EXECUTIVE SUMMARY

Amway Corporation is a unique company. It is defined by the fundamental

philosophy of helping people help themselves. Amway has helped millions of
people run their own independent business around the world. India with its rich
reservoir of will, talent, manpower and enterprise is perhaps the most fertile and
untouched ground for the Amway Corporation. The focus of this project is
based on studying a single organization i.e. Amway India. This research has
been conducted for Understanding the reasons behind the growth and the future
plans of Amway in India.

The objectives of the research project is to understand the factors and strategies
behind Amway Corporation‘s growth and expansion plans in India, satisfaction
rate of Amway product consumers, challenges faced by Amway in India,
marketing and business plan of Amway India, etc.

The Data is collected from various sources like questionnaire, websites, books,
magazines, newspaper articles, etc. The research design is exploratory and
conclusive in nature. The research project‘s sample size is 134. The data is
collected from people of different occupations. It is a Non probability Sampling.

An attempt has been made to study the company‗s perspective in the Indian
market and analyze on how the company plans its expansion in India. The
Research study needed to be completed within a specified time i.e. two months
in certain areas. So, the findings cannot be generalized as a whole.

I have finally concluded my research by providing a conclusion and also

suggested some recommendations like launch of trial packs, reduction in prices
of products, etc. on the basis of my research.

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 INTRODUCTION

Amway is an abbreviation for "American Way" and was coined in 1959 by company
founders, Jay Van Andel and Richard DeVos. Short, unique and easy to remember, Amway
has been registered as a corporate name and trademark ever since.

In the following decades, Amway Corporation successfully established itself as a leading

multilevel marketing business, built on strong values and founding principles that continue to
sustain our company today. The business is built on the simple integrity of helping people
lead better lives.

Today, Amway is a multibillion-dollar international business representing freedom and

opportunity to millions of people in more than 100 countries and territories around the world.
Amway generates US $ 11.8 billion (January - December '14) in sales at estimated retail
through this global product distribution network. Amway offers over 3 million Business
Owners the inspiration to grow the businesses, and they work hard to provide new and better
ways for them to achieve their life goals.

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 HISTORY
A SOLID FOUNDATION:
Rich DeVos and Jay Van Andel's friendship actually began with a business proposition, when
Rich struck a deal with Jay for a ride to school for 25 cents a week. After high school they
entered the military, but they planned to start a business together after separate tours of duty.
A friendship formed and became a business relationship that has lasted to this day.

THE EARLY YEARS:

Amway quickly outgrew its original facilities in the basements of Rich DeVos's and Jay Van
Andel's homes. In its first full year of business, Amway's sales were more than half a million
dollars.

THE DECADE OF GROWTH:

As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol plant
and went on. The '70s began with sales of more than $100 million at estimated retail, and
kept going strong. After a lengthy investigation, the FTC verified that Amway is a genuine
business opportunity and not a "pyramid."

Amway's story began with the friendship between two youths who would become the
founders. Jay Van Andel, born in Grand Rapids, Michigan, in 1924, and Richard M. DeVos,
born in the small nearby community of Ada in 1926, became friends at Christian High School
in Grand Rapids. Their common Dutch heritage of hard work, thrift, and entrepreneurship
drew them together.

Both served in the Army Air Corps during World War II. Returning to Michigan after the
war, they founded Wolverine Air Service to offer flying lessons. After selling Wolverine and
a couple of other small businesses, the two young men bought a schooner and sailed off to

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see Latin America. The vessel sank in the Caribbean, and the two spent the next six months
in South America; when they returned to Michigan, they started the JaRi Corporation to
import and sell Caribbean handicraft.

THE BILLION-DOLLAR DECADE:

The '80s will be remembered for the first Billion Dollar Year at estimated retail in 1980.
Building expansion at Amway World Headquarters continued at breakneck speed as Amway
scrambled to keep pace with demand, opening its new cosmetics plant in Ada, Michigan.

THE NEXT GENERATION:

As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families
took the helm during the '90s. The Policy Board was formed and Steve Van Andel and Dick
DeVos succeeded their fathers as Chairman and President. Distributors witnessed a similar
trend, with the second generation of many distributor families taking on important leadership
roles.

Left to Right: Steve Van Andel (Chairman) and Doug DeVos (President)

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NEW HORIZONS:

In 2000, Amway prepared for a new century and a new exciting era.
Almost 50 years after Amway began, the DeVos and Van Andel families created a new
structure to meet the challenges of this new century. A parent company, Alticor, was
established with subsidiaries Amway, Quixtar and Access Business Group—the latter to
consolidate manufacturing and distribution for the enterprise. At the helm of Alticor are Steve
Van Andel (Chairman) and Doug DeVos (President), jointly holding the Office of the Chief
Executive. Today each area of the business, including Amway, has the freedom to build on its
strengths.
Amway continues to be a leading company in the direct selling industry. Its fundamental
principles—freedom, family, hope and reward—hold as true today as they did in the very
beginning.

FOUNDER'S FUNDAMENTAL
Rich DeVos and Jay Van Andel built the Amway business on the following principles, which
they and their families believe constitute a sound foundation for a meaningful life.

Freedom
Provides conducive environment in which to live, work, achieve and grow. The Amway
business recognizes supports and expands freedom, which is both personal and economic. It
gives the freedom to operate as independent business people and conduct a full-time or part
time business.

Family
The family is our primary social structure, providing love, heritage and legacy. The Amway
business respects and supports the family, as evidenced by the Amway Board of Directors
and the prominence of ―family‖ in Amway business. Amway provides the opportunity to
build a family-owned business which can be passed on to generations.

Hope
Hope gives us the power to transform our lives in positive ways. It is a force that allows us to
envision dreams, establish goals, and achieve great things. By offering hope, we open
windows of possibility for others, irrespective of social status, profession or educational
background.

Reward
Reward involves the shared action of giving and receiving. Reward helps us grow, either as
the giver or the recipient, and there are many ways we are rewarded. Reward is integral to the
Amway business as we help each other grow as people and as entrepreneurs. Hard work is
followed by high rewards.

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In 1949 DeVos and Van Andel became distributors of vitamins for the Nutrilite Company of
California. They enjoyed modest success from their own retail sales and from bonuses earned
on the sales force they created in the Midwest. However, increasing government regulations
and an internal conflict in Nutrilite led Van Andel, DeVos, and several other leading Nutrilite
distributors to start their own venture. In April 1959 they created The American Way
Association, later renamed the Amway Distributors Association, to protect the independent
distributors. They chose as their first product a biodegradable liquid organic cleanser made by
a small Michigan firm, the kind of high-demand merchandise that could be easily sold by
MLM. By September 1959 the Amway Sales Corporation and the Amway Services
Corporation were begun to assist the distributors. Van Andel and DeVos, with the help of
their wives and a handful of employees, began operations from offices in their basements.
Van Andel created sales literature and supervised new product development; DeVos
motivated and trained new distributors.

The company rapidly expanded. The first full year of operations in 1960 resulted in gross
sales of $500,000. That figure doubled in each of the next two years, and in 1964 it reached
$10 million. Thousands of distributors signed up each month. The expansion was so rapid
that as soon as the company moved into new facilities, they were already crowded. In the
company history, Commitment to Excellence: The Remarkable Amway Story, DeVos noted,
"We were always scrambling, just trying to catch up on back orders, working to train people
adequately."

In 1964 the business underwent a major reorganization. The three divisions--sales, services,
and manufacturing--were merged to create the Amway Corporation, with Van Andel as
chairman of the board and DeVos as president. Major business decisions were always made
jointly by the two founders.

A laundry detergent, SA8, was introduced in 1960. Amway's reputation for selling soap was
based primarily on its experience with this product. Other products included a dishwashing
liquid, aerosol shoe spray, cookware, hair products, and cosmetics. In 1962 Amway started
international growth, with its expansion into Canada. In 1968 the Personal Shoppers Catalog
allowed distributors to sell merchandise made by other companies. Catalog sales increased
thereafter.

