DeVos: Reaping gains
Calcutta, March 24: Amway — one of the world’s top direct selling FMCG firms — has witnessed an uptick in sales during the economic slowdown, Amway president Doug DeVos said.
Productivity of the associates during the slowdown went up 2-3 per cent in markets such as Japan, the US, China, Thailand and Malaysia, he said.
“People tend to put an extra effort (during the slowdown) to make a little more money. The percentage may be modest, but with the large number of people involved, the impact will be huge. We have been experiencing this in the last four years. This is good for our business,” DeVos said.
It is not that more people join the direct selling network during a slowdown as it takes time to build the network, DeVos said. “We tell our people to work hard despite good or bad times to make a little more,” he said.
Not many individuals make direct selling their primary occupation. Generally, people use extra time of their regular jobs to pursue direct selling. However, during a financial crisis, the pay package of an individual shrinks and some people lose their jobs, leading to most making direct selling their primary occupation.
In India, Amway saw its topline taper off in 2012 after a decade of scorching growth even though its sales force grew.
Amway clocked a Rs 2,248-crore topline in 2012, a rise of 7 per cent over its previous year. It is now the seventh largest market for the company.
The Ada, Michigan-based firm is now the 11th largest FMCG firm in the country.
“We expect India to grow faster than other markets. But as long as there is growth, it is good,” DeVos said.
He said there was a possibility that India might break into the top five league in the future.
Russia and Thailand are number six and five markets for Amway now and they are growing well, too, he added. However, the company expects India to topple these countries in the next five years.
Amway plans to invest Rs 500 crore to set up a manufacturing plant in Tamil Nadu in the next two years. The facility will be one of its very few units outside its home country. Amway has plants in China and Vietnam apart from the US.
Amway India MD Bill Pinckney said the new facility would cater to the global supply chain, apart from producing for India. It will manufacture all nutritional and some beauty products.