Country Overview
Peru means diversity. It is one of the 10 most diverse countries on earth according to its variety of ecosystems, species, and genetic resources. This is evidenced throughout the territory: Peru is home to 70% of the world’s biological diversity, with nearly 2 thousand species of birds, 19 thousand species of flora, 39 ecosystems, and 28 climates of the 32 around the globe. It is located in the center of the Pacific coast of South America, a region in which Peru represents the fourth most populous country with about 33 million inhabitants. Spanish is the official language, although according to a study by the National Institute of Statistics and Informatics, 16% of the population has a native language as their mother tongue [1].
Peru is also known as a quintessentially tourist destination. The country has been the winner of the 2021 World Travel Awards in the categories ‘Culinary Destination’ and ‘Cultural Destination’. Machu Picchu, one of the seven modern wonders, was chosen as the world’s leading tourist attraction by this programme. Other tourist destinations offered by Peru include the Nazca lines, Lake Titicaca, and its jungle, which offers countless adventure tourism options. The country is also deemed a popular destination for surfers and mountaineers from all over the world.
Peru: A Leading Country of the Direct Sales Model
The entrepreneurial spirit stands out in many occasions and generates pride among Peruvians. For this reason, it is not surprising that Peru is a pioneer country in direct selling. Some Peruvian Companies, like Belcorp and Yanbal are regional leaders and have expanded to several Latin American countries. Likewise, it is important to emphasize the participation of international companies with recognized prestige such as 4Life, Azzorti, Essen, Fesdy, Forever Living, Fuller Pinto, Herbalife Nutrition, Jeunese, Leonisa, Morinda, Natura, Nikken, Omnilife, Oriflame, Swissjust and Tiens… all of them have strengthened the growth and development of the market.
Peru remains among the 20 direct selling countries that bill more than a billion dollars a year and is the fourth largest country in Latin America in terms of industry billing, according to the World Federation of Direct Selling Associations’ worldwide ranking 2021.
The Peruvian Entrepreneurial Spirit
Direct selling in Peru is very popular thanks to the entrepreneurial spirit of the Peruvians and constitutes a great driver of self-employment and family progress. It is a source of income for about 635,000 independent entrepreneurs [2], who operate in all regions of the country. On the other hand, it is clear that the industry has been key for tens of thousands of Peruvian families during the pandemic, a time when many jobs were seriously affected.
According to a 2021 Ipsos study, Peru ranks the third (out of 28 countries assessed) among the countries with the greatest entrepreneurial spirit [3]. Peru also ranks the second in the region in terms of people having own business or would like to have one (93%), only after Colombia (with 94%), according to a study conducted by OnePoll on behalf of Herbalife Nutrition in 2021.
Direct sales is a channel that generates universal empowerment for all Peruvians. CAPEVEDI’s annual results for 2021 show that 82% of those people engaged in this activity are women and 18% are men. 45% are between the ages of 35 and 54; 38% are between 18 and 34, and 17% are over 55.
In addition, the business model offered by the direct sales channel represents an option for Peruvian entrepreneurs to overcome obstacles such as difficulties in accessing financing or lack of professional experience before starting a business.
Direct Selling: Endless Opportunities in the Digital Age
Another important contribution direct sales companies make in Peru is their constant interest in closing the gaps in the labor market that still exist in the country. Millennials, who make up about a third of the independent entrepreneurs who work with direct sales companies in Peru [4], represent a very attractive segment: On one hand, they reach a wider audience through the use of social networks and new strategies through the Internet; on the other hand, they are a clear sign that the industry has good long-term prospects. In 2021, 9 out of 10 young Peruvians said they either wanted to start a business or already had a business [5].
With the pandemic, many entrepreneurs have transformed and searched for new business models. Many of them took advantage of new technologies and social networks, in line with the strong push for digitization triggered by tha pandemic. This is exactly what happened in Peru. In January 2021, the number of internet users was 2.4 million more than it was in January 2020, with an increase of 3 million new active social media profiles in the same period [6].
These changes helped the industry. By the second half of 2020, direct selling in Peru was recovering at a fast pace. The results of the companies associated with CAPEVEDI showed 24% sales growth at the end of 2021 [7], and all product categories registered a healthy behavior. Confidence in the direct sales business model is growing because it allows economic independence.
About the Peruvian Direct Selling Association (CAPEVEDI)
CAPEVEDI is a non-profit organization with 21 years of history in the market. It brings together the main direct delling companies that are present in the country. CAPEVEDI has 19
member companies which in turn, represent 80% of the industry’s turnover. In 2018, CAPEVEDI as recognized by the World Federation of Direct Selling Associations as a “Platinum Association”, the most important recognition by the Federation, after evaluating the operational and organizational characteristics of its member Direct Selling Associations.
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Written by Luisa Ruiz Mendoza, Administrator of the Peruvian Direct Selling Association (CAPEVEDI). She holds a Master’s degree in international business from has seven years of experience in association management gained at the Peruvian Guild of Cosmetics and Domestic Cleaning and the Peruvian Direct Selling Association.
[1] Source: National Institute of Statistics and Informatics, “Perú: Estado de la Población en el año del Bicentenario 2021” (Peru: State of the Population in the year of the Bicentennial 2021), 2021.
[2] Source: Annual results 2021 provided by companies associated with CAPEVEDI.
[3] Source: Ipsos, “Entrepreneurialism in the Time of the Pandemic”, 2021.
[4] Source: Annual results 2021 provided by companies associated with CAPEVEDI.
[5] Source: Herbalife Nutrition and OnePoll, 2021.
[6] Source: Branch, 2021.
[7] Source: Annual results 2021 provided by companies associated with CAPEVEDI.
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