mway India plans 170 new branches by 2013

Tushar Pawar | 2010-04-14 01:13:00

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Amway India Enterprises Pvt Ltd, a major direct selling FMCG Company in the country, is
planning to open 170 new branches across the country in the next three years (by the year 2013).
The company is also eyeing 25 per cent year-on-year growth for the next five years.
Presently, the company has 130 branches across the country. The company offers 115 products
in five categories- Personal care, Home care, Nutrition & Wellness, Cosmetics and Great Value
products. Nutrition & Wellness segment contributes around 50 per cent of Amway India’s total
turn over.
"With an aim to strengthen our network base, we are planning to increase the number of touch
points (branches) upto 300, by adding 170 new branches across the country in the next two-three
years. We are also planning to launch 6 to 8 new products every year," William S. Pinckney, MD
& CEO, Amway India, said at a press conference during plant visit of reporters to its Baddi
facility in Himachal Pradesh.
With an aim to meet the market demand, the company has just tripled the capacity at its contract
manufacturing facility in Baddi (Himachal Pradesh) at an investment of Rs. 55 crore.
"Amway’s focus in the past 2-3 years was to improve consumer access and awareness, which
paid off handsomely. We have grown from Rs. 799 crore in 2007 to Rs. 1407 in 2009 crore over
the past three years, essentially as the quality of the Amway pick-up centres has undergone a sea
change, and is more experiential for the consumers. We are eyeing 25 per cent year-on-year
growth for the next five years," Pinckney said.

What Amway learnt in India

April 13, 2005 06:59 IST

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Strategic mistakes I made in India [ Images ]? Where do I begin? Seriously,

though, a lot of our India strategy is based on our trial-and-error experiences
here.

Like other multinationals, we've also been guilty of misjudging the Indian market
at times. I came to India in February 1998 and we launched Amway India with
six products in May that year.
Initially, we set up a distribution system that was parallel to what Amway uses in other countries.
That means essentially home delivery of products that are ordered by customers either through
the Internet or on telephone.
The products are reached to the customers' doorsteps within 24 to 48 hours of the order being
placed.
We were fairly confident that the same organisational set-up would work in India as well.
Accordingly, we began with just five offices, in the main metros.
We assumed these would work as pick-up centres, with just a few consumers coming in to pick
up products. In fact, we had factored that just 20 per cent of our sales would be through counter
sales and 80 per cent would be through the home delivery route.
It took just a couple of weeks to prove how wrong we were in our assumptions. We discovered
that people wanted to come into the stores, see the products, pick up and touch them before they
purchased anything. Home delivery [ Images ] just didn't interest them.
We now have 48 pick-up centres and close to 30 local ordering centres, which are located in
smaller towns. We've realised the importance customers place on having contact with people
from the company.
The other learning from that and subsequent experiences is that a 'one-size-fits-all' strategy won't
be successful in India. We have a portfolio of 450 products that are all available in one size each.
Except in India, that is. We realised from our early experiences in India that customers want to
experience the products before they make a purchase decision -- hence the need for more stores.
Similarly, Indians don't like to economy-size packs until they've tried the product earlier.
Accordingly, we launched our cleaning and personal care products in various sizes -- big,
medium, small and even sachets.
That's a first for Amway worldwide, but the different price points encourage different types of
users. We've also been more aggressive promotionally in India than in other countries.
All of which are unlike our strategies in other markets across the world. As a 50-year-old
company, it is easy to become set in your ways. You end up trying to duplicate your other
successes in new markets as well.
But to believe that old successes will drive new ones and to not change your ways -- an attitude
that says "this is how we will do it because this is how we've always done it" -- is wrong.
We have realised that you need to adapt to the market -- the market won't adapt to you.
But perhaps one of the biggest mistakes I made in my career was in significantly underestimating
the partnership between the corporation and Amway independent business owners (those who
directly sell the company's products).
In the corporate sense, we do everything a business does -- we manufacture products and sell
them. But the reality is that these products are sold by independent distributors. And we were
making too many important decisions without considering the viewpoints of these people.
We were trying to do what we thought would be good for them, without taking into
consideration what they knew would be good for them. And if a decision is not entrepreneurially
right, it cannot be right for the business. If you can't get your partners to buy into your vision,
you're doomed.
We learnt this the hard way about five years ago when Amway announced a promotional offer
where we reduced the price on one of our cleaning products. The promotion was hugely
successful, but after it ended there were some negative repercussions.
What happened was this: we reduced the price and even printed the lower price on the package.
But nowhere did we mention that this was a limited-period promotional offer. Existing buyers
would, naturally, be aware of the change in prices.
But after the promotion, when the distributors approached first-time buyers to resell the cleaning
product, they thought we'd hiked prices! If we had taken feedback from the distributors before
launching the product, we would have realised the need to emphasise the promotional nature of
the lowered prices in a way that would be clearly known and remembered.
We realised that we hadn't looked at the promotion from the point of view of the person who
actually sells the product.
The learning? It doesn't matter how smart you are and how many degrees you have. People
always see issues from their own perspective, not yours.
William S Pinckney is Managing Director and CEO, Amway India.
As told to Meenakshi Radhakrishnan-Swami.
William S Pinckney

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Amway India
Amway India is one of the largest direct-selling companies with an aim to connect people
towards a better approach to lead life. The company promotes individual private enterprise
through its pioneering direct-selling approach. All its products and business opportunities are
covered through 100 percent Money-Back Guarantee. Originally, the company was founded by
Rich DeVos and Jay Van Andel, which now operates in excess of 88 territories and countries in
America, Europe, Africa and Asia. The company is a completely owned Alticor Inc.’s
subsidiary.

History
Amway is basically an acronym for "American Way", which was invented by Richard DeVos
and Jay Van Andel. Easy, unique and short to memorize, Amway was registered as a business
trademark and name ever since. The company has successfully established into a leading multi-
level marketing business, based on strong founding principles and values.
Amway India at present is a multi-billion dollar international business symbolizing opportunity
and freedom to thousands of people all over the world. Amway India has approximately 6000
employees all over the world. Moreover, the company boasts of around 3.6 million IBOs
(Independent Busines Owners) across the world.
Vision
Amway India aims at inspiring common people to live superior lives.

Mission
The mission of this company is:
• To facilitate best business opportunities.
• To deliver high-quality products to semi-urban and urban homes in diverse areas of insurance,
home tech, home care, personal care, cosmetics and wellness.
Values
Amway India has established certain principles and values, which binds the entire organization
as well as various business owners, associated with the company.
Achievements
• Introduction of LOC Cleansing Product in 1959.
• Launched SA8 Laundry Detergent in 1960
• Nutrilite product was introduced in 1962
• State of the art cosmetic plant was launched in 1984
• Introduction of online beauty & health sales business 2.0 magazine in the year of 2001
• In 2003, the company started “One by One Campaign for Children”.
• At present, the company is a global leader in beauty products.
• The company is active and prominent member of national and regional direct-selling
associations worldwide.
• All over the globe, direct-selling is an industrial sector with more than $80 billion sales and
approximately 30 million sales people.
Award
• Amway India was awarded the prestigious “United Nations Environment Program
Achievement Award” as a business leader to promote education and environmental awareness in
1989.
• In 2005, 8th November Amway India was awarded Corporate Citizenship Award for
International Community Service by the United States Chamber of Commerce
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