MLM In India Must Have strong Laws To Regulate Direct Selling : Amway

Written by Ak Sharma

India’s biggest direct selling business, Amway, is lobbying hard to ensure there are rigorous regulations and law laid down for the industry. With multi-level marketing operations such as SpeakAsia, GoldQuest and the most recent Emu farming scheme coming unstuck, the need to tighten the noose around this business is being felt more than ever in the past.

Richard Holwill, international vice-president-public policy, Amway, in an interview lays bare exactly what it takes to tread cautiously.

Amway has been in India for 14 years now. So, in this journey what has worked in your favor and what has not?
We began in 1998 and that year we clocked a turnover of Rs99 crore and by the end of the last year, we have actually expanded to Rs2,130 crore. In this voyage, what has actually worked with us is we have had a sizable portfolio with 130 products in the kitty and we have actually not compromised ever before on the quality front.

Additionally, as a direct selling company, we offer company possibilities to individuals who probably don’t have a huge capital. And the fact that we have a 100 % money-back assurance in regards to an unsatisfactory experience additionally provides us credibility. So, a combination of all this has worked in our favor.

Exactly what most likely hasn’t worked with Amway is that many individuals don’t understand just what we do and there is no regulative platform in India.

On that note, the ministry of individual affairs is finally talking about bringing direct selling business under law, what’s your take?
The direct selling industry in India is more than Rs7,000 crore with about 18 large business. And companies such as SpeakAsia, Nano Excel and bizarre forms of advertising have opened a can of worms which has brought the focus back on MLM (multi-level marketing) schemes. Once any type of company cheats, then the whole market’s track record is spoilt, which does not work in our favor at all. Regulation is something that the market has actually been asking for more than 10 years. It is required to guard individuals and this can easily help weed out unethical companies that are doing business. And this can assist the ethical ones keep the pledge of direct selling.

Just what are the things that you anticipate to be a part of the law?
There should be laws on the time taken by a business to fix a grievance made by the individual. The other thing is some companies make it a business from recruiting. The moment you begin getting cash from this, there is doubt on legitimacy. So, we would additionally want that there should not be any type of monetary transactions for recruitment, instead cash and commission should be paid just on sales.

Generally, what are the issues, and grievances that consumers make?
There are lots of times when representatives make misleading guarantees about exactly what your cash can easily earn. Dynamics between suppliers can be different and this additionally results in a problem. For instance, at times, a distributor might recruit somebody who doesn’t wish to offer, which complicates things. There are also grievances made about high-pressure sales. However, in case a complaint is made, we ensure we resolve it in no more than 10 days.

So, now about your company in India, Amway believed in a no deal approach and focussed on word of mouth. However the business has changed the gameplan and seems to be spending a whole lot on advertising and offers …
We started with a no offer approach, but in the course of time, we understood it was a really good concept to alter and to spend on promotion. The word-of-mouth strategy has its very own constraints in regards to far fewer reach. However this, paired with advertising and promotion, has actually assisted the business expand multifold. We have actually also gotten in the e-commerce space and now that space is responsible for our 15 % of the absolute turnover.

What are the brand-new items that we can expect from Amway?
In India, we offer 130 products, around the globe we offer 450 and every year we attempt and offer at least 6-8 products in the Indian market. Last year, there was a lot of focus on health supplements for kids, this year the focus has been on supplements for healthy and balanced ageing. So, this year we have seen 6 products along those lines and two are left. We will also be entering the individual durable area, but it is still premature to comment.

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