Modicare: Advantage direct sell

Modicare, the homespun direct-selling company, has expanded its cosmetic, personal, home and automobile care range with 30 new products. It has re-entered the food and beverages category with a new tea brand called Fruit of the Earth.

The new range includes lipsticks, nail enamels, eyeliners, toothpaste, hair oil, razors, home and kitchen cleaners, dish- and car-washing liquids, laundry powder and so on. The company now has over 200 products to offer.

The launch is being backed up by an aggressive ‘product introduction’ campaign in major cities. Modicare Chairman KK Modi claims that over 16,000 people (mostly its network members) have paid Rs 100 each to participate. The biggest rush is in Bangalore where 12,000 people have signed up, followed by Kolkata where 3,000 will be in attendance. At each of the two cities, the company has hired a stadium to accommodate the crowd.

Direct selling has taken deep roots in the country. The market leader is Amway with a wide range of personal care products. Others in the business include Mary Kay and Avon. Though it was one of the first to enter the business, Modicare lost market share to new players.

Modi admits that business saw a decline a couple of years ago, after which the company decided to change its selling model. “The big learning for us has been that this is not a usual business,” says he. “The member here is not an employee from whom you can demand a certain amount of sales. You have to be flexible and open to listen to him. They can now call me or any of our managers over the phone for any feedback.”

Consequently, Modi adds, the company has grown significantly in the last two years. The company, says he, has in its network over 150,000 active members and it is seeing growth of over 20 per cent a month. The turnover from the retail business has doubled to about Rs 200 crore this year. Modi says Modicare will double growth in a year or two. He is also hopeful of taking the business overseas (to the US) next year.

Talking about his new product range, Modi says: “If you want to succeed in direct selling, your product has to have a difference. A customer will buy your product only if it offers some unique advantage over the other products in the market. One must understand that the buyer here makes a special effort to buy.”

Events and activities like what the company has planned, Modi says, are important for members and buyers to understand the uniqueness of the new products as well as business opportunities. “These are not events for just unveiling the new products, but the members here are given proper demos on the USP of the products as well as on how to properly use them, which also helps them understand how they can sell the products.”