"Amway will be the market leader in a very short time"

Dick DeVos is the president of the US-based $7 billion Amway Corporation. Amway sells consumer products across the world, not through shops ...

Dick DeVos is the president of the US-based $7 billion Amway Corporation. Amway sells consumer products across the world, not through shops but through a chain of distributors. This is called direct selling. A consumer thus buys its products only from the distributor who is typically a friend or a relative. Almost anyone can be a distributor. Amway thus depends on the trust between individuals to sell its products.

Amway, which is also one of the biggest privately held companies in the world, plans to launch its products in India in May this year. In a conversation with Pranjal Sharma, DeVos explains his strategy for India.

Your competitors like Oriflame and Avon are in India. Local companies are also adopting your approach. How will this affect the launch of your products?

It is a challenge. It will be easier because direct selling companies are here, but the advantage will of course be offset by more competition. There are thousands of companies which have tried to copy theAmway concept in many shapes and forms. We believe that imitation is very sincere form of flattery. Good and honourable competition makes us better too. We anticipate that we will be the market leader in very short order.

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We think there is still a very great education component required in India to tell the consumers about direct selling. There is still misunderstanding about what direct selling is all about. This will be one of our responsibilities.

Amway has sponsored a chair in entrepreneurship in Delhi University. Is this aimed at helping the management students understand the business of direct selling?

This link will add to the understanding of direct selling in India. The management cadres today still find direct selling an unknown concept. There is another organisation which will be helping spread the word about direct selling. The Indian Direct Selling Association is working on this front. Our tie-up with Delhi University is very broad at the moment but we could look at ways ofeducation and training people about direct selling.

Are you planning any advertising campaign for the launch of your products?

We don’t advertise at all for products. In the US we have corporate campaigns. But in India we do not have any immediate plan for a advertising campaign. We have generated a lot of interest already and we seem to be doing fine. We normally prefer sponsorships to advertising to communicate with the market. We have set up the Amway Opportunity Foundation which will cover social and community initiatives. The focus will be promoting new initiatives in entrepreneurial education, human development and community health. For instance the foundation has already worked with the All India Confederation of the Blind to make available text books in Braille.

Are you worried about launching consumer products at a time when politicians are attacking such companies?

I thinnot have companies like Amway in mind. We are a local company in many respects. We are notimporting any products. We are doing all our manufacturing in India with local companies. We are providing employment to hundreds of Indians. We have transferred latest manufacturing technology to our Indian manufacturers free of cost. We have also allowed them to manufacture for other companies using our machines as long as they don’t use our processes. I think all this sets us apart from other companies who are just importing consumer products.

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You plan to bring in NRIs as distributors so that you penetrate the market faster. How many do you expect will come to India from the US?

I can’t put a figure on this. They will come over the years. This is not a strategy. We are just beneficiaries of the portion of our business which is in India hands in the US. They will be a valuable component of our initial success in India. They will provide us with a tremendous window to the market through their contacts and their family networks.

The ultimate success of Amway will lie on resident localdistributors. We will be counting our distributors in tens of thousands in the short term. In the long term, in a country of this size, our distributors will be in the hundreds of thousands. In Japan where we have been for 20 years, we have more than one million distributors.