Amway charts out aggressive marketing plan, ties up with ICICI

The Rs 625-crore directing selling company Amway India (part of the $5 billion Amway Corporation, USA) has embarked on an aggressive growth strategy in India. The target: A growth of 8-10 per cent in the next one year. Amway, which has so far invested more than Rs 151 crore in the Indian operations, intends to achieve its target by launching new products every month, persistent communication and by providing more facilities to its distributors, who are the backbone of its business.

And it is to cater to the needs of this backbone that the company has tied up with ICICI Bank to launch a co-branded international credit card. With this card Amway's 3.5 lakh distributors in India can purchase Amway products, earn and redeem rearward points in the form of Point of Value (PV) of Amway. These PVs are incentive points of Amway, which in turn, determine the total bonus earning of an Amway distributor. The distributor will have the exclusive benefit of earning two points, instead of one, for every Rs 100 spent on purchasing Amway products through the co-branded credit cards. This product will be available at 62 locations across the country.

Talking about the need to partner with ICICI, Stephen Beddoe, director, distribution relations and marketing, Amway India, says, "Amway believes its distributors must succeed first for Amway to be successful. Which is why we keep enhancing the business opportunity for our distributors." Amway has a similar tie up with BPCL for its distributors.

Beddoe is convinced the direct selling market in India is poised for growth and that it has just about scratched the surface. Globally, the direct selling market is pegged at $83 billion. In developed countries such as the United States and Japan, the direct selling market is worth Rs 1,33,500 crore and Rs 1,14,000 (last year) respectively; in India it clocked a turnover of Rs 1,500 crore last year. Countries such as Malaysia and Mexico, which are comparable to India in terms of the potential for growth, reported a turnover of Rs 2,325 crore and Rs 14,750 crore respectively. These statistics are indicative of its growth potential in India.

Indeed, the direct selling market has recorded a steady growth in the country over the past few years. In 1999-2000, the segment was pegged at Rs 893 crore, which grew to Rs 1,402 crore in 2000-2001 and to Rs 1,724 crore in 2001-2002.

To fuel this growth, the company has lined up a range of new products. While internationally, Amway has 450 products, in India only 36 are available. Amway has products in four categories - nutrition and wellness, personal care, home care and cosmetics. From now on, Amway will introduce new products every month. Soon, the company will launch a bath soap and a mouth refreshner spray. Currently, 85 per cent of products sold by Amway are manufactured in the country through five third-party manufacturers. The company is considering setting up its own manufacturing facility.

To increase awareness about its business, the company will soon roll out a campaign (by Interact Vision) saying "There is no one just like Amway". The company has set aside Rs 4 crore as its advertising budget. Interestingly, Amway does not advertise in any other part of the world. "In India, we have resorted to print advertising to demystify our business," says Beddoe. © 2003 agencyfaqs!