The 1960s also brought some false starts and problems for the new firm. It began marketing
underground fallout shelters, for example, in an era when civil defense against atomic
warfare was a priority, but gradually consumers lost interest in the shelters. Other short-lived
products included 110-volt automobile generators and waterconditioning units. It was not
surprising that some items were not successful, however, for by 1968 the company was
selling more than 150 products through its 80,000 distributors.

In July 1969 Amway's aerosol manufacturing plant burned completely to the ground. Losses
were estimated at $700,000. The next day plans were made for a temporary substitute

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supplier and a new facility. Six months later the new facility was completed and the company
moved in.

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Commercial Sponsorships:
In December 2006, Alticor secured the naming rights for the Orlando Magic's home
basketball arena in Orlando, Florida. The Orlando Magic are owned by the De Vos family.
The arena, formerly known as the TD Waterhouse Centre, was renamed the Amway Arena.
Its successor, the Amway Center, was opened in 2010, and the older arena was demolished in
2012.

In 2009, Amway Global signed a three-year deal with the San Jose Earthquakes Major
League Soccer team to become the jersey sponsor.

In March 2009, Amway Global signed a multi-year deal to become the presenting partner of
the Los Angeles Sol of Women's Professional Soccer. The deal, however, would last only one
year, as the Sol folded the next year.

In 2011 Amway signed a three-year deal to be the presenting sponsor of the National Hockey
League's Detroit Red Wings.

Since 2012, Amway has been the title sponsor of the Canadian Championship, an annual
soccer tournament.

International Expansion:
Amway expanded to Australia in 1971, to parts of Europe in 1973, to parts of Asia in 1974,
to Japan in 1979, to Latin America in 1985, to Thailand in 1987, to China in 1995 to Africa in
1997, to India and Scandinavia in 1998, to Ukraine in 2003, to Russia in 2005, and to
Vietnam in 2006.

In 2014, a Russian loyalty card program called "Alfa-Amway" was created when Amway
joined with Alfa-Bank.

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 RESEARCH METHODOLOGY

Formulating The Research Problem:

 Problem Statement:
“To understand the strategies behind Amway Corporation‘s growth and future expansion
plans in India‖

 Unit Of Analysis:
Amway Corporation - Amway is an abbreviation for "American Way" and was coined in
1959 by company founders, Jay Van Andel and Richard DeVos.
Amway Corporation is one of the largest Direct Selling companies in the world. Amway
India is a wholly owned subsidiary of US $ 11.8 billion Amway Corporation, Ada, Michigan,
USA.

 Characteristics Of Analysis:
Strategy - A method or plan chosen to bring about a desired future, such as achievement of
a goal or overall aim.

 Time And Space Boundary:

2 months and in Mumbai Suburbs i.e. from Andheri to Dahisar.

Objectives Of The Research Project:

 To analyze if the consumers are willing to pay higher prices for eco-friendly products.
 To understand the satisfaction rate of Amway product consumers.
 To describe the challenges faced by Amway in India.
 To study the marketing and business plan of Amway India.

Research Design:
 The research design is exploratory in nature.
 It is useful to find out views and attitudes of respondents towards Amway India‘s
Products and Business Plan.

Sample Design:
 The survey was conducted of 134 people. So, Non-probability sampling will suit the best.
 Convenient sampling is taken into consideration.

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Sources of Data:

Primary • Questionnaire

Data
• Websites
Secondary • Newspaper Articles
• Books
Data • Magazines

Limitations:
 The results are based on primary data.
 The accuracy of the result is also limited to the reliability of methods of investigation,
measurement, and analysis of data.
 The data collected may or may not be accurate because of the respondent might have
been bias.

Questionnaire:

1. Gender
Male 50%
Female 50%

2. Age
Below 15 0%
15-25 years 96%
25-35 years 4%
35 years and above 0%

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3. Have you ever used an Eco-Friendly Product?
Yes 89%

No 5%

Mayebe 6%

4. What do you prefer? Eco-friendly or Chemical Product?

Eco-Friendly Product 98%

Chemical Product 2%

5. Have you heard about Amway Corporation?

Yes 87%

No 13%

6. Are you aware about the concept of Network Marketing or Direct

Selling Marketing?
Yes 70%

No 12%

Maybe 18%

7. Have you used Amway products?

Yes 73%

No 27%

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8. What are the important factors that influence you to buy Amway
products?

Advertisement 25%

Word of mouth 39%

Internet 5%

Personal Choice 23%

Others 9%

9. How many brands of Amway do you know?

All 6

Nutrillite 38

Artistry 5

Attitude 14

Santique 9

LOC & SAB 6

None of the above 4

10.How would you rate the quality of Amway‘s product?

Very High Quality 19%

Neither High or low quality 34%

High quality 45%

Low quality 2%

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11. What is your level of satisfaction using Amway product?

Excellent 19%

Average 29%

Good 52%

Poor 0%

12. How likely is it that you would recommend Amway product to a

friend or a colleague?

1 2 (3.6%)

2 7(12.5%)

3 26(46.4)

4 18(32.1)

5 3(5.4%)

13. Who do you think is the biggest competitors of Amway in India?

Herblife 36%

Tupperware 32%

Avon 7%

Others 27%

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14. According to you is the future of Amway in India bright?

Yes 84%

No 16%

15. How long you have been using Amway products?

1-2 years 29%

Less than 6 months 34%

I haven‘t made a purchase yet 29%

More than 6 month less than 1 8%

year

16. Will you purchase Amway product‘s again?

Yes 54%

No 8%

Can‘t say 38%

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AMWAY’S VALUES

Vision
Inspiring people to live better lives.

Mission
To provide the best business opportunity. To deliver exceptional quality products to urban
and semi urban homes in the areas of nutrition and wellness, cosmetics, personal care, home
care, home tech and insurance.

Integrity
Amway will uphold the highest personal and professional integrity which demonstrates
honestly, loyalty, respect and high ethical standards in all their responsibilities, obligations
and other activities. They are committed to behave at all times in accordance with the ethical
practices of the organization.

Trust
Building reliability and dependability for self by displaying commitment, honesty,
confidentiality and consistency in all actions.

Service Orientation
Amway is committed to serve their customers to fulfill their needs by focusing efforts on
discovering and thereby meeting stated and unstated requirements.

Partnership
Amway will collaborate across boundaries and find common ground by sharing ideas and
resources, with a wide range of stakeholders. It will develop networks and build long term
alliances with internal and external customers.

Recognition
Amway is committed to honor, encourage and support individuals and teams who contribute,
through their behavior and actions, to the success of the organization.

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 AMWAY INDIA PROFILE

William Pinckney – CEO of Amway India Anshu Budhraja – GM

Amway India

General Manager’s Message:

India has changed and so has the way it is perceived. Initiatives in India are being rolled out
globally. This thing about having two parallel brands — local and global — is being
replicated elsewhere in Latin America. Business challenges, regulatory environment,
competitive intensity — I don‘t think any other country in the world is as intense as India.

There is a huge potential for direct selling in India and it is yet to be exploited. India has
always been a key market. We are among the top-10 markets for Amway globally. But, my
target is to have India feature in the top-three in the next five years.

We are going to enter newer product segments like consumer durables and plan to launch
cookware range in India in 2017. New products in the nutrition and beauty category would
also be launched. The company has planned digitally-enabled next-generation stores and is
working with Microsoft for the project. The first such store would be launched in Bengaluru
later this year.

The Amway story began with two founders of Amway – Rich DeVos and Jay Van Andel,
who as business partners shared a belief that with encouragement and hard work anyone can

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move to a better place. This belief is articulated through the Amway vision of helping people
live better lives. Our vision and Founder‘s Principles guide us on how we do business and
drive our behaviours around our employees, customers and neighbours in communities
through the world. Leadership, employees, distributors – together, we fulfil our vision of
helping people live.

