E-commerce is the biggest disruptor, it completely changed consumer behaviour: Sundip Shah, CMO, Amway India.
Sundip Shah says direct selling companies have the potential to drive India's economic growth in a big way
Published - Dec 18, 2017 8:51 AM Updated: Dec 18, 2017 8:51 AM
Amway, one of the largest direct selling companies, is all set to revamp its business strategy in India. It will be entering into the 20th year of operations in India and expects to reach a turnover of Rs 2000 crore by the end of 2018. Amway Corporation has invested Rs 1,000 Crore in the country. The direct selling industry could touch Rs 64,500 Crore by 2025, according to a forecast by FICCI- KPMG.
In an exclusive interview with exchange4media, Sundip Shah, Chief Marketing Officer, Amway India, spoke to us about why legislation is important for direct sellers and how they are enhancing brand presence in the country. Excerpts: -
How critical is India as a market for Amway?
India is one of the top seven markets of Amway. We are doing well and there is a lot belief in the potential of India and the best testimony is the investment Amway had done, we have invested Rs 600 crore in our plants in Madurai, which is Amway’s third manufacturing plant located outside of USA.
My entire career has been in FMCG marketing. The biggest thing any marketer seeks for his brand is ‘word of mouth’ and 'advocacy’.
The most powerful way of persuasion is when users start advocating the brand and you can visualize it. That is the best moment. Amway has personal experiences with its consumers and it is one of our best marketing tools to leverage. If people are asking for your product then you are creating an environment, which enables success, and we have done the same.
How are you competing with homegrown e-commerce players and global giants in the Indian market. What is your strategy to increase market share?
E-commerce is a wave, which India is experiencing, it has changed the shopping behaviour quite a bit. I have seen situations where people search online and do all their research but to be sure about the quality of the product, they go to the shop, physically touch it and again come back to the website and order it – so it's pretty unique to see people having trust issues.
We would start giving an omni-channel experience to both our consumers and distributors to create sync between online and offline experience. Consumers want to touch and feel the product so XPPs, Xpress, Pick and Pay retail stores are there, which are like supermarkets for easier access. We roughly have 45 and 25 will be added by the end of 2018.
Before this a person had to rely only on distributors, but now we have opened two more ways for their accessibility. The distributors are always involved, we are not moving away from our core philosophy of selling through direct sellers.
What do you have to say about the regulatory climate that is prevalent in the country especially for direct selling firms like yours?
There has been very good development in the market. The direct selling guidelines was launched by the ministry and we believe is a major step by government in recognising direct selling as a full-fledged industry, which has the potential to drive economic growth in a big way for India. It is protecting companies that are doing legitimate business vs. ponzi schemes. It will safeguard the consumer’s interest while protecting ethical direct- selling companies.
The issue of guideline is a big step forward, the government has partnered with industry in framing the guidelines. We feel that the climate has improved significantly as it gives you lot of clarity, but now it is important to be adopted by all the states and convert it into a legislation and that it becomes a benchmark in which any direct selling issue can be considered.
The government is completely supportive and progressive in its outlook and understands the role of direct selling and is taking concrete steps at the same time.
Amway will complete 20 years in India. The marketing scenario has completely changed over the years from traditional marketing to Internet marketing. What are some of the biggest challenges you have faced so far?
In terms of challenges, digital marketing is something where everyone is trying to get their arms around. TV in India still has the widest reach and highest impact but via digital one can focus on the youth very quickly, we are using digital to create a connection with youth, though it is a learning curve.
Another challenge that we faced is unauthorised online selling. For example, Amazon is not supposed to offer Amway products but some of the distributors do give it to them and they sell it on their website with discounts, which is not allowed. The guidelines says the website has to grant permission from direct selling companies before offering any product but it is just a guideline not a law.
We are sensitising our consumers that a person may get a duplicate product if he/she buys from unauthorised websites as we can’t take guarantee of it. We are very confident about our products, if someone doesn’t like it they can return it to us in 30 days with money back guarantee but only when they have purchased it from our own website or direct sellers.
From the beginning Amway’s USP lies in its health products with natural ingredients and now Patanjali is doing the same. Has it affected the business?
Not at all. In terms of health we are into supplements and the penetration of supplements in India is between 12-13%, so, there is a lot of room for everyone to grow. We operate at a different price point itself from Patanjali. It has not affected us in anyway and any competition is welcome. We always take it in a positive way.
Whom would you call the biggest disruptor in the Indian marketplace in the last few years that has redefined customer experience in India?
In general, e-commerce is the biggest disruptor as it has completely changed consumer behaviour, Uber is also a huge disruptor as black and yellow taxis are out of the business now. In the FMCG space it is Patanjali who has shaken up everything for everybody.
What are your plans for the Indian market over the next few years?
Our key strategy is to expand our portfolio, to continuously drive a preferred customer programme. People don’t know from where to buy the products, so XPPs will be a game changer in the market. Another strategy is to drive health and beauty. We are empowering our distributors as to how they can sell products effectively.
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