Another Tupperware Party

The network marketer claims to be the first of its kind to break-even in India. Is it time to celebrate? A look at what makes the company's strategy tick.

By Vinod Mahanta

She probably hasn't knocked on your doors yet, but the Indian Tupperware woman has quietly been building the American direct marketer's fortunes in the country. Since its launch in 1996, the $1.4-billion Tupperware--which makes high-quality plastic kitchen containers--has roped in an all-women team of 20,000 and grown revenue from Rs 13 crore in the first year to Rs 40 crore last fiscal. Never mind that the Indian operation is yet to make profits. Says Pradeep Mathur, 42, Managing Director, Tupperware India: "So far, we had been spending a lot of money on training our sales team."

Yet, India's lure for Tupperware is the galloping market--the fastest in its global portfolio. Over the last four years, revenues have been growing at nearly 50 per cent