When it comes to our commitment to corporate citizenship, we make a serious and concerted
effort every single day of our lives to reach out and help people improve their lives, moving
up the living value chain where they currently are to where they aspire to be. We have and we
always will believe in doing better and being better. Amway India will continue to work in
making a difference, one by one.

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INDIA‘S NO. 1 DIRECT SELLING COMPANY

 Amway India is a wholly owned subsidiary of US $ 11.8 billion Amway Corporation,

Ada, Michigan, USA. Amway Corporation is one of the largest Direct Selling
companies in the world. It has a presence in more than 100 countries & territories.

 Established in 1995, Amway India commenced commercial operations in May 1998

and has emerged as the largest Direct Selling FMCG Company. The Company has its
headquarters in the National Capital Region of India - New Delhi.

 All its products are covered by a 100 per cent Money Back Guarantee. If not
completely satisfied with the product, the consumer can return it for a 100% refund.

 There is no joining fee for the Amway business – any adult can enroll as an Amway
distributor, without any payment.

 Amway India offers Indian citizens an unparalleled opportunity to own and operate
their own business selling more than 140 high quality consumer products.

 Amway India recorded a total turnover of over Rs. 2046 crores for the financial year
2013-2014.

 Amway India has 500 full time employees and has generated indirect employment
for 2000 persons at all the contract manufacturer locations.

 The Company has provided income-generating opportunities to over 5,50,000 active

independent Amway Business Owners.

 Amway India provides free and unlimited training to all its distributors to help them
grow their business. Amway India conducts over 20,000 training sessions during an
average 12-month period with an attendance of over 1.5 million Amway Business
Owners and prospects.

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NATIONAL PRESENCE:
In thirteen years of commercial operation, Amway India has established a nation-wide
presence of over 140 offices and 55 city warehouses and four regional mother
warehouses. The distribution and home delivery network set up with the support of
independent logistics partners is spread across over 5,500 locations.

MANUFACTURING:
Almost all Amway India products are manufactured in the country through seven third party
contract manufacturers. To bring the identified contract manufacturers‘ production facilities
and skills to international standard, Amway has invested in transfer of state-of-the-art, world-
class technology to the contract manufacturers free of cost.

PRODUCTS:
At present, Amway India offers over 140 products in five categories. They are Personal care
category, Home Care category, Nutrition & Wellness category, Cosmetics and Great Value
Products. Amway India Enterprises has set-up a dedicated R&D centre in India, which will
be its third R&D centre globally.
The products match Amway‘s global quality standards. Amway products are environment
friendly, and are not tested on animals. Amway encourages the return of its used product
bottles for re-cycling and to prevent their misuse.

PROMOTING FREE ENTERPRISE AND SELF-EMPLOYMENT:

Amway distributors follow a Code of Ethics and Rules of Conduct consistent with the World
Federation of Direct Selling Associations (WFDSA), which defines the goals, principles and
responsibilities in building and operating an Amway business.
Amway India is a member of leading industry organizations including FICCI, CII,
AMCHAM, USIBC and IDSA

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PRODUCTS AND BRANDS

Amway India offers over 140 products in five categories - Personal care category, Home
Care category, Nutrition & Wellness category, Cosmetics and Great Value Products.

BRAND PRODUCTS DETAILS

NUTRILITE Nutrilite is the world‘s
No.1 selling Vitamins and
dietary supplements
brand*.Nutrilite is a
brand of mineral, vitamin,
and dietary
supplements created in
1934 by Dr. Carl F.
Rehnborg. Offering a
wide variety of nutrition
products that range from
vitamins to dietary
supplements, the
NUTRILITE brand is a
renowned addition to a
healthy lifestyle.

SATINIQUE The SATINIQUE brand

offers a wide array styling
products for stronger,
healthier looking hair.

ARTISTRY Artistry was launched in

1968 as a product line of
skincare under
the Nutrilite brand and
continues to utilize
Nutrilite research and
technology, including
patented Nutrilite extracts
which are organically
grown under meticulously
supervised conditions in
Nutrilite's certified
organic farms. Setting
standards in skin science
and celebrating your

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 beauty, a global leader in
skincare and makeup
products. As of 2012, the
Artistry range included
over 400 products.
Artistry is one of the
world‘s top five largest-
selling Premium
Skincare brands*.

ATTITUDE Attitude is the latest

addition to the skin care
range of Amway. The
products are
manufactured to cleanse,
moisturize and replenish
the skin. Natural plant
extracts from mango
seed, rosemary and
coconut water are used in
manufacturing the
products. Attitude
Amway also offers you
skin care products to
cleanse, replenish and
moisturize your skin. This
company offers cleansers,
moisturizers and toners
are suited for dry and oily
skin

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PERSONA & Great Value Product
DYNAMITE Range offers you Great
Quality, Great
Performance and a Great
Price.

Dynamite's range of male

grooming products,
formulated internationally
is designed to deliver the
ultimate grooming
experience.

LOC, SA8, etc. Amway‘s Home Care

Brands provide complete
cleaning systems that fit
with everyone‘s needs.
Their versatile, effective
product systems offer the
features and benefits
consumers want. No
matter what your lifestyle,
Amway‘s Home Care
products make light work
of your cleaning chores.

SA8 Gelzyme is India's

only 3-in-1 laundry
detergent which pre-treats,
cleans and softens.

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 AWARDS AND RECOGNITION
There are many Awards and Recognition achieved by Amway in India as well as Globally
here are some of them:

 Amway's Atmosphere ranked #1 world best seller in residential air treatment systems
– 2013.
 Amway/Alticor ranked as 18th largest beauty company in the world – 2013.
 Amway North America ranked #32 largest Internet Retailer – 2013.
 Amway named a Top 10 US Household and Personal Products Company – 2013.
 Amway India wins Asian CSR Leadership Award – 2013.
 Amway ranked 25th largest private company in the United States – 2012.
 Amway India wins CMO Best Practices CSR Award – 2012.
 Amway Nutrilite - Most trusted brand India -2012.
 Amway India wins "The Aaj Tak Care award for Education" – 2012.
 Amway ranked one of the top charitable companies in Russia - 2011
 Amway recognized as World Trader of the Year by West Michigan World Trade
Association – 2011.
 Amway honored with Lifetime Achievement Award for Innovation – 2010.
 Amway's Eva Cheng named one of the World's Most Powerful Women -2009.
 Amway India - Presented an award by the World Blind Union (WBU), for sterling
contribution to improve and elevate the quality of life of visually impaired children',
at a function in Delhi on Dec 2nd 2004. The award included a citation and a large-
sized statue of Saraswati, the Goddess of Knowledge, was presented by the Lt
Governor of Delhi, Shri Vijai Kapoor. WBU is an apex body for the visually impaired
that enjoys consultative status with the United Nations.
 Amway India - The Surat Raktdaan Kendra felicitated Amway India at their annual
function on 5th Oct, 2003, for the largest number of donors at a Blood Donation
Camp (BDC) held by any financial and commercial institution and industry. The
Mayor of Surat - Snehlata Chouhan - presented a trophy and a certificate of
appreciation.

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 Amway India - Presented the Millenium Outstanding Service Award 2000, by the All
India Confederation for the Blind (AICB), in recognition for work carried out for the
visually challenged.

 Amway India - Amway also received the Hajee Sulaiman Omar Memorial Ever
Rolling Shield, by the Madurai Medical College. Amway was the ONLY corporate
entity to conduct a BDC on such a scale - rest of the camps are held by educational
institutions – undated

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SALES DATA OF AMWAY INDIA

INTERPRETATION:

The sales revenue of Amway India was Rs. 99 crore in the year 1998 i.e. the first year and the
growth was more than 100% in the second year 1999.

Years 2003, 2004 & 2005 were steady for Amway India with the sales revenue earning being
stable at around 600 crores.

