Amway versus MonaVie in India

by Ted Nuyten on December 1, 2011

Indian Business Woman

A significant number of unhappy distributors is leaving Amway India which might make a notable dent on the revenue of the direct marketing company's operations in the country. During the first phase of the exodus, around 40,000 distributors are estimated to leave within the coming four weeks to join MonaVie, another direct marketing company specialised in health juices, and this may cause a revenue loss of Rs 200 crore ($50 million) to Amway.

The discontented lot of 15 prominent distributors across the country has decided to leave Amway and they are taking along with them a network of smaller distributors called 'downline', developed over a period of 13 years of Amway's operations in India.

Sajeev Nair, one of the pioneering distributors of Amway in the country and who earned Rs 1.5 crore last year ($375,000)  from marketing the company's products, says that over the last five years, distributors have become unhappy, because 'they were not able to achieve their dreams" – implying that the income from the sale of products didn't grow over the years. "For those who have taken it up as part-time job, there was no problem, but as a full-time job, the returns are low. Earlier, we used to get highly qualified professionals like doctors and software engineers, but recently, the quality of the distributors has gone down considerably," says Nair.

Some of the distributors were miffed at the fact that Amway was shifting its focus from the distributor network towards the showrooms. S P Bharil, based at Jaipur says, "Amway was a people-based company, but has slowly become a product-based company, but MonaVie is a people-based company and its growth rate is higher than that of Amway."

Ravi Jain, one of the major distributors of the company in Rajasthan with a turnover of Rs 97 crore, ($24 million) says, "Seventy per cent of my distributor network will be leaving Amway with me". He believes that the first phase of exodus will happen within November, and that Amway will eventually lose one lakh active distributors in the coming months.

Amway's offices in Kerala were recently searched by the state police and the distributors were unhappy about the way the company handled the issue. Sources say that the company's warehouse in Kochi may be relocated soon.

S Viswanath, head of corporate communications at Amway India, says that he has noticed an exodus of distributors to MonaVie.

Source: Times of India

 

Amway India Response for this case can be found here

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