Amway India Enterprises is expecting draft guidelines for direct-selling industry in India in a couple of months. Samir Behl, regional president (Europe, Africa and India), told TOI that the company was able to dispel the Government of India's long-standing notion on the direct-selling industry as 'pyramid'.
According to the top Amway official, the inter-ministerial group on direct-selling would set aside the negativity and misconception and come up with a draft guidelines, which might pave way for a full-fledged legislation and regulatory framework for the industry soon. The direct-selling giant said it will remain a B2B (business to business) player and has no plans to go for tie-ups with e-tail giants like Flipkart or Amazon.
This business does not have a pyramid structure. Had it been a pyramid, direct-selling businesses across the country would have collapsed by now. Dearth of legislation and fundamental structure is creating a confusion. We are confident that we could make things clear to the inter-ministerial group on direct-selling industry, Behl said acknowledging that the last two-three years were not good for the industry in India.
The company's business volume has been flat over the last two years owing to controversies and dearth of regulation, he added.
According to a source close to the development, the inter-ministerial committee on direct-selling industry, led by ministry of consumer affairs has already prepared the draft guidelines and circulated the same among themselves. As direct-selling business comes under internal trade category, which is a state subject, we are also working with the state governments to ease the transition process towards regulatory regime, added Behl.
On Amway's online aspirations, Anshu Budhraja, CEO, Amway India, said, We have a strong presence in web through our own site. We will keep on bolstering that. We don't want to weaken our strong business associates' network.
Online sales contributes 30% to the Amway India's total business compared to 85% of e-commerce pie for its European arm. Commenting on the future of direct-selling industry in the country, Behl said, We are bullish on India which has been proved by our continuous investment and physical presence.
There is a huge potential waiting to be tapped as India is a highly networked society in which recommendations play a significant role in making a buying decision. With the surge in entrepreneurship and social media presence, it should work. According to KPMG, the direct-selling industry in India will have a worth of 64,500 crore by 2025 from a current figure of 8,000 crore.
The Amway India CEO said, that they hold We hold one-fourth of India's direct-selling business at 2000 crore, which we are targeting to treble in 10 years, India is one of the top 10 markets for the $9.5billion US-based Amway Corporation.
Amway is a $9.5 billion direct selling business based in Ada, Michigan, USA. Top-selling brands for Amway are Nutrilite™ vitamin, mineral and dietary supplements, Artistry™ skincare and color cosmetics and eSpring™ water treatment systems – all sold exclusively by Amway Business Owners. Global sales in 2014 made Amway the No. 1 direct selling business in the world, according to the Direct Selling News 2015 Global 100. The company’s annual sales figure includes revenue from direct selling operations and other business holdings.
*Based on population data available about the specific markets and surveys conducted in China, India, Japan, Korea, Malaysia, Russia, Taiwan, Thailand, the United States and Vietnam between May 2013 – June 2014 by an independent research firm.
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