The Hindu Business Line : Direct selling firms to tap small towns for volumes

Mass-market penetration is now catching up within the Rs 1,800-crore direct selling industry as well, and direct selling majors such as Amway, Tupperware and Avon now seem to be following the path charted by FMCG giants such as Hindustan Lever, Marico, Britannia, Nestle, Dabur, Godrej and Tata Tea. And price sensitivity, reaching out to the masses and value-for-money products seem to be the magic words.

Take Tupperware India Pvt Ltd, the wholly owned subsidiary of the US-based Tupperware Corporation. The plastic storage container company has now undertaken a `Caravan' exercise (a display campaign on wheels, in other words), to tap small towns. According to Mr Kanwar Bhutani, Managing Director, Tupperware India, the Tupperware trucks will be going to cities such as Mizoram, Meerut and even Bhatinda. "There are significant potential consumers in these places," Mr Kanwar said. Rural marketing specialist company RC&M is working on Tupperware's Caravan project. Tupperware has invested over $15 million in India, and it currently has promotional tie-ups with Philips and ITC's Aashirwad brand.

The Rs 625-crore Amway India Enterprises, the country's largest direct selling company, regularly conducts training exercises in SEC (socio-economic classification) B and C towns and cities. Said Mr William Pinckney, Managing Director & CEO, Amway, "Where we go is decided depending on the presence of our distributor force." Mr Pinckney has earlier indicated Amway's willingness to tap rural markets in the future.

Amway currently covers over 1,059 locations through its home delivery network set up through independent logistic partners, and has been focusing on small sizes such as 4 ml sachets and 65 ml bottles for its personal care, home care and cosmetics products.

For Avon Beauty Products, going mass is all about driving growth. Said Mr Harmeet S. Pental, Managing Director, Avon Beauty Products, "Volumes lie in mass markets; and it is volumes along with distribution that drive topline growth since both are dependent on each other."

Avon's product mix includes low-priced personal care products to suit purse strings of SEC B and C households, and the company isn't ruling out penetrating further down the socio economic strata. "Pricing is critical, but there's a huge opportunity to expand the consumer base in small towns," Mr Pental said.

Meanwhile, according to a National Council of Applied Economic Research (NCAER) report, consumers from SEC B and C markets currently account for the bulk of the domestic consumer market.

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