MLM News

Tag: Mary kay india

  • Modicare, Amway, DXN and K-Link are cutting down their operations in Kerala

    Modicare, Amway, DXN and K-Link are cutting down their operations in Kerala

    Companies such as Modicare, Amway, DXN and K-Link have finally decided to decrease their presence at Kerala. One the biggest reason for doing so is due to authorities continuous harassment faced by their distributors and company officials.  A lot has changed after the arrest of Amway India Chairman and CEO William Pinckney.

    Authorities of the IDSA, which represents all the top direct sellers in the India, said distributors of many these business are being questioned by the state police at routine periods.

    “In case the situation does not improve for the operational feasibility aspects, few of them may consider to stop operating in the state of Kerala,” Chavi Hemanth, secretary-general at the IDSA.

    She also said,”The Indian Direct Selling Association is trying their level best to convince the government to provide a safe environment, where direct selling distributors can perform their regular business activities without getting harassed by the authorities”.

    According to Indian Direct Selling Association, the 4 southern states contributed 39 per cent to the Rs 6,385-crore direct selling industry in 2011-12, and some companies get up to 40 per cent of their profits from Kerala.

    Right now in India there is no specific law to control the direct selling industry and most Direct Sellers fear that.

    The biggest shock came when the Kerala police arrested and booked Amway India Chairman and CEO William S Pinckney and 2 business directors under Prize Chits and Money Circulation Schemes (Banning) Act.

    Earlier this year, American direct selling cosmetics firm Mary Kay completely stopped their operations in India citing lack of policy and law.

    A Modicare speaker stated the home-grown direct seller is dealing with business difficulties in Kerala due to unclear steps taken by different authorities. “A clear direction from the central Government on this front is much-needed for the growth of direct selling market.

    Amarnath Sen Gupta, IDSA chairman and Indian head of Malaysian direct seller DXN, stated the organization is constantly working out with the Kerala government, adding that the decision to continue operations in the state will depend upon exactly what regulation the government introduces. Companies that had active business in Kerala include Amway, Modicare, Tupperware, K-Link, DXN and Hindustan Unilever.

  • Mary Kay Exits India Pointing Out Regulatory Concerns & Poor Sales

    Mary Kay Exits India Pointing Out Regulatory Concerns & Poor Sales

    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.