Amway maps growth strategy

Direct selling FMCG giant Amway is banking on a slew of diversification gambits to beat stagnant sales in India.

By Our Special Correspondent in Calcutta
  • Published 28.03.16

Calcutta, March 27: Direct selling FMCG giant Amway is banking on a slew of diversification gambits to beat stagnant sales in India.

The move comes at a time the company, a wholly owned subsidiary of Amway Corporation of US, is yet to fully come out of the shadows of regulatory challenges.

The company plans to bring out a range of cookware, energy drink and variants of food supplement Nutrilite to shore up revenues.

"We are hoping to launch the cookware range before Diwali. Rest of the new products will come in phases. These will help us achieve a double-digit growth soon," Samir Behl, regional president of Europe, India and Africa of Amway Corporation, said.

According to Behl, the cookware range was built on the "health and wellness" platform as it promotes healthy cooking.

To begin with, the company may import the range from Thailand, taking advantage of the prevailing favourable tax treaty with India. Once the volume picks up, it may look at outsourcing from Indian players.

The market for home appliances is about Rs 15,000 crore and is growing 10 per cent, attracting new entrants. Last week, Calcutta-based Eveready Industries announced its foray in this sector.

The company also plans to introduce energy drink "Xs", which will be sold through the direct selling channel. Moreover, it will add new variants to Nutrilite, which contributes half of the US multinational's business in India.

In 2015, Amway India's turnover stood at Rs 1,800 crore, which is nearly on par with the previous year.

Anshu Budhraja, chief executive officer of Amway India, said the business has shown a resilience despite regulatory troubles.

William S. Pinckney, the erstwhile managing director and chief executive officer of Amway, had to spent two months in a jail in Andhra Pradesh on criminal charges about financial irregularities.

Amway strongly defended him in court and outside, highlighting the need to frame suitable regulations for the direct selling industry.

"I think there is now a fair bit of understanding in the government about the direct selling industry. We need a proper regulation that weeds out so-called pyramid companies from legitimate business such as Amway where no commission is paid unless the product is sold," Behl said.

Amway, the $9.4-billion MNC based in Ada, Michigan, US, has invested Rs 814 crore in India, including the Rs 550-crore manufacturing plant in Madurai, Tamil Nadu.