There was high growth from Rs. 799 crore in 2007 to Rs. 1128 in 2008 and the growth rate
was very good till the year 2012.

In the year 2013 Amway India‘s sales revenue dipped around 20% because of the negative
impact of William Pinckney, CEO of Amway India‘s getting arrested.

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 GLOBAL DIRECT SELLING MARKET

Global Direct Selling Market Size:

Direct selling is a USD 167 billion industry globally. While the industry grew at a low rate of
5.4 per cent in2012, over 2011 (growth rate of 19.7per cent), due to global economic
slowdown, the long term growth prospects of the industry remain robust.

Number of Direct sellers:

The direct selling industry tends to benefit from in-person contact for the demonstration and
sale of products, and therefore provides business entrepreneurship opportunities for a large
number of people. The opportunities in the industry has more than doubled over the last 11
years (2001-2012), and the number of direct sellers have increased to 89.7 million direct
sellers in 2012 from 43.8 million direct sellers in 2001.

Gender-wise participation in the Industry:

As of 2012, 75 per cent of females were part of the industry. Direct selling has given many
women, who found it difficult to work away from home, an alternative earning opportunity in
their homes. Thus, enabling them to maintain a work-life balance.
Cosmetics and personal care is the biggest category capturing 35 per cent share globally in
the direct selling market, followed by wellness products and household goods.

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GLOBAL MARKETS

Asia Pacific:
 Asia Pacific is the largest market for direct selling with a 44 per cent share in the
global direct selling market, and has been growing at a CAGR of 11 per cent to reach
USD73.2 billion in 2012 from USD 59.7 billion in 2010.
 The direct selling industry in the region engages ~46 million people as direct sellers.
 Japan, China, Korea, Malaysia, Taiwan, Thailand, Australia, Philippines, Indonesia
and India are billion dollar markets in the region.

North & South America:

 Americas account for 40 per cent of the global market and engages ~31 million
people as direct sellers.
 USA and Canada are billion dollar markets in North America engaging 16.6 million
people as direct sellers.
 Brazil is the largest market in South & Central America capturing 45 per cent share
followed by Mexico, Colombia, Venezuela, Argentina and Peru which are also billion
dollar markets.

Europe:
 Europe accounts for 15 per cent of the global direct selling market, has grown at a
CAGR of 4 per cent from 2010 to 2012 and engages ~11 million people as direct
sellers.
 Western Europe accounts for nearly 70 per cent of the total market in Europe. France,
Germany, Italy, U.K. in Western Europe and Russia are billion dollar markets.

Middle East & Africa:

 Middle East and Africa are small markets for direct selling, capturing less than 1 per
cent market share.

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GLOBAL MARKET LEADERS

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AMWAY’S GLOBAL INVESTMENTS
Amway’s global investments in manufacturing, R&D exceed $355 million
Amway plans more than $355 million in manufacturing and R&D expansion, including four
facilities in the U.S., a new manufacturing facility in India and second sites in both China and
Vietnam.
 In 2012, Amway announced plans to invest nearly $185 million to build four U.S.
operations for manufacturing and processing NUTRILITE vitamins and supplements.

 A new $81 million nutrition soft gels and tablet manufacturing operation at the
company's Spaulding Avenue site in Ada, Michigan, is expected to create up to 200
jobs over a three-year period. Construction starts in 2013.

 A $24 million nutrition powder products plant unveiled in 2012 at the company's
World Headquarters created 50 new jobs in Ada, Michigan.

 A $42 million project in Buena Park, California, includes a new granulation facility to
support tablet manufacturing that is scheduled for completion in 2013; new research
and development facilities and pilot laboratories; and a two-story professional office
building.

 A $38 million Nutrilite Botanical Concentrate processing plant in Quincy,

Washington, which will process plants from the company's nearby Trout Lake Farm.
Construction is now underway.

 Ground breaking for the $95-million manufacturing plant in Tamil Nadu, India is
scheduled in 2013 with completion in 2015. In China, Amway will add a second
manufacturing plant in Guangzhou. The $75-million facility is scheduled to be fully
operational in 2016. Details for a second Amway manufacturing facility in Vietnam
will be released in 2013.

 U.S. expansion for Amway includes new research and development facilities and pilot
laboratories in Buena Park, California, home to the company's top-selling
NUTRILITE product brand. In addition, Amway will build a $10 million botanical
research and experience center in Wuxi, China, to integrate scientific knowledge used
in product development with the historic use of traditional Asian plants.

Page | 29
DIRECT SELLING MARKET IN INDIA

Direct selling market in India took off in 1990‘s with the influx of the large global direct
selling companies looking to tap the India opportunity.

In India, the industry came into

existence in early 1980s,
However, it really took off in
early 1990s soon after the
country opened up to the
global Market. The industry
witnessed major growth post
liberalization with many global
players entering the Indian
market. Amway was one of the
first major global direct selling
companies to enter India in the
year 1995. Which was
followed by company‘s like
Avon, Oriflame and
Tupperware in 1996. Around
the same time Modicare was
one the first few Indian
companies to adopt this
channel of distribution. Even
though many of the Indian
direct selling companies
initially started in the southern
part of India, today several of
them have pan India
operations.

In terms of revenue generated

Gujarat, Maharashtra, Tamil
Nadu, Kerala and Andhra Pradesh have the highest shares. Recently, the industry has
witnessed greater growth in the eastern part of the country and in many Tier 2 and Tier 3
cities with direct selling companies trying to reach out to customers in markets which have
remain untapped thus far.

Page | 30
The direct selling market in India is a INR 72 billion market today and is dominated by the
organized players contributing ~95 per cent to the market. The market has grown to become a
key channel for distribution of goods and services in the country, especially for health and
wellness products, cosmetics, consumer durables, water purifiers and vacuum cleaners.

However, it is still undeveloped as compared to global peers and the variety of brands and
products available in the country are lower than those in other economies. Going forward, the
growth of the industry is expected to be majorly driven by expanding markets and a strong
consumer base increasingly looking for quality products that add value, and are willing to pay
a premium.

However, currently the industry is facing many challenges in India. India lacks a systematic
policy that clearly defines the regulatory framework of the industry. There is no clear
definition for legitimate Direct Selling to differentiate it from Ponzi/Pyramid Schemes
attempting to disguise themselves as Direct Selling structures. As a result of lack of clarity,
fraudulent activities in the industry have increased and legitimate Direct Selling is being
confused with Ponzi/Pyramid Schemes.

The direct selling market in India has grown at a CAGR of 21 per cent over the last 5 years
from INR33 billion in 2008-09 to INR 72 Billion in 2012-13.

Indian Direct Selling Association:

IDSA is an autonomous, self regulatory body for the direct selling industry in India. The
Association acts as an interface between the industry and policy-making bodies of the
government facilitating the cause of direct selling industry in India. It strives to create and
further an environment conducive to the growth of direct selling industry in India, partnering
industry and government alike through advisory and consultative activities.

IDSA catalyses change by working closely with the government on policy issues, enhancing
efficiency and ushering in desired credibility, clarity and confidence in Direct Selling. The
Association has laid down certain features of a genuine direct selling companies. Further, the
IDSA has also set out a Code of Ethics which all IDSA members are required to follow,
however, there is no formal law or guideline.

Page | 31
DISTRIBUTION MODEL

Single-level marketing rewards the sellers for their personal sales activity. They cannot
sponsor any other distributorship or sales personnel. Income comes only in the form of
commission, or bonus, or retail markup, i.e., they receive payments through the sales they
make. A direct seller buys products from the parent company and sells them directly to his or
her customers. Home-based business people have been pursuing single level marketing for
years. Single-level marketing is suited for those sale people whose focus lie on the product
and service.

In the MLM compensation plan, each direct seller recruited can potentially recruit new
distributors and create a down line of direct and indirect distributors/sellers. Distributors
purchase products to sell to the consumers. They receive commissions and bonuses on the
sales made by them and the sales made by their down line direct sellers and retail markups.

