In the wake of the arrest of Amway India CEO and Managing Director William S. Pinckney and two other company directors, Douglas DeVos, President, Amway Corporation, discusses the challenges of running a direct selling company in an exclusive, email interview.
Amway Corporation President Douglas DeVos
DeVos is the son of the co-founder of Amway, Richard DeVos. The $11.3-billion Ada Michigan-based multinational has a presence in 108 countries. DeVos often visits India and is keenly tracking developments here.Q. Given the different rules and regulations in India, is Amway initiating any measures that will avoid similar trouble in future?
A. We remain committed to our employees, distributors and the Indian marketplace. Throughout our history, we have had regulatory struggles and challenges to our business model
. We strongly believe in our model, and in the spirit of entrepreneurship. We believe there is a need for our business in the Indian marketplace, as we have seen individual lives transformed by the opportunity to own a low-cost, low-risk business of their own. We are committed to supporting these men and women, and will work as long as it takes us to reach that understanding of our industry where ethical direct sellers are allowed and encouraged to operate.
Amway has amended its business model to the marketplace in many countries, even long after we established operations there - China, the United States, many countries in Europe have seen changes to our operations to reflect the updated needs of the consumer, or the regulatory environment. We continuously improve our business as we strengthen older markets with the best practices tested in newer markets. In this case, however, we feel the solution is clarity of regulation, where direct selling of products and services appears to be excluded from the law under which we are challenged.Q. Is Amway going to initiate a dialogue with the Indian authorities to resolve the issue?
A. We have always fully cooperated
in any investigation, and we are working to understand the information they may need to resolve the complaint. This unfortunate situation brings ever greater importance to the need for fair and balanced legislation that allows honest, ethical direct sellers to operate and invest in the India without such distractions.Q. You have stated that this move has hurt the company's confidence. Will you take any step towards restricting your business exposure in this country?
A. We have a significant presence in India - and have a made significant commitment to the economy and local communities where we operate, for more than 15 years. Amway will begin building its first manufacturing plant in Tamil Nadu, India, later this year. Nutrition, beauty and personal care products will be manufactured at the site. The $95 million facility is scheduled to be completed in 2015.
Our confidence - and that of the entire direct selling industry - may ordinarily be shaken by these actions, and the lack of clarity in enforcement of a law aimed at investment schemes. As a $11.3 billion global company with significant physical presence in India, more than 500 employees and 550,000 distributors, we have substance behind our opportunity.
These events challenge our ability to support our distributors' businesses, and many of them are individuals and families who depend on Amway for needed income. They challenge our ability to be a good customer of our contract manufacturers and suppliers, and our ability to sustain community partnerships in India as well. This was not fair to our three affected employees, and we hope there are more civil and constructive ways to handle consumer disputes in these markets going forward.