Factors that Influence Direct Selling in the Cosmetic Market

Abstract

This paper investigates the relationship between direct selling in the cosmetic market and influencing factors. A hypothesized model was developed based on both indicator data analysis and related literature. The indicator data from the World Bank and Euromonitor covers 59 countries, including top leading market share countries (Peru, Mexico, Argentina, etc.). In study, data were estimated by a multiple regression model to determine the probability of direct market share. The principal finding is that direct selling is influenced by cultural aspects. In the culture that has strong market share of direct selling, people tend to conceal their personal goal for the benefit of the majority and to maintain a good relationship with the group. As discussed earlier, cultural effects toward direct selling were tested by using surveys from salespersons or possible consumers. Due to difficulty of doing questionnaires in many countries, past studies are limited to just a few countries, commonly not more than two. This study tried to further the research of early studies by using numerical indicators from 59 countries. In addition, much of the previous research was a great reference for determining more credible standards to select the studys variable indicators. Several indicator factors are related, including alternative market channel purchases, information from the internet, kinship culture, and high population density. The beauty cosmetic market is growing rapidly and the market share of direct selling is too large to be neglected. This work also offers guidance to companies that might benefit from the strategic use of starting direct-selling businesses in new regions.