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November 01, 2011

Cover Story

India—Kaleidoscope of Cultures

by Marilynn Hood

Direct Selling Companies in India

The Taj Mahal, located in Agra, India, was built by Mughal emperor Shah Jahan in memory of his third wife, Mumtaz Mahal.

Who are the direct selling companies that have established a presence in India? Here’s a brief overview.

Early Entrants

India’s policy reforms of the 1990s marked the beginning of a new era in trade and helped create a more favorable environment for direct selling companies. During these early years, as the industry began to form, only a handful of companies were in operation. One of those few companies was Eureka Forbes, which introduced vacuum cleaners to India during the 1980s. As part of the Shapoorji Pallonji Group, this company continues to operate in India and now provides water purification systems and air purifiers as well.

When the IDSA began its operations in 1996, only five companies were members of the organization: Lotus Learning, LB Publishers, Avon, Oriflame and Amway. All of these companies are still present today, and of the five, Avon, Oriflame and Amway continue to be members of the IDSA.

Modicare is a company that originated in India as a division of the Modi Group. The parent company, Modi Enterprises, was founded in 1933 by Rai Bahadur Gujarmal Modi and has grown into an industrial conglomerate with operations around the world. Samir Modi, grandson of the founder, studied abroad in preparation to help oversee his family’s operations. After observing the many accomplishments of Indians living in other countries, Samir Modi resolved to create a company at home that would provide opportunity to all Indians, regardless of caste, color, religion, gender or academic qualifications.

Recognizing the potential that direct selling has to provide such economic opportunities, he established Modicare in 1996. The company sells a wide range of products from personal care and beauty to automotive and home care.

Companies Present Today

The positive economic conditions in India continue to attract a growing number of companies from various countries. Current IDSA membership includes several international companies, such as the Chinese company Tiens/Tianshi, and from Malaysia, K-Link Healthcare and Daehsan Trading. Another member, AMC Cookware from Switzerland, has a strong presence and recently celebrated 15 years of operations in India. AMC operates in 40 countries, including the United States. Using the party plan to sell its cookware, the company has already entered 52 Indian cities. Growing at an accelerated rate that has averaged 20-22 percent over the last five years, the company still sees plenty of room for expansion.

Oriflame, the Swedish cosmetics company, was one of the original IDSA members and continues to enjoy great success in India. Fredrik Widell, Managing Director of Oriflame India and past Chairman of the IDSA, sees India as being one of the most important markets for his company in Asia. He says, “We are looking at tripling our business from India in the next 3-4 years,” and then adds, “We see a huge growth potential here.”

Another IDSA member is Hindustan Unilever Network, the direct selling arm of Hindustan Unilever Limited. Since its inception in 2003, the company has grown to include partners in more than 500 cities and towns, with 30 offices across the country. Its training academy has been a boon to consultants, helping them develop skills, leadership and character.

Other international companies have also found India desirable. CNI (Creative Network International) Enterprise from Singapore, a 22-year-old company, has operations all across Asia and in other parts of the world as well. Elken International, founded in 1995 in Malaysia, now has business ventures in six countries in the Asia Pacific region. Altos Enterprises, an Indian company, began its direct selling business in 2000 and plans to expand its operations.

Adding to the current lineup of direct selling companies in India are several from the United States. Offering a wide variety of products, these companies include 4Life Trading, Forever Living Products, Sunrider International, Tupperware, Mary Kay Cosmetics, Jafra Ruchi Cosmetics, Herbalife, Avon, Amway and Max New York Life Insurance.

Avon was among the first direct selling companies to enter India after the country’s economic reforms were enacted during the 1990s. Today, its operations are flourishing, and its growth rates are stunning—around 55 percent last year and on track to be over 60 percent this year. Entering India and beginning business operations was not a particularly difficult process for Avon, according to Hemant Singh, the Managing Director of Avon India. For companies desiring to do business in India, he suggests they obtain legal counsel to learn the laws that apply and then get the permission needed from the Foreign Direct Investment Board before beginning operations.

Integrating Into the Culture

Integrating CultureKey to the success of direct selling companies in India seems to be their ability to integrate and become a part of the fabric of the country.

As in many countries, direct selling has proven especially attractive to the women of India, providing opportunities that previously were unavailable. Currently, an estimated 70 percent of all consultants are women, with several companies almost exclusively comprising women. Mary Kay Cosmetics, with its unique focus on women, has meshed well with this environment.

As Renuka Dudeja, Associate Director for Public Relations of Mary Kay Cosmetics India, says, “Our mission is to enrich women’s lives by offering them a business opportunity where they can earn unlimited rewards while still maintaining a balance between their family and work.” This has held direct appeal, and she notes further, “Our culture and mission have been warmly embraced by women in India.”

Customization has contributed much to Avon’s success in the Indian market. As Singh points out, “The color tones in the North and in the South are very different.” Avon has customized its cosmetics to allow not only for skin tone variations but also for regional preferences in the color palette.

Jewelry is special in India and has wide appeal to girls and women of all ages and from all economic levels. Avon jewelry has proven popular, but as with the colors of its cosmetics, Avon recognizes that Indian tastes are not homogenous. The company hired top designers to create custom designs and recently launched its Indian Diva collection, which it presented during its Avon Fashion Tour 2011 in Delhi.

AMC Cookware has taken integration even further, immersing itself in the Indian community. With a company slogan of “Eat Better—Live Better,” AMC has worked to enrich the lives of its consultants and their customers. Thanks to the 45 professional dieticians and nutritionists the company employs, consultants can pass along healthy cooking ideas and important nutritional information as they demonstrate AMC’s cookware products.

With 98 percent of its consultants being women, most of whom are housewives, AMC realizes how significant training can be in their lives. The company’s academy provides extensive training programs and honors attendees at every level of achievement. A special ceremony is held for those who complete the entire four years of coursework, and graduates receive an AMC Diploma in Management. As David Stanley, Managing Director and CEO of AMC Cookware India, explains, “This is a big thing. Graduates bring their entire families to the ceremony. Their achievements become a source of pride for the whole family.”

Stanley has been an executive with AMC during the development of operations in India, and is cheerfully optimistic about expansion. His advice to other direct selling companies seeking to do business in India is “come soon!”

Focus on the Future

With India’s economy still growing despite the international slowdown, several company leaders have expressed their belief that conditions are in place to prosper. In fact, Avon’s Singh considers them ideal for direct selling. “India is a big place,” he says. “The opportunities are huge, and there is so much room to grow.”