Direct selling brand Mary Kay India finally ended its Indian operations pointing out regulatory concerns and due to the slow growth from the very beginning. Mary was also a member of IDSA.
Same development news was also communicated to the suppliers and also to the Mary Kay representatives in India.
Mary Kay Inc stated: “We have actually seen the regulatory environment in India for both direct selling and cosmetics companies substantially change and change once again at a disconcerting and inconsistent rate, while the nation’s infrastructure continues to create overwhelming barriers. In spite of significant investments of time and money, our operation in India has not performed as we had hoped and anticipated. So, we have actually made the choice to reallocate the company’s resources to other international markets.”.
Mary Kay Inc come to India in 2007 and has invested close to $20 million in its venture. They launched a number of India-specific products and had nearly 100 stock-keeping units in categories such as skincare, fragrances and cosmetics.
They were also thinking of setting up a third-party manufacturing facility in Baddi, Himachal Pradesh.
Mary Kay, which has 2.5 million distributors in about 35 markets worldwide, ended up being popular for providing pink Cadillacs to its leading sales persons. In India, it had about 4,500 beauty agents and 4 third-party warehouses.
Lot of other direct selling brands have raised the same concern. The ambiguity in mlm laws in India is giving negative prospects. With the same concern, soon the World Federation of Direct Selling Associations (WFDSA) is planning to hold its first meeting in India with various stakeholders to address the industry’s concerns.
Our Take: Surely, it is not a good sign. The government of India has been postponing the regulation required for the direct selling industry for a very long time. The other big players such as Amway, Oriflame, Tupperware and Herbalife have already raised same concerns in the past. Something must be done at the earliest to show confidence to good direct selling companies before other big players think of making same move.