The Muamalat Newsletter Vol. 2 2024

FEM eNewsletter | December 2024 60 burden of compliance with minimum wage laws. As companies seek ways to offset the rising cost of labour, the flexibility and lower fixed costs of the direct selling model make it an increasingly attractive option. Businesses can scale up their operations without the burden of substantial labour expenses, enabling them to remain competitive even in the face of wage increases(Seow, 2022c, 2024). On the other hand, the COVID-19 pandemic has had a profound and lasting effect on consumer behaviour, fundamentally altering how people shop, what they value, and how they interact with brands. In Malaysia, as in much of the world, consumers have become more health-conscious, value-driven, and digitally savvy as the economymoves toward post-pandemic recovery (Seow, 2022e). The rise of e-commerce and a growing preference for personalized shopping experiences have further transformed the market. The direct selling business model, with its focus on relationship-building and individualized service, is well-aligned with these evolving consumer preferences. During the pandemic, many consumers adapted to online shopping and home- based purchasing, behaviours that continue to influence their buying decisions today. Direct selling companies, many of which have embraced digital platforms, are well- positioned to benefit from this shift by offering consumers the convenience of remote purchasing along with personalized product recommendations from their distributors (Seow, 2022e). Furthermore, the health and wellness sector—one of the key segments within the direct selling industry—has experienced significant growth as consumers prioritize self-care and well- being in the aftermath of the pandemic (Seow, 2022a). This trend bodes well for the future of direct selling in Malaysia, particularly for companies offering products that cater to these rising health-conscious consumers. Digitalization has been a driving force behind the transformation of the direct selling industry, particularly during and in the wake of the pandemic. By integrating digital tools, direct selling companies have not only expanded their market reach but also streamlined their operations. Distributors now benefit from digital platforms that support sales tracking, customer relationship management, and communication, enabling them to manage their businesses more efficiently and remotely (Seow, 2022d). These platforms enhance both operational efficiency and customer engagement by allowing distributors to maintain strong, personalizedconnectionswithclients through online channels. As digitalization continues to progress, the direct selling model becomes even more appealing, especially in countries like Malaysia, where technology adoption is rapidly increasing. The ability to leverage e-commerce, social media, and other digital tools enables direct selling firms to reach a wider audience without the need for physical storefronts. This reduction in overhead costs, combined with improved profitability, ensures that the model remains sustainable in the face of rising labour costs and evolving consumer behaviours (Seow, 2022d). Nevertheless, the direct selling industry is not without its challenges. It has faced criticism due to its association with pyramid schemes, which has led to regulatory hurdles in various regions. However, Malaysia has put in place clear regulations that distinguish legitimate direct sellingoperations from illegal schemes, offering protection to both consumers and distributors (Seow, 2022c, 2024). As long as companies adhere to these regulations and operate transparently, the direct selling model remains a viable and lawful business option. Misconceptions also persist about the sustainability of direct selling as a long- term business model. Although the industry experiences high distributor turnover rates, it offers substantial economic and social benefits. Distributors gain valuable entrepreneurial experience, develop sales