Remember how Eureka Forbes friendly salesman giving door-to-door service became a big hit in the mid 90’s, not only becoming the leader in the two categories of vacuum cleaners and water purifiers, but also popularising the direct selling medium in India. With mainstream players like Sahara foraying in direct selling segment through their Q-Shop products and Amway’s turnover crossing the revenues of some of the leading FMCG companies, direct selling majors are betting big on their marketing strategy to garner a greater share in the market.
For life’s GM Manoj Shirodkar, Country Head, For life trading India tells Pitch, “We are focusing on the direct selling game by playing two main marketing cards which are of – ‘Product’ and ‘Distribution’. The best part about direct selling is that one can reach more markets in lesser time. While, we are focusing on introducing new products in the market, we would also be focusing on distribution by asking the direct sellers to cover more cities including tier I and tier II.”
While some companies follow a general marketing approach, companies like US based Avon are playing a different tactic by roping in areas that are not on the usual map for doing businesses. The business model which US based Avon, a skincare company with global turnover of $11.292 billion is adopting is door-to-door sales and brochures to advertise its products. Unlike other companies that focus on North, South and West, Avon is trying to tap markets in the Eastern part of India which includes Darjeeling, Kalimpong, Jalpaiguri and Siliguri.
Amway India, which recorded a turnover of Rs 2, 288 crore in 2012 has always laid its main focus on health category as it draws 50% of revenues from its flagship brand ‘Nutrilite’. Amway has recently come out with its new range of products in Women’s health category under Nutrilite and has also announced its first greenfield manufacturing facility in Tamil Nadu.
Yoginder Singh, senior VP, legal and corporate affairs, Amway India says, a consumer prefers good quality product, online purchasing, 100% money back guarantee scheme and door-to-door service and Amway has always gone its way forward in keeping all this as a part of its strategy.
Highlighting the importance of online sales, he says, Amway has an online tie up with Microsoft and draws 30-35% of its sales from there
According to Didar Singh, Secretary General, Ficci, direct selling today has moved beyond cosmetics to include technology products, herbal medicine to garments etc. Direct selling in 2011 accounted for 35.8 per cent of non-store retail sales, 4.41 per cent of organized retail sales and contributed 0.07 per cent of GDP. ”
Separate Regulation Required
Even though, direct selling is growing at a double-digit growth in India, direct selling players feel that a grant of ‘Industry Status’ and separate regulation should govern the industry. Amarnath Sengupta, Chairman IDSA said, “Indian Direct Selling Association (IDSA) have been continuously advocating with the government since last many years and we as an industry body association would want to emphasize on separate regulation that should govern this industry.
Chavi Hemanth, Secretary General of IDSA said, “I feel proud that Direct Selling Industry has reached a turnover of Rs 6,385 crore in 2011-12. Industry is estimated to scale upto Rs 10,844 Crore by 2015 and hopefully reaching to Rs 34,000 crore by 2020. She stressed that the need of the hour is definitional and operational clarity followed by separate law and exclusion from Prize Chits and Money Circulation Scheme (Banning) Act 1978.”
Tamuna Gabilaia, Executive Director, WFDSA said, “WFDSA’s mission is to build understanding and support formation of policy framework for direct selling in all countries. We are very keen and would love to work very closely with Indian Government towards formulation for policy framework in India as well.”
Shilpa Gupta, Head-Retail, FICCI said, “India’s direct selling industry, where products are sold directly to customers rather than through retail shops, is fast emerging as a viable career option for women, empowering them to be independent. This industry enables women to be financially independent and supplement the family income.”