Amway India to launch low-cost products

Buoyed by the overall slowdown in the economy, Amway India, the Rs 1,000 crore direct-selling fast moving consumer goods (FMCG) arm of Amway Corporation, is redoing its product portfolio to introduce more ‘mass’ products.

Traditionally, direct-selling companies in India, like Amway, Avon, Oriflame, sell products that are priced at a premium compared to other FMCG companies, building on the wellness and superior quality claims. However, to ensure faster growth in a recession-hit market, Amway India will introduce ‘regular’ products priced at ‘mass’ level, at par with market competitors.

The aim is to reach Rs 3,200 crore sales turnover by 2012, up from Rs 1000 crore right now.

Speaking to Business Standard, Diptarag Bhattacharjee, vice president - east, Amway India, said, “We will introduce products and product extensions for categories that are used regularly, so that sales do not dip even if consumer spending does in the long run. For instance, inspite of recession, consumers will continue to buy basics like toothpastes and toothbrushes, hair oil, disposal razors, shampoo, shaving cream, and others. Amway will concentrate on the basic FMCG products and the mass products will be priced between Rs 15 and Rs 60, at par with other FMCG players in the market.”

“Another thrust area now will be to concentrate on rural markets in India as purchase power is very strong there too and consumers want branded products but are price sensitive,” added Bhattacharjee.

Amway will also build on the nutrition and wellness space, which currently makes up almost 50 per cent of its overall revenues.

“We will introduce more products in the energy category. For instance, we have just launched energy drinks and bars. More extensions and flavours are planned in the energy drinks segment as we expect this category alone to contribute Rs 300 crore to our turnover by 2012,” Bhattacharjee said.

Currently, the energy drinks category is pegged at Rs 500 crore, growing at 50 per cent year on year.

The company is also redoing its website to introduce e-commerce.

Amway will put on the website all the products available in India. Amway's direct-selling-agent will introduce the customer to the website and will take consumers through purchases and delivery. Microsoft is Amway’s technology partner for the e-commerce portal.

In India, Amway has four categories – personalcare, cosmetics and skincare, homecare, nutrition and wellness – with close to 100 products. About 60 products are imported to India while the remaining 40 are manufactured in India through five third-party contract manufacturers to suit Indian requirements. Globally Amway has 450 products, which are gradually being introduced in India as well as tweaked to suit Indian preferences.