[Direct Report Network Beijing October 25th] (Direct report network)Over the past few years, the performance of the direct selling industry has declined dramatically. In 2018, the performance of the direct selling industry may be 3-5 percentage points lower than the previous year. There are many reasons for this problem, but the direct selling enterprises are not good at demand side management, is a very important reason.

Supply and demand are two basic aspects of the inner relationship of market economy, and both sides of supply and demand are also two basic means of managing and regulating economic development. Only by adhering to the main line of pushing forward the structural reform on the supply side, appropriately expanding the total demand and coordinating the promotion of both ends of supply and demand can China's economy go far and steady. As far as direct selling industry is concerned, supply and demand are not either one or the other. The reason for the decline in performance is not the one-sided problem on the demand side or the supply side, but the insufficient effective supply and the mismatch of supply and demand structure. Therefore, taking the management of demand side as the basis of supply side reform is an important prerequisite for further expanding the scale of direct selling market. There is no limit, Amway, perfect, and why the performance of the new era has been steadily rising.

I published in 2007, "China's Direct Selling Economics" on this issue had a special exposition, that the decline in direct selling economic growth, may be insufficient demand, or may not keep up with the supply, to specific problems to the right remedy. In a complex economic environment, the key is to consider both costs and benefits, not to confront demand and supply. At present, in the case of a serious decline in the performance of the direct selling industry, whether the direct selling enterprises should focus on the supply side or the demand side should make a choice according to the macroeconomic situation. The government puts forward the supply-side structural reform as the main line and the main direction of attack. It does not neglect the demand-side reform and management. In fact, it releases the demand potential through the demand-side reform. It will not contradict the supply-side structural reform, but can promote and complement each other. Therefore, it is very important for direct selling enterprises to focus on demand side management, because this is the top priority to solve the decline in the performance of the direct selling industry.

We should understand that supply side structural reform is related to the overall situation and long-term relationship. At present, the performance of China's direct selling industry is declining, although there are cyclical and aggregate factors, but the root cause is a major structural imbalance. To solve the problem of direct circulation of the direct selling economy, we must adhere to the structural reform of supply side as the main direction. For example, with the continuous improvement of people's living standards, consumer demand structure for direct-selling products to accelerate the upgrading, and supply structure adjustment is relatively lagging behind, consumers of some serious homogenization of direct-selling products less and less. This tells us that the ultimate goal of the structural reform on the supply side of direct selling enterprises is to meet the demand, and the main direction is to improve the quality of supply. Strengthening the management on the demand side and boosting consumption upgrading through improving the quality of supply are very important contents of the structural reform on the supply side. This is a very common economic principle.

In my opinion, to promote the structural reform of the supply side of direct selling enterprises, we must make good use of the important tool of demand side management, so that the supply side reform and demand side management complement each other and complement each other. Keynes holds that the so-called "effective demand" refers to the total demand when the total demand and total supply of society reach a balance state. Therefore, demand is composed of two basic elements: the desire to buy and the ability to pay. Neither the ability to consume nor the demand nor the ability to pay can produce demand, at least not effective demand. Therefore, to achieve steady growth in direct selling industry, we must rely on demand stimulation. That is to say, without the growth of demand for direct selling products, the steady growth of direct selling industry can not be reached. Based on this understanding, we should do the following work well: first, direct selling enterprises expand the demand for direct selling products by creating effective supply; second, direct selling enterprises provide consumers with higher-grade consumer goods through industrial upgrading; third, through reducing the actual cost of direct selling enterprises to stimulate the country by increasing supply and decreasing prices Internal demand. In a word, only by bringing large-scale and sustainable high-quality demand to consumers through DSM, can direct selling enterprises promote the growth of direct selling industry and the effective growth of its performance.