Tuesday, November 17, 2009

Makeover time for direct sellers

NEW DELHI: Amway is changing its way. The largest direct selling company in the world, which has emerged a global retail giant over the last 50 years with minimal advertising and no store presence, will soon start product advertisement as it increases its adspend.

And its showing the way too. The US-based wellness and personal care products firm is part of an army of direct sellers in India that has woken up to the need for complete brand-building exercise through mass media.

Oriflame, Tupperware and Modicare have all started spending more on advertising and even tying up with retailers as India’s Rs 3,300-crore direct selling industry is bracing up for increased competition from traditional players who have added direct selling and e-tailing to widen their reach to rural and semi-urban areas.

Other direct sellers such as international cosmetics brand Jafra and wellness brand New-skin too are looking at advertising their products.

Tupperware, an international brand of food storage, preparation and serving items, recently tied up with the country’s largest retailer Future Group’s Big Bazaar to display its products at select outlets during the festive season.

“We have realised the importance of a complete brand-building exercise,” says Asha Gupta, MD of Tupperware India. The company also tied up with ICICI Bank last month to reach out to the latter’s corporate clients and co-branded Bollywood movies Billu Barber and Namaste London as part of its 360-degree marketing exercise.

Amway has seen its spend on advertisement rise from about Rs 4 crore in 2005 to close to Rs 15 crore this year. “Amway does not traditionally advertise but we realised that India was a different market and that we would need to supplement sales force’s efforts with brand campaigns in mainstream media,” says Bill Pinckney, CEO and MD, Amway India, a Rs 1,128-crore enterprise.

So long, Amway’s campaigns focused on building the corporate brand. Next year, the maker of largest vitamins dietary supplement brand Nutrilite, Artistry skincare products and Persona premium soaps, plans to start product advertisement.

The company is also encouraging its 5.5-lakh distributors to tie up with salons and beauty parlours to sell its range of personal care products. Cosmetics brand Mary Kay has been advertising ever since its entry into the country in 2007. “We utilise outdoor, regional print media and radio advertising to complement the sales forces’ efforts,” says Renuka Dudeja, senior manager, communications and consultant marketing programmes, at Mary Kay India.

The Rs 100-crore FMCG brand Modicare plans to spend over Rs 2 crore on advertisement next financial year, according to Manisha Amol, VP, marketing, at Modicare.

With companies taking the mass media route, India’s 15-member direct selling industry is expected to retain if not accelerate last year’s growth rate of 17%. Way to go.


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