Amway India eyes Rs 2,500 crore turnover in 2012

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Direct selling FMCG company, Amway India has refurbished its home care brand, Amway Home, replete with new product formulations, packaging, and a new brand identity logo to strengthen its presence in the fairly untapped and high potential home care segment.

The repositioning exercise is essentially targeted at educating consumers about the environmentally sustainable practices used by the company with its new tagline ‘Powerfully Green for a Safer Clean’.

The new range of home care products for laundry, surfaces, and dishwashing have been developed using formulations that make them entirely biodegradable. The company also claims to be the first in India to manufacture products certified by the United States Environmental Protection Agency.

Changing consumerism
While Amway is looking to engage with a growing number of environmentally conscious customers, the premium pricing range of these cleaning products might end up limiting its reach and intended customer base.  However, for Ajay Khanna, AVP, Marketing, Amway India, this premium pricing is only a mind block, and there is a large customer base that is sensitive to the environment and demands superior cleaning.

William Pinckney, MD & CEO, Amway India

William Pinckney, MD & CEO, Amway India

William Pinckney, MD & CEO, Amway India also echoes similar thoughts. According to him, Indians have evolved in their buying habits since the time the brand came to India in 1998, and the premium tag associated with the company doesn’t bother him since Indians today are willing to shelve out money to buy high quality products.

Customised offering
Being a global brand with a presence in several countries across the spectrum, significant customisation and localisation has gone into Amway’s global product portfolio to make it better suited and more relevant to the Indian buyer. While the company’s goal has centred on promoting global products in India, it has also developed indigenous, local products.

Pinckney points out that India is a country of many firsts for Amway. It is the only country where Amway offers value products and products in various sizes and SKU’s to appeal to customers at different price-points. In terms of product categories, Amway’s personal care brand, Persona has products like coconut hair oil and disposable razors that have been developed specifically for India. On the cosmetics front, while the company has a super premium brand, Artistry, it has also launched another local cosmetic brand, Attitude, at a lower rung of the price ladder ( at one-third of Artistry’s price range) so as to provide a greater choice to the value conscious Indians.

Scaling higher
This unwavering focus on the Indian market seems to have worked well for Amway, at least from what the numbers indicate. In 2011, Amway India clocked an annual turnover of Rs 2,130 crore, a figure that Pinckney estimates to go up to Rs 2,500 crore in 2012 on account of its strategic initiatives. While not the biggest contributors, India is one of the fastest growing markets for the company and is the seventh largest affiliate in the world. “My goal is grow between 10-20 per cent a year. By 2020, India will be among the top three markets of the world for Amway,” confidently asserts Pinckney.

At present, Amway India offers over 130 products in five categories — personal care, home care, nutrition and wellness, cosmetics and great value products. While Tamil Nadu is its biggest market in India, in terms of product categories, the nutrition category tops the charts with a 50 per cent share followed by the beauty segment at 10 per cent, and home care at around 7 per cent. With the increased focus on home-care, Pinckney expects its share to rise to 10 per cent. The company is also planning to launch a new range of cosmetics for India around August this year.

Strategy: Distributors doubling up as marketers
While Amway has a manufacturing plant in Himachal Pradesh, it is also planning to set up a new manufacturing facility in India, at an investment of around Rs 400 crore to produce nutrition and beauty related products. According to the company, 97 per cent of its product portfolio in India is manufactured within the country.

From a marketing and communication standpoint, barring a few television commercials, Amway hasn’t been too aggressive in terms of mass media advertising.

According to Khanna, being a direct selling company, it relies more on live-demonstrations and consumer engagement activities by its sales force to drive awareness and build a consumer connect, as opposed to using the press. He explains that while Amway has used the mass media platform for its health, and to some extent, beauty products to build recall and inform consumers about the need for supplements, home care brands do not require such concept selling.

Short films, highlighting the product features and usability have been made, which will be used by the 5.5 lakh active distributors across the country to drive awareness about the new environment-friendly offerings.

Pinckney also feels that educating customers through the company’s business sellers results in a loyal customer base and works best for its distribution model, even though it takes longer than using a conventional marketing medium.

However, he agrees that the company is increasingly starting to look at the digital platform, especially the social media to attract the younger target audience and has also ventured into online trading.

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