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Amway eyes 25 per cent rise in sales this year

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Direct selling FMCG company Amway India is planning to rework its growth strategy by strengthening its e-commerce channel besides embarking on mainstream advertising and marketing initiatives.

The company also hopes to extend its advertising efforts to build brands under the Amway umbrella, especially in the nutrition and beauty products segments which account for almost 50 per cent of the company’s revenues.

While the company clocked a turnover of Rs 1,128 crore — a 40 per cent rise over its sales in 2007, this year (2009) it hopes to grow around 25 per cent despite the slowing economy.

By the end of this year, Amway — which enjoy a 33 per cent market share in the Rs 3,000 crore direct-selling industry in India — also plans to hike its product prices by 3-5 per cent. The company will continue to launch products both at the super premium level which is mainly its global portfolio and the mass-end products which have been developed to address the price conscious consumers.

“We will introduce around six products this year. We also have a 4-year plan of advertising, both on television and print, besides using hoardings that work more on a local level. We will invest around Rs 15-16 crore this year to push our advertising and get our e-commerce site up and running,” William Pinckney, managing director, Amway India Enterprises told Business Standard.

While the first leg of the e-commerce site — which was mainly to communicate to its business owners — was started during the last quarter of 2008, the company is now rolling out an e-consumer site unique to the Indian market. “We realised that some consumers don’t want direct contact with our business owners hence they need an alternate channel to get information on products and direct them to the buying channels,” Pinckney said. Amway has around 450,000 active distributors in the country.

Given the rise in demand, the company will also scale up the capacity of its Baddi (Himachal Pradesh) plant this year by adding more manufacturing lines. Amway will spend around Rs 40 crore for the same.

The Baddi plant accounts for manufacturing 80 per cent of Amway products in India while the remaining products are made at six other contract manufacturing facilities. Moreover, it will also undertake brand building specially for its Nutrilite and Artestry brands in India.

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