Recession had the least impact on India’s direct selling industry. But it did nudge industry leaders Amway enough to shift from class to mass to capitalize on rural India’s buying power.
Excluding the insurance sector, the country’s direct selling industry was worth Rs 3,300 crore during the 2008-09 fiscal. The organized sector accounted for Rs 3,027 crore of the total market size. The share of IDSA (Indian Direct Selling Association) companies including Amway was Rs 1,884 crore.
The findings followed a market survey ending October 2009 by Ernst & Young.
“We weren’t recession-proof, but our recession-resistant performance helped us post a turnover of Rs 1,407 crore in 2009 to register 25 per cent growth over the previous year,” Amway India vice-president (eastern region) Diptarag Bhattacharjee told Hindustan Times.
Reasonably unexplored Northeast powered Amway’s growth by logging 37 per cent more in sales last year compared to 2008.
The growth of Amway India – it is a wholly owned subsidiary of US 8.3 billion Amway Corporation – wasn’t up to expectation though. This made it change its urban approach to target rural markets and add e-commerce to direct-selling its range of 115 products.
“Rural India has 40 per cent buying power. We have accordingly redefined ourselves for the rural mass besides branding products such as Attitude (cosmetic) for the middle class,” Bhattacharjee said.
With over 550,000 active distributors across the country, Amway has been India’s largest directing selling FMCG since launching operations in May 1998. With web-selling and rural orientation, it plans to achieve a turnover of Rs 2,500 crore by 2012.