Page | 32
 SOCIO-ECONOMIC EFFECT

Today, the direct selling market in India is estimated to be around INR72 billion. Industry
stakeholders suggest that the industry has also created a positive impact on several other
social and economic parameters

a. Additional income opportunities:

Direct selling provides additional income opportunities to a large number of people and
promotes micro-entrepreneurship. Currently, over 5 million direct sellers are estimated to be
engaged with the industry, and are projected to grow further with the growth of the industry.
In addition to providing income opportunities, direct selling also imparts transferable skills in
sales and management, which can be used outside the direct selling industry, as well.

b. Self-employment opportunities & Women empowerment:

The size of the Indian direct selling community has more than doubled between 2009-10 and
2012-13. The industry has seen an increase of almost 2.6 million distributors from about 3.2
million in 2009-10 to 5.8 in 2012-13. The industry offers self-employment opportunities to a
large number of people, specially women. Direct selling gives women the flexibility to
manage their time and balance their work and personal lives. The industry also offers women
financial independence and the improved ability to take care of their families. The industry in
FY13 provided self employment to nearly 60 per cent (3.4 million) female distributors which
increased 1.5 times from 2.2 million in FY10. Also many companies work towards the
empowerment of women. In 2008 Avon India in association with Avon foundation started the
Breast Cancer Crusade to increase awareness of the disease in the country.

c. Development of the SME sector:

Many direct selling companies in India outsource their manufacturing process to contract
manufacturers which are generally Micro, Small and Medium Enterprises (MSME) to
produce products domestically. As of 2011, nearly two-third of the products sold by direct
selling companies was sourced through MSMEs. Several direct selling companies also invest
in providing the right equipment and machines to the SMEs for production. Driven by these
initiatives, many SMEs have now developed capabilities to cater to the needs of other MNCs
and have commenced supplies to them, promoting India as a manufacturing destination.

Page | 33
d. Employment generation:
Besides providing additional income opportunities to direct sellers, the industry also
generates a large number of jobs. Majority of the direct selling companies outsource
production, packaging and distribution of their products, thus generating direct employment
across the value chain.

e. CSR initiatives:
In terms of responsibilities towards society, direct selling companies have been in the
forefront. Many of the companies involved in direct selling actively contribute towards social
activities. Avon‘s Breast Cancer Crusade and Amway‘s Sunrise project for education are well
known for their social impact.

f. Contribution to the government exchequer:

The operating model for direct selling generates tax contributions to the government across
its value chain. Total tax contribution by the direct selling industry to the government in
FY13 alone is estimated to be INR10 billion. This includes direct and indirect tax
contributions through corporate income taxes, import duties and VAT. Going forward, the
industry has the potential to create a significant social and economic impact in India. Our
estimates suggest that the industry has the potential to reach a size of INR645 billion by
2025, driven by growth in consumer markets and increase in the penetration of direct selling
to globally comparable levels.

g. Increase in product reach to Tier II, III & rural areas:

With about 70 per cent of India‘s population in rural areas, the Indian rural FMCG market is
still relatively untapped (with only 34 per cent
FMCG sales) Many direct selling companies are now expanding their reach and are trying to
enter Tier 2 and Tier 3 cities and rural areas, providing the consumers with knowledge about
different products and services. Maintaining good quality at affordable prices seems to have
led to an increased demand for these products and an increase in the number of products sold
through the direct selling channel. Increased focus on the agricultural sector would likely
boost rural incomes, and could provide better growth prospects for direct selling companies
going forward.

Page | 34
 AMWAY INDIA’S BUSINESS PLAN
Organizational Terms used in Amway:

IBO / ABO / AIE - Independent Business Owner / Amway Business Owner /

Amway Independent Entrepreneur (IBO): An IBO is, literally, an Independent
Business Owner: an individual or individuals who own and operate their own business,
which is powered by Amway
North America, formerly
Quixtar. IBOs are the CEOs
of their own businesses, and
they make many of the same
daily business decisions
other business executives
make. As independent
business men and women,
IBOs decide how active to be
in their business, what
products to sell and at
what prices, who to sponsor,
what hours to keep, and
other important decisions.
IBOs are independent
contractors; they are not
employees of Amway North America or Amway Corporation. As independent business
owners, IBOs are free to make decisions many others in business are not free to make.

Distributor: an older term for IBO

PV: Point Value is a value assigned to each product or service sold by Amway. An
IBOs monthly performance bonus bracket depends on total PV in a month.

BV: Business Volume is typically the wholesale cost of the product or service sold by
Amway. Performance bonuses are multiplied by the group’s total BV.

Page | 35
Performance Bonus is the monthly bonus paid by Amway to IBO‘s. The higher the PV, the
greater the percentage earned. In India the performance bonus ranges from 6% to 21%.

Retail Profit is the markup earned by an IBO when they sell a product to a consumer, either
personally or through an Amway website. Recommended retail markup ranges from 15%-20%.

Sponsor is an IBO who refers (sponsors) a new IBO to Amway, although IBO‘s do not get
paid to sponsor.

Upline is the term used to refer all the IBOs up in the line of sponsorship of an IBO.

Downline is the term used to refer all the IBOs down in the line of sponsorship
of an IBO. They are collectively also known as group.

Leg refers to a personally sponsored IBO and all of their down line.

Silver Producer is an IBO who has reached the maximum bonus level for one month.

Gold Producer Is an IBO who has reached the maximum bonus level for three months.

Platinum Or Direct Is an IBO who has reached the maximum bonus level for six months.
In India a Platinum is generating a minimum of approximately Rs. 10,00,000 in sales volume per
month.

Emerald a distributor with at least three legs generating Silver Producer volume for at least 6
months of a year.

Diamond a distributor with at least six legs generating Silver Producer volume for at least 6
months of a year.

Page | 36
 SALES AND MARKETING PLAN

Producer made a
product costing him Rs.
40 (including his profit)
C&F Agents
Amway‘s
concept of Big Distributors
Direct Goods Average
Selling. Transferring 60%
Directly from Whole-seller

Retailer

Consumer paid Rs. 100

Consumer can for the product.
save upto 60%
INTERPRETATION:

On an Average around 60% margin is taken by the Goods Transferring Agents. They only get
paid for transferring goods from Producer to the Final Consumer.

Amway‘s Sales and Marketing Plan explains that Amway is the Producer and it gives out upto
60% margin directly to its consumer and distributors by hiring a logistics company which will
supply goods to the consumer or a distributor directly.

Page | 37
DISTRIBUTION CHANNEL

INTERPRETATION:

In the Distribution Channel Diagram it is explained that Amway is the supplier to the distributor
and the distributor is connected with a Leadership and Motivational Organization from where he
gets motivation, training and support to market and sell the products. Then the distributor will
sell the products to its customer.

COMMISSION SYSTEM

INTERPRETATION:

In the Commission System Diagram it is shown that 1 pv = Rs.75 and how anyone can earn more
than their investment by the help of selling and recruiting.

Page | 38
KEY SUCCESS FACTORS

Let‘s now take a look at some of the factors that have propelled the Amway business to rapid
growth in India:
 Loyal & Captive Consumer Base of Distributors: Distributors have a personal stake
in ―growing with the business‖, so they are inclined to buy products themselves. They
are influenced to a great extent by the groups as well and are always encouraged to try
the product beforehand, to be able to sell it better.

 Consumer-Distributor Word-of-Mouth Magic: Being a friend/relative of the

consumer, the distributor would be expected to share similar tastes and interests.
Therefore, the distributor‘s recommendations would be trusted and acceptable. Many a
times, it is just tough to say ―no‖ to an old aunt or a good friend.

 Products: Product quality has been acknowledged to be really good, and endorsements
and training from specialists at the supplier‘s training centers builds positive perception
as well. Products are expensive, and high prices are justified on the basis of quality and
the concentrated form of the product, which implies lower cost per use.

