Amway India chief William S. Pinckney (centre), flanked by multi-level distributors

If Veena Jain, 51, had her way, traditional retail marketing would be long gone. For, it reduces the customer to a ''kasht-maar'' (problem-kill), as she explains to a small gathering-to peals of laughter. Jain's not just another wife of an IIT-Delhi professor. She's on a recruitment mission. And sure enough, she's spot-on. She has softened her audience to the 'Amway opportunity' pitch. Once recruited, they, like her, will become part of a self-perpetuating and self-motivating network of distributors, 300,000-strong already, for Amway India-the domestic arm of a $5-billion firm based in Michigan, US.

The reason why FMCG analysts should bother, though, is that Amway has grown like nobody's business since its 1998 kick-off, more than doubling turnover every year to notch up Rs 553 crore in 2000-01 (September-August). On current estimates, Amway India should close 2001-02 at Rs 700 crore.

In absolute terms, that's not even as large as the ad budget of Hindustan Lever Ltd (HLL). But William S. Pinckney, Managing Director & CEO, Amway India, gets to sleep a lot easier than Lever chief M.S. Banga. Not that one is eating the other's lunch; their markets do not overlap much, and India offers enormous potential. Yet, business is about growth, and the contrast in pace is dizzying. While HLL scours high and low just to turn a positive topline, Amway scorches ever upward. In another five years, Amway could even be the country's second largest FMCG player (after HLL), reckons Amway's former country chief Sudershan Banerjee.

And to think that the American direct-seller started with an investment as unnoticeable as Rs 26 crore in India. That too, selling just six products, with all its brainware concentrated solely on its Liquid Organic Cleanser (loc). At about Rs 350 for a big 1-litre jar, it seemed way too overpriced in a country where purse-strings are kept tight, small pack-sizes are the norm, and even the famed Procter & Gamble went crazy asking for over Rs 60 per kg for a compact detergent. Was Amway another American multinational about to bumble its way around in Nirmaland?

The Fifth 'P'

If 'product' and 'price' put furrows of skepticism in the brows of FMCG market watchers, there was no 'promotion' budget to speak of. But it was the fourth so-called 'P' of marketing that most worried about: placement. On this, Amway attracted a major rash of cynics. At first, 'direct selling' sounded like door-to-door sales, too infra dig for the target group. Besides, the multi-level network structure gave the impression of being the flaky brainchild of some scamster, for it reminded people of those 'pyramid investment' chain-letters. The other doubts centred round India's lack of US-style warehousing infrastructure.

In short, observers wondered if Amway stood even half a chance.

Not anymore. Today, Amway offers 33 products, ranging from home and personal care to nutrition and cosmetics, with the emphasis shifting towards the latter. Pick-up points have grown from five to 44, with delivery nodes at over 350 locations across India.

What the skeptics overlooked was the power of another 'P' of marketing: passion. Passion for a single integral idea. ''The strength of the (Amway) model,'' says Pinckney, ''is ultimately free enterprise.''

Amway's strategic objective is to sell a dream first, products later. The dream of freedom from a regular job that trades time for a fixed sum of money-or alternatively, freedom from the risks of self-employment. It's a twin promise, offering the best of both worlds: gain the pros but not the cons of being one's own boss. Symmetrical, yet paradoxically mono-focused-you could call it Amway's '30-second elevation pitch'.

On the ground, it is proving to be a marvel. While HLL has around Rs 1,000 crore to spend through a handful of ad agencies on a supposedly 'focused portfolio' of some 30 brands, Amway uses little other than the self-conviction of 300,000 people to sell just one brand-as 'Hamara Apna Business' (our own enterprise). And it works. Once a prospect buys the dream, consuming and selling products is just a minor matter of readjusting one's value-for-money perceptions. This is something the training sessions and product literature take care of (the company spends 8 per cent of its turnover on distributor training and awareness).

The intimacy of 'belonging' to Amway helps. ''It is all about relationships and trust,'' says Pinckney. The company offers a full money-back guarantee to any dissatisfied consumer, but the return-rate is claimed to be a mere 2 per cent. The home-care products are concentrates-so a 1-litre jar is deceptively large. ''Amway's products last longer,'' says Pinckney. Moreover, they meet higher-order needs too. Most formulations are biodegradable; all it takes is some sensitivity towards the future of the planet to justify the price premia. It's a globally proven model, says Amway.

Reinventing An Idea

Proven or not, Amway's success is not a case of transplanting an American idea in India. No sooner had Amway launched, than it realised that India was a widely different and diverse market from the rest of the world. What followed was a thorough process of 'glocalisation' that involved intense market studies.

Take manufacturing, the first big challenge. Now, according to a Foreign Investment Promotion Bureau (FIPB) guideline, Amway could either import products (and pay tariffs) or use contract manufacturers in the small-scale sector. So it struck deals with three third party administrators (TPAs) that qualify as 'small scale', guaranteeing them a minimum purchase volume in exchange for strict adherence to its quality standards. By year-end, Amway expects to have two more TPAs, to prop its nutrition and cosmetics market thrust.

Recently, Pinckney identified those two as key growth areas for Amway in India. ''We would focus on personal care and nutrition here,'' he elaborates, ''as products that are personal to somebody make the customer not just buy, but use them too.'' And people need to make judgments of their own. ''If you are not convinced about the product yourself, how will you convince others?'' he asks.

Feedback from the field has helped Pinckney fine-tune the details of the brand's sales strategy. He cites the example of Amway's loc-which was proving hard to sell ''as here it is purchased by a consumer who would ideally not use it, but rather pass on the usage to a servant, unlike in western markets''. If Indians aren't too enthused by the subtle softening attributes of a product in the homecare category, it's better instead to stimulate interest in an issue of immediate personal relevance. An under-eye cream, for example, can arrest female attention with 'beauty that defies the years', as expressed in an Amway ad (baseline: 'Better ideas. Better Life.') This is being done especially for India, ''though strictly for information and awareness purposes'', as Pinckney adds, given that Amway does not deploy media advertising elsewhere in the world.

Pricing has seen an ever bigger break from the global format. As Banerjee, puts it: ''The Amway model worldwide pivots around fixed quantity, variable price. But in India, we had to go in for variable quantity, fixed price.'' Swayed by the logic of price points, Amway has launched smaller packs. To entice trials, Amway has even launched sachets.

Unlikely Favourite

It's an open-door learning process. In Banerjee's words: ''Amway is the university of entrepreneurial education.'' Amway's motivation sessions, often conducted in halls across India, are a major morale booster. In 2001 alone, Amway held a jaw-dropping 21,000 sessions, focused on training.

At the end, success spells success too. Such has been the buzz generated by the firm's growth that it has become an unlikely B-school favourite. ''From IIM-Lucknow alone, 60 final year students applied to Amway from a batch of 160,'' claims Rakesh Sharma, Director, Human Resources, Amway India. Two were taken, though.

Cumulative, Amway claims to have invested Rs 151 crore in India so far. Operating profits are reportedly healthy, and further investments are likely to come from internal cash accruals. Logging a proper return-on-investment, though, could take till 2004.

Yet, Amway mustn't get overawed by its own success. It's on a roll, but even a minor spanner could dampen spirits. Moreover, HLL and others are sure to devise a flank-EM-out strategy (HLL's Aviance attempt, an effort to go direct with cosmetics, has remained just that, an attempt). Also, Amway could face premature saturation in India. There just aren't that many people of the desired sensibility, feel some, and the entire model's success depends on relentless expansion. Is the Amway phenomenon destined to plateau after some years? Pinckney won't hear of it. ''Not in our lifetime,'' he quips.