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Saturday, Oct 19, 2002

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IDSA seeks legislation for direct selling

Vinson Kurian


THE Indian Direct Selling Association (IDSA) has proposed to the Centre legislation for regulating the industry to weed out `fraudulent elements' from the direct sellers' community.

Mr S. Viswanathan, Senior Executive, corporate communications (south), Amway India Enterprises, founder member of IDSA, told Business Line, "Direct selling is a fast growing industry. At present, there is no legislation for regulating the industry. Many fraudulent companies, operating pyramid/money circulation schemes, are trying to take advantage of the situation. In the process, they are cheating the public and earning a bad name for the industry.''

Keeping this in mind, IDSA has approached the Centre with some proposals. By seeking appropriate legislation, IDSA wants the interests of consumers and genuine direct selling companies protected. "How it should be done is best left to the Government to decide. IDSA has given some inputs for the Centre's consideration," Mr Viswanathan said.

IDSA has already formulated a code of ethics for all member companies and Mr Justice Rege (a retired Mumbai High Court judge) is the Code Administrator.

Asked if Amway plans its own manufacturing facility in India, Mr Viswanathan said the company has got products in four categories currently - personal care, home care, cosmetic, nutrition and wellness. Personal care and home care products are currently manufactured in the country through third-party contract manufacturers. "We are soon going to start local manufacturing of protein powder in the nutrition and wellness categories, again through third party contract manufacturers. Eventually, Amway will manufacture all products sold in India within the country,'' he said.

Internationally, however, Amway operates in another category called home tech. It includes products like water purifying system and food storage systems. However, cosmetics and home tech require a very sophisticated and high-tech manufacturing facility. "When we decide to introduce the home tech category in India, we would definitely consider setting up our own manufacturing facility. We have not set up any time-frame at this stage.''

On Amway India's foray into e-commerce, he said it was going to be implemented in three phases. The first phase saw the development of the Amway India Web site. In the second phase, the distributors (also known as independent business owners, IBOs) would be enabled to check the points, commissions and bonuses they have earned. They can also download various information vital to their business - like Amagrams, Newsgrams (a bi-monthly newsletter for the distributors), on product launches, on new promos which are under way and other such information. Distributors can also send in suggestions and feedback to customer service executives on-line.

The third phase, work on which is currently under way, is actually the phase in which distributors can conduct their business online.

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