 More & More Subscription Revenues: The ever-growing urban Indian middle class is
the ideal pool for potential distributors, looking to make extra cash which denotes
―success‖ and ―respect‖. The margins seem extremely attractive in India, since some
research revealed that prices for many products are identical to those in the US. Thus on
a pure PPP basis, Indian distributors are much better off. Amway boasts of almost 5.5
lakh active distributors today.

 Aggressive Product Launch Strategy: Since a captive consumer base exists, trials and
repeats are guaranteed to an extent, so revenues are accelerated by launching a new
product almost every month.

 India Specific Initiatives: First-time initiatives for the Indian market have been taken
up, such as mass advertising (which is not a usual practice in direct selling), smaller
SKU‘s (such as sachets) and tie-ups with big names such as BPCL and Standard
Chartered through petro-card/credit card schemes to add credibility to the business.
These factors have contributed tremendously to the huge success that players like
Amway have enjoyed in India.

Page | 39
COMPETITORS OF AMWAY

According to The Economic Times in 2011 Amway

India‘s products gave tough competition to big
FMCG company‘s popular products like Dabur red
toothpaste, Revital and ProtineX.

According to BSE in 2013 Amway India‘s turnover

was more than the some of the FMCG giants like
Emami, P&G and Gillette India.

Page | 40
 CHALLENGES FACED BY THE INDUSTRY

The direct selling industry, similar to the larger consumer industries faces issues of counterfeits
and general difficulty in doing business in India. However, the industry participants suggests that
the biggest challenge that the industry faces today is that of regulatory uncertainty and lack of
legislative support in recognition of the rightful industry.
 Regulatory Uncertainty:
The industry is adversely affected by lack of a proper legal framework which is compromising

the growth of the direct selling industry. There is no systematic and standard policy on direct
selling that is based on the constitutional structure. As a result many authorities have booked
direct selling companies for unlawful activities as under the Prize, Chits and Money Circulation
Schemes Act. The act, which was enacted much before the advent of direct selling in India has
an archaic understanding of issues, and is unable to distinguish rightful direct selling businesses
from malicious money circulation schemes.

Under the PCMCS Act customer complaints are acted upon as criminal offense and gives
investigating officers the power to arrest and seize company assets along with arrest of many key
individuals. This creates negative image of the industry in the mind of participants and potential
participants, who as a result do not realize the benefits of the direct selling business.
Apart from the ambiguity in the PCMCS Act, there are many other regulatory issues including a
lack of definition and separate provisions for the industry, which affect the industry adversely.
The regulatory challenge for the industry along with a potential solution roadmap has been
discussed in detail in the next section.

Page | 41
‗The police forces and the bureaucracies don‘t understand the direct selling industry. They
remain suspicious because they believe people cannot make money without any investment.
They label it as money circulation schemes even though there is no money circulation
involved.‘‘
- Promoter, Leading Indian Direct Selling Company

‗If the government sees the direct selling industry as its partner, the industry has massive
potential to grow and benefit millions in the country.‘
- MD, Leading Indian Direct Selling Company

 Counterfeit Products:
Direct selling products should not be sold through retail stores. However, it has been seen that,
many retailers become direct sellers and start off loading the products to the customers through
retail outlets. This leakage of products through traditional retail channels is contradictory to the
very nature of direct selling and needs to be adequately addressed. This channel also encourages
the sale of counterfeit products which affect the brand.

 Difficulty to set-up manufacturing facilities:

Many large direct selling companies in India are renowned MNCs. However, due to rigid labour
laws and poor infrastructure, many of these have found it difficult to set-up their own
manufacturing facilities in India. All states have different regulations and there is no centralized
federal system, making the process of getting clearances costly and time consuming.

 High Import Duties:

Many ingredients for the industry products are imported. Higher import duties add to the price of
the product and as a result make them more expensive for the final consumer adversely affecting
the demand for such products as they are available at lower prices in international markets.

Page | 42
CHALLENGES FACED BY AMWAY IN INDIA

Pinckney was arrested on 26 May, 2014 from Amway India‘s headquarters at Gurgaon and later
was produced before a court in district Kurnool, which sent him to judicial custody after
rejecting his bail plea.

He was subsequently arrested in other criminal cases registered against him in the state on
allegations of financial irregularities by Amway, a charge contested by the company. ―Our focus
is squarely on efforts to ensure that nothing like this happens again. Our commitment to Amway
Business Owners who sell our products in India is unwavering,‖ Andel and DeVos said.

Page | 43
 SWOT ANALYSIS

SWOT analysis of Amway India:

STRENGTHS:
 Based on the direct selling operations. Hence it can be a home based business. Everyone can
participate in the business. It‘s easy to get admission in Amway with easy root like internet.
 Training to staff.
 Functions are performed by IBOs.
 Organize meetings and events time to time.
 Have good customer service system.
 Backed by a 100% Customer Product Refund Policy produce faith and reselling attitude in
customers.
 Quality Products that Inspire Confidence.
 Almost no risk of money as world class quality Minimal start up costs gives strong base to
the beginning of business. The person who wants do something can make profit with
investment of low cost products which are easy to sell.
 A business with national and international scope gives more opportunity to the costumers.
 The possibility of financial security and freedom of time to enjoy life.

WEAKNESS:
 More power to IBOs gives critical structure to organization.
 Initially high entry cost leads to somewhat restrictions for business development.
 Rumors for direct selling operations.
 Focus shifted from selling products to recruiting IBO‘s.
 No specific Body Of Control to control the industry.

Page | 44
OPPURTUNITIES:
 Setup a manufacturing plant in all countries leads to better platform for company.
 Population of INDIA gives better opportunity to company to receive more profit.
 As the company name itself gives reliance and faith for the customer and buyer. So, it also
creates greater opportunity for marketing which leads to decrease in total expenditure of
company.

THREATS/COMPETITION:
 Too much freedom to IBOs.
 Change in government policy may affect to the profit and freedom of company.
 Competitors like AVON, HERBALIFE, TUPPERWARE, MODICARE etc creates lot of
competition in market which leads to strong marketing competition in the market.

Page | 45
 CORPORATE SOCIAL RESPONSIBILITY

Contribution to society or social well-being is core to the ethos and beliefs of

Amway and the commitment to social responsibility in India were initiated as long
back as 1996. Today, Amway Opportunity Foundation (AOF), the CSR arm of
Amway India, a registered non-profit organization, runs on the support provided by
more than 500 employees, 2000 indirect employees and more than 15 lakh
distributors, as AOF volunteers.

The objective behind the establishment of AOF was to act as the community
engagement arm of Amway India Enterprises to fulfill its mission and implement
various projects for the betterment of Indian community, through an independent
autonomous body distinct from the commercial operations of Amway.

AOF's National Project for the Visually Challenged had ensured that 85,000
school-going children, had access to Braille textbooks. 15 projects were
undertaken in as many as 12 states in this project, between 1999 and 2005.
More recently, AOF has channelized its energies in setting up sixteen fully-
equipped computer centres for visually challenged children across major cities in
India.

Page | 46
In 2008, AOF launched the global One By One campaign for children in India, and
partnered with 63 NGOs & institutions working in the areas of education and
healthcare for children.

Through this campaign, Amway has an opportunity to:

 Build edifices of social engineering and innovation that provide substantial
support that makes a strong impact to the lives it touches upon – those who are
differently able or lesser privileged,
 Give Business Owners, employees, affiliates and customers a cause for pride of
association that goes beyond the realms of business.
 Educate the larger community and peoples it lives and operates in on the need
to empathetically engage for various causes that help take the society
progressively forward.

Page | 47
 PROJECT SUNRISE

Project Sunrise a healthier and more productive

adult. In India alone over one and a half million
children die due to lack of prevention and care
about nutrition. Malnourished children develop
health problems that are easily preventable.
Knowledge of healthy eating and regular physical
activity remains sparse if any.

