Business Today

Getting more direct

Direct selling companies are embracing new channels of marketing and sales for enhanced credibility and higher growth.

N. Madhavan | Print Edition: October 4, 2009

Direct selling means the marketing of consumer products/services directly to the consumers generally in their homes or homes of others, at their workplace and other places away from permanent retail locations, usually through explanation or demonstration of the products by a direct seller.
Indian Direct Selling Association

This definition may well need a tweak if the recent measures of William S. Pinckney, Managing Director and CEO, Amway India and some of his colleagues in the Indian direct selling industry are any indication. Estimated at Rs 3,300 crore (2008-09) and employing about 1.6 million distributors, the Indian direct selling industry is abandoning the traditionally unique elements of direct selling— not having a fixed retail location and publicity through word of mouth—in favour of retail infrastructure and a steady increase in advertisements both in print and electronic media.

Direct marketing firms are opening retail outlets (experience centres), advertising in a big way.
The purpose is to add credibility and visibility to the existing direct selling channel.
Advertisements supplement word-of-mouth publicity, enlarging the customer reach.
Direct sales, if any, from the retail stores are being routed through a distributor.

Amway, the largest direct seller in India with Rs 1,128 crore revenues (2008), is leading the change. It has already set up five experience centres—one each in Bangalore, Pune, Kolkata, Delhi and Chennai. It will add 10 more in the next 12 months and over time upgrade all its 50 full-service centres across the country into experience centres. Swedish cosmetics seller Oriflame’s flagship experience centre is located at Connaught Place in New Delhi and it plans to set up similar facilities across all its 12 branches in the country. The premium food storage major Tupperware prefers makeshift access points in traditional malls and market places across the country.

Brick and Mortar
“The experience centres enable people to touch and feel our products. Dieticians are at hand, for instance, to check the body mass index, metabolism rate and suggest lifestyle changes. We can also do skin elasticity and wrinkle tests and suggest remedies, if need be. In a way, these centres help us to connect a lot better with our customers,” explains Pinckney.

Customers visiting these experience centres can buy the products as in any retail store but the significant difference is that the sale will be routed through a distributor in line with the principles of direct selling. “Ours is very much a people-to-people business. It is our distributors who sell to the customers. If we compete with them, it will go against the very grain of direct selling,’’ says Fredrik Widell, MD, Oriflame India, and Chairman, Indian Direct Selling Association (IDSA).

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