Direct selling FMCG company, Amway India, has grown in India by tweaking its business model to match the needs of the Indian market.
It reduced the joining fee from Rs 4,400 to Rs 999. The move led to a surge in the number of distributors, with the company registering 24% growth in turnover last year. The company expects to grow 22% this year.
The company also took the mass media route to build the brand, which direct selling companies do not do, to increase its brand reach.
Achinta Banerjie, VP, Amway India (West) said reducing the joining fee was a strategic decision and the idea was to make it affordable. This ensured that a large number of people joined in. Last year, 1.5 lakh people joined in so Amway was able to scale up, he added.
Advertising campaigns helped the Amway brand get national recognition. This is one of the experiments that Amway tried out in India and had not been tried elsewhere, explains Banerjie.
After the success of last year, where the company spent Rs 12 crore on ads, this year Amway is increasing its spend on ad campaigns, he said. Amway plans to spend Rs 25 crore on the ad campaigns and continue with this disrupting strategy in the direct selling industry.
The company also experimented with the new format experience centres for consumers which has paid dividends. ?All this led to the company almost doubling its turnover in around three years to Rs 1,407 crore in 2010 and will target a turnover of Rs 1,800 crore this year, Banerjie said in Pune where Amway?s CSR arm set up an computer training centre for the visually challenged . The company targets a a turnover of Rs 2,500 crore by 2012. The company’s total global sales in 2009 were $ 9.2 billion.