More so for those orphaned

‗Project Sunrise‘ was thus launched in 2008, under

Amway‘s global initiative called: the One by One
Campaign for Children. Under this project AOF
partners with local NGO‘s, identified with the help
of the local Amway A healthy child is more active,
stays in school longer, attends more regularly,
learns more and grows to be become community, across the country.

Every year more than 15,000 orphaned children are supported by providing clean
drinking water, education and nutrition intervention, greatly impacting their
basic healthcare. At workshops in orphanages across India, curious and
inquisitive minds have listened and learnt as Amway Experts and ABO‘s have
used innovative ways of teaching them about hygiene and nutrition, armed with
newly found knowledge and bright blue new school bags full of goodies AOF

Page | 48
gave them, they pranced their way into a healthier and informed future.
In addition to basic healthcare, partner agencies also benefited from sponsored
education fees for children, computer centre set ups and physiotherapy for
children with disabilities.

Page | 49
 FUTURE OF AMWAY IN INDIA
Driven by increasing share of middle income households and potential of
increasing penetration, the direct selling market in India has the potential to reach
INR 645 billion by 2025.

Growth Drivers / Key Trends:

 Direct Selling Penetration - Global comparison:

In China, the direct selling industry has flourished 2006 onwards and has grown
significantly over the past years. Currently, China‘s industry penetration stands at
twice that of India at 0.8 per cent.
Other Asian markets like Indonesia, Japan and South Korea have much higher
direct selling penetration levels. Malaysia has the maximum direct selling
penetration in Asia with 4.3 per cent.
India‘s direct selling penetration is the lowest among comparable economies at
~0.4 per cent of the retail sales. Given its under-penetration in global comparison,
it has a significant potential to growth going forward.

 Growth in Consumer Markets:

The overall industry growth in the key categories of direct selling such as health
and wellness, cosmetics & personal care, household goods, and others can fuel
direct selling growth.
Most of these categories, which are key contributors to the direct selling industry
are projected to grow at 10-15 percent.

 Increasing Personal Disposable Income:

Page | 50
Driven by robust GDP growth, the Indian household income is likely to triple by
2025, from INR 115,000 currently to INR 320,000 (approx.) Due to rise in
employment rate, disposable incomes has also increased resulting in improving the
sales of the goods and services across the direct selling industry.

 Urbanisation and Lifestyle Changes:

In 2011, about 28 per cent of India‘s population resided in urban areas which is
expected to see an increase and reach to 33 per cent in 2021 (1.5 times the growth
of overall population).
Urbanisation is expected to have a positive impact on the lifestyles of people as
they will likely have more exposure to better quality products and services.

 Significant rise of women in urban work force:

According to India‘s National Sample Survey, the proportion of working women in
urban areas increased from 11.9 per cent in 2001 to 15.4 per
cent in 2011.
As a result of more women being employed, there has been an increase in the
disposable income leading to increased capacity to spend. This will help further aid
the growth of the industry.

 Increasing reach of the direct selling industry:

Direct Selling companies are now expanding their reach and are trying to enter
Tier 2 and Tier 3 cities and rural areas, providing the consumers with knowledge
about different products and services
Maintaining good quality at affordable prices; demand for these products has
increased and has resulted in increase in the number of products sold through the
direct selling channel.

Page | 51
Increased focus on the agricultural sector could boost rural incomes, and could
provide better growth prospects for direct selling companies going forward.

 Self-employment opportunities:
The growth of the direct selling industry will likely be driven by on-ground direct
sellers. Considering global benchmarks for the industry, the industry can
potentially engage ~18million direct sellers by 2025.

 Increase in self-employment opportunities for the female population and

Employment generation:
The direct selling industry has traditionally had a higher participation from women.
Considering prevailing trends, by 2025, the industry can potentially engage over 10
million women as direct sellers providing additional income opportunities to the
households.
With an average of over 0.4 workers per INR 0.1 million of output generated, the
industry is expected to provide direct employment to 2.5 million people by 2025
through its manufacturing operations.

 Contribution to government Revenue:

Considering Market Potential and future growth of the industry to USD 645 Billion
in 2025, the contribution to the government revenue is also expected to increase 9
folds to ~INR 90 Billion by 2025.

Page | 52
 AMWAY INDIA FUTURE STRATEGY

 Targeting sales of Rs. 6,000 crore from current Rs. 2,000 crore in next 10 years.

 Increasing the logistics support for the distributors.

 Launching of new Brands and Products.

 Helping government to frame laws and legal framework for proper regulation of direct
selling industry in India.

 Making India a Manufacturing Hub for neighbouring countries in South Asia.

 Encouraging the distributors to buy products online.

 Localization of employees.

 Localization of Research and Development.

 Promoting Transparency and Credibility of company‘s management.

Page | 53
 AMWAY INDIA ENTREPRENEURSHIP REPORT

KEY FINDINGS:

 Most of the economically-developed states figure at the top of the list in terms of offering an
enabling environment and a growth oriented economy.
 Gujarat, Maharashtra, Karnataka, Tamil Nadu, Punjab and Himachal Pradesh are the states
which are leading Current Entrepreneurial Index.
 Rajasthan, Madhya Pradesh, Andhra Pradesh, Kerala, Jharkhand, Chhattisgarh are states
which aspirers to become the leaders in the future.
 States like Assam, Odisha, Bihar, along with the northern states of Uttar Pradesh and
Uttarakhand, figure at the bottom of the list.

Page | 54
KEY FINDINGS:

 Gujarat, Delhi and Himachal Pradesh are the states that show consistently high rankings in
terms of current entrepreneurial confidence as well as future entrepreneurial readiness.
 The eastern part of the country, along with some states of northern India, are lagging
significantly behind compared to other regions of the country with regard to
entrepreneurship. The western coastal region, along with a part of north India, is way ahead
of other states.
 Some of the states like Bihar, Chhattisgarh, Assam and Jharkhand show a high level of
openness as measured by the attitude of respondents toward entrepreneurship, but are at the
bottom of the list in terms of other indices.
 Odisha and Assam are the two states that find themselves at the bottom of the list in the case
of most of the indices.

Page | 55
DATA ANALYSIS AND INTERPRETATION

Page | 56
1. Gender

Gender

Male
50% 50%
Female

Interpretation
From the above pie diagram it is found that 50% of Male and 50% of Female

2. Age

Age
0% 0%
4%

Below 15
15-25 years
25-35 years
35 years & above

96%

Interpretation
From the above pie diagram it is found that 96% of people are from the age group of 15-
25 years and 4% of people are from the age group of 25-35 years and Below 15 and 35
years and above are 0%.

Page | 57
 3. Have you used an Eco-friendly product?

6%
5%

Yes
No
Maybe

89%

Interpretation
From the above pie diagram it is found that, 89% respondents have used an Eco-
friendly product and 5% of respondents don‘t use Eco-Friendly product and 6% of
respondent maybe used Eco-Friendly product.

4. What do you prefer? Eco-friendly product or Chemical product

2%

Eco-friendly product
Chemical product

98%

Interpretation
From the above pie diagram it is found that, 98% respondents prefer Eco-friendly products and
2% respondents prefer Chemical based products.

Page | 58
5. Have you heard about Amway Corporation?

13%

Yes
No

87%

Interpretation
From the above pie diagram it is found that, 87% respondents have heard about Amway
Corporation and 13% have not which means Amway India‘s Marketing through word of
mouth and promotional strategies have been successful.

6. Are you aware about the concept of Network Marketing or Direct Selling?

18%

Yes
12% No
Maybe
70%

Interpretation
From the above pie diagram we found that, 70% of people are aware about Network
Marketing or Direct Selling and 12% of people are not and 18% of people may be
knowing about it.

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7. Have you used an Amway products?

27%

Yes
No

73%

Interpretation
From the above pie diagram we found that, 73% of respondents have used Amway
products and 27% of them never used Amway products.

