

As stated by Borges (2020), amidst such an unprecedented sanitary crisis, direct selling

companies have recognized the need to look over and revise their product strategy to respond to

consumers’ new, urgent demands. For instance, direct selling players in the splendor and

personal care areas like O Boticário, Avon, and Natura have centered on the manufacturing and

retailing of merchandise associated with COVID-19 prevention, such as hand sanitizers and face

masks. Furthermore, Geneva (2020) said that direct selling companies will need to formulate
coping strategies to support essential segments and preserve jobs. In doing so, they need to

consider the benefits of these strategies for enhancing productivity, innovation and the wellness

of consumers. As direct sellers shift their strategies due to the impact of COVID-19, they are

quickly adapting to a new set of consumer behaviors and understanding just how vital

ecommerce solutions are (Estay, 2020).

In a study conducted by Rallyware (2020) it was revealed that one sector, while also

impacted, has remained strong and has even emerged as a viable career solution for many as a

result of this pandemic, is the direct selling industry. Built upon the backs of a distributed

workforce and already very much used to operating given off-site conditions, those involved

with direct selling were well-versed when it came to adapting to the new normal. However, an

economic crisis or recession will most definitely create changes in the business activity and

strategies for the organization (Yılmaz, 2019). Hence, empirical results from a study by Campo

et al. (2014) proved that companies in the direct selling industry primarily should focus on

creating strategies in order to survive in times of crisis.

The impact presently encounters by direct selling companies as presented statements

above are inevitable result of the COVID-19 pandemic. Productions and sales of different direct

selling companies in the country including direct seller in Ozamis City were affected during this

pandemic. As the local government commanded social distancing protocols, quarantine, and

lockdown. Direct selling companies had to implement new strategies for them to survive from

the impact brought by the covid-19 pandemic. Hence, this study will also be a basis for future

researches.