Amway's Indian Network Marketing Experience

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Case Details:

Case Code : MKTG003
Case Length : 9 Pages
Period : 1994 - 2000
Pub Date : 2001
Teaching Note : Available
Organization : Amway Indian, Eureka Forbes
Industry : Business Services & Equipment
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Picking Up The Pieces

Amway soon woke up to the reality that it had to take steps to put its MLM machinery back to the track. For this, it had to first identify where it had gone wrong. Amway realized that like most direct marketing networks, it had hoped to leverage the global promise of the lucrative business opportunity for its distributors...

'Network'ing Its Way Into The Future

By 2004, Amway planned to become a Rs 1000 crore company with a physical presence in 198 centers across India.

The company also revealed that by 2002, it would be selling all the 450 Amway products that were available abroad, in India.

As part of its plans to tap unexplored markets, Amway announced an ambitious expansion of its distribution infrastructure in Andhra Pradesh, which included setting up a warehouse.

Once the marketing business in urban areas was strengthened, Amway planned to turn tis attention to untapped rural areas as well...

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The Indian MLM Journey

MLM was the fastest growing sector of the direct selling industry worldwide. In 1988, the total revenue generated by MLM was $ 12 billion, which doubled to $ 24 billion by 1998. The direct-marketing industry in India was about Rs 6 billion in 1999. This was a growth of 62% over the previous year.

In the pre-liberalization era, network marketing in India was usually in the form of various chit fund companies like Sahara India. These had a system of agents, who simultaneously mobilized deposits and appointed sub-agents for further deposit mobilization.

Companies such as Eureka Forbes and Cease-Fire pioneered the direct selling system in the country with a sales force that was trained to make direct house-to-house sales.

Oriflame International was the first international major to begin network marketing operations in India in 1995. This was followed by the entry of Avon India in late 1996...


Exhibit I: Amway Products Available In India (April 2001)

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