8. What are the important factors that influence you to buy Amway products?

9%
25% Advertisement

23% Word of mouth

Internet
Personal Choice
5% Others
39%

Interpretation
From the above pie diagram it is found that, 39% respondents have voted that
Word of mouth is the biggest factor which influenced them to buy Amway product
followed by 23% Personal choice, 25% Advertisement, 9% Other and 5% Internet.

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9. How many brands of Amway do you know?

40
35
30
25
20
15
10
5
0
All Nutrillite Artistry Attitude Santinque LOC & SA8 None of
above

Interpretation
From the above chart it is found that, 6 respondents know about all the brands of Amway
and 4 respondents said that they don‘t know about any brands of Amway, followed by 38
said they know about Nutrilite, 14 for Attitude, 5 for Artistry, 6 for LOC & SA8 and 9 for
Satinique.

10. How would you rate the quality of Amway‘s products?

2%

19% Very High Quality

Neither High or Low

Quality
45%
High Quality

34% Low Quality

Interpretation
From the above pie diagram it is found that, 45% respondents rated the quality of
Amway‘s products as High Quality, followed by 34% as neither high or low quality, 19%
as Very high quality and 2% as Very low quality which means more people think that the
products are of High Quality.

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11. What is your level of satisfaction using Amway products?

0%

19%

Excellent
Average
52% Good
Poor
29%

Interpretation
From the above pie diagram it is found that, the satisfaction level of 52% respondents is
good, 29% is average, 19% excellent and 0% said poor that means most of the people are
satisfied by the Amway products.

12. How likely is it that you would recommend Amway products to a friend or
a colleague?
30

25

20

15

10

0
1 2 3 4 5

Interpretation
From the above Bar graph we found that, when it‘s time to recommend people about
Amway the response of the people is average.

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13. Who do you think is the biggest competitors of Amway in India

25%
36% Herblife
Tupperware
Avon
7%
Others

32%

Interpretation

From the above pie diagram it is found that, 36% respondents find both Herbalife and
32% Tupperware, followed by 27% said others, 7% said Avon.

14. According to you is the future of Amway in India bright?

16%

Yes
No

84%

Interpretation
From the above pie diagram it is found that, 84% respondents said that the future of
Amway in India is bright and 16% said it is not which higher number of people have faith
in Amway in India.

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15. How long you have been using Amway products?

8%
1-2 years or more
29%
less than 6 months
29%
I haven't made a purchase
yet
more than 6 months less
than 1 year
34%

Interpretation:
From the above pie diagram it is found that, 34% respondents are using Amway products
from less than 6 months, followed by 29% are using from 1-2 years or more, 29% have
not yet purchased the products and 8% respondents are using the products for than 6
months but less than a year.

16. Will you purchase Amway product‘s again?

38% Yes
No
54%
Can't say

8%

Interpretation:
From the above pie diagram it is found that, 54% respondents will buy Amway products
again, 38% can‘t say and 8% said that they will not buy the products again.

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 CONCLUSION
The direct selling industry‘s potential to reach a size of INR 645 billion by 2025 driven by the
growth in consumer markets and increase in the penetration of direct selling to globally
comparable level. However to be a strong contingent on creating an enabling environment for the
industry the government has an important role to play in reducing the challenges faced by the
industry.

The success of Amway, which relies on individuals to accomplish sales and recruiting, a number
of fraudulent businesses have also tried to emulate the form, but with malicious intentions and
outcomes. This has impacted Amway, which is a significant challenge to its growth.

Amway has the potential to create a significant social and economic impact in India especially in
the area of women‘s empowerment, skill development, technology percolation and growth of the
SME sector, besides promoting self-employment and providing a viable means of alternative
income. There is a need to revisit existing laws and bring about regulatory clarity to build an
environment of trust in order to reap the multiple benefits that the Amway has to offer.

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 RECOMMENDATIONS

 Trail packs should be launched.

 The products should be economical.

 To launch combo packs.

 Improving the logistics system.

 Launching New Non-coreline products twice in a year.

 Starting Preferred Customer Service for distributors.

 Increasing the number of Distributor Offices.

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 BIBLIOGRAPHY

Books:

 Robinson, J. W. (1997). Empire Of Freedom: The Amway Story And What It Means To You.
PRIMA PUBLISHING.

 Business Starter Guide – Amway India.

 All Products Catalogue – Amway India.

 Amway India Entrepreneurship Report – Amway India.

 Success Profile – BWW India.

Websites:

 www.AmwayWiki.com

 www.KPMGIndia.com

 www.Amway.in

 www.Amway.com

 http://www.telegraphindia.com/1130325/jsp/business/story_16711573.jsp#.Vf9gMdyqpBe

 http://www.thehindubusinessline.com/companies/amway-india-to-launch-csr-project-for-
malnourished-children/article5462518.ece

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 http://amwayindia12.blogspot.in/2012/03/history-of-amway.html
 http://articles.economictimes.indiatimes.com/keyword/amway

 http://www.moneycontrol.com/news/business/amway-eyes-rs-6000-cr-revenueindia-ops10-
years_2840341.html?utm_source=ref_article

 http://www.business-standard.com/article/companies/amway-s-fortunes-dip-in-india-
114120900166_1.html

 http://www.amityedumedia.com/viewPoint-issue-16.htm

 http://www.etstrategicmarketing.com/SmJanFeb3/art8.html

Magazines:

 Amagram – Amway India.

 Acheivers – Amway India.

 Lamplighter – BWW India.

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 ANNEXURE I : CASE STUDY

1. Case Study Of Sarvotham Care

Sarvotham Care, a small scale enterprise started its operations in1996 in Hyderabad, wherein
they were involved in pharmaceutical formulations. After Amway got approval from India‘s
Foreign Investment Promotion Board in 1996 to invest in Indian operations, Sarvotham Care got
in touch with Amway in1997 for manufacturing Amway‘s home care range. Amway helped
Sarvotham Care in bringing its production facilities and skills to international standards through
the transfer of manufacturing know-how and processes for the indigenous production of
Amway‘s product range. Soon, Sarvotham Care expanded into personal care products as well. In
2005, Sarvotham Care invested INR 15 crore to set-up its manufacturing facility in Baddi, which
was further expanded with a total investment of INR 100 crore. Today, Sarvotham Care produces
85 percent of Amway‘s product for the domestic market. The company has also grown multi-
fold from a revenue of 15 crore and 20-25employees in 1997 to a revenue of over INR 350 crore
employing 500-600 people today. In addition, the company has also grown to become a supplier
for other major companies including GSK, Gillette and P&G.
Just like Amway, many other direct selling companies have helped in steering the progress of the
small and medium-scale enterprises in India. Along with transfer of international standard
technology, SMEs were benefitted by expert guidance.

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2. Case Study Of Mr. Surendra Sharma:
Mr. Surendra Sharma is a Businessman; He owns a soap and chemical industry at Wardha. He is
a 57yrs old person and an Independent Amway Business owner from the last 7yrs. He was
introduced to Amway business by Mr. Mohinder Singh Bhraich seven years ago. At that time
Mr. Sharma was struggling with his business. He had no time for his family. He was searching
for a business which can Provide him with time for family, financial security, freedom etc. which
he was not able to get from his Traditional business. His search came to an end with
Amway business; he took it as an opportunity and started working over it. And now he has
earned recognition for him as a Founder Platinum in Amway business & today he is earning a
monthly income of Rs.50000+. He is interested in selling mainly health related products.
Whenever he meets any person whom he wants to show the plan, he starts with the health
care products and if the person is interested, he starts encouraging them to join the business.

3. Case Study Of Mrs. Vijaya Borkar:

Mrs. Borkar is a house wife. She is an Amway distributer from the last 5yrs.She has two
downlines under her. But at present she is not an active Amway business owner, she purchases
Amway products for personal use and she tries to sell the products to relatives and friends to earn
some extra income from home.

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