When Amway gave its first account in India, the country could not realize the scope of venture the brand was bringing with itself. Now acting as a benchmark for all the upcoming direct-selling companies, Mr. William S Pinckney, MD & CEO, Amway India, shares the modus operandi of the direct-selling giants.
Aadeetya Sriram (AS): Tell us about the growth story of Amway in India?
William S Pinckney (WP): Amway commenced commercial operations in India on May 5th 1998. Amway India is a wholly owned subsidiary of the US $ 9.2 billion Amway Corporation, USA. At the time of commencing operations, we had 5 offices, 6 products; 1 central warehouse at Nagpur and staff strength of 50. Today, after 12 years, we have a pan-India presence of 135 offices; 55 warehouses; 127 products; staff strength of about 450 and an active business owner base of 550,000. Amway India recorded a turnover of Rs. 1790 crore for year 2010 – up from Rs. 1,407 crore in 2009.
AS: What are your product categories and their USPs?
WP: Globally, Amway has 450 products in five categories – Nutrition & Wellness; Cosmetics; Personal Care; Home Care and Home Tech. In India, however, we have 127 products in four categories; Nutrition & Wellness; Cosmetics; Personal Care and Home Care. QUALITY of our products is the single most important USP. We manufacture all our products to international quality standards using natural, safe ingredients. It may be interesting to note that in 1959,the year when Amway was born, the very first product, LOC (Liquid Organic Cleaner) was a biodegradable product, at a time when environmental issue was not a concern. Incidentally, LOC is still one of our best sellers.
The other USP is our 100% Money back Guarantee. If, for any reason, a consumer, within 30 days of purchasing the product, feels that the product has not lived up to his/her expectation has the option of returning the product and claiming a refund.
AS: What is the cosmetic buying pattern of Indian women and what is your target group?
WP: Colour cosmetics; lipsticks, nail enamels, eyeliners, etc, form a significant portion of the cosmetics basket. In the skincare segment, however, anti aging creams, skin whitening lotions/creams are recent observable trends.
AS: What changes are you witnessing in Indian Retail and in which direction do you see it going?
WP: If the entry of big retail giants like Walmart, Carrefour, etc, is any indication of the retail scene in India, the retail is just set to explode. It would be interesting to note that Carrefour has set up its first store in India in Delhi. The entry of more established players will give the consumers the choices, companies will battle to provide better service leading to an overall happy customer.
AS: What are your promotional and marketing strategies?
WP: Commencing 2010, we just expanded and strengthened our Nutrition & Wellness portfolio by launching a range of nutritional products in the children’s segment. This was followed by the launch of the Spring Catalogue Range 2011 comprising of a range of Amway coreline products specially packaged for a limited period; and Non-coreline products (co-branded products). Going forward, the year will witness a slew of launches, focused on our two lead categories – Health & Beauty. The year will also witness some exciting product promotions.
On the advertising front, we recently commenced the category advertising on our Nutrition & Wellness brand – NUTRILITE. Going forward, we will also be launching the Beauty category advertisement – both of which will run along with the main Amway mother brand advertisement.
AS: What according to you is necessary to succeed as a direct selling company?
WP: A genuine business opportunity; commercially viable qualitative products backed by an excellent support/training; money back guarantees on business opportunity and products; and of course, a rewarding earnings/incentive programmes are but just some of the “key” necessities to succeed in the direct selling space.
AS: What has the turnover been in the last financial year (overall and India)? What growth has it witnessed from last year?
WP: In year 2010, globally, Amway posted a turnover of US $ 9.2 billion. In the same year, Amway India posted a turnover of Rs. 1790 crore, up from Rs. 1,407 crore in 2009, a 27% growth in 2010.
AS: What are your expansion plans for Amway?
WP: Going forward, Amway India has identified four strategic pillars to drive growth –Business Excellence; Distributor Experience; Consumer Experience; and Products & Brands. Expanding our foot-print to enable our business owners and consumers connect with Amway, we plan to take the total no. of Amway touch points from the current 135 to about 250 over the next 2-3 years. We will also be setting up about 25 Brand Experience Centres over the same period. The product front will witness new products focused on our two lead categories viz, Health & Beauty, aptly supporting by advertising, product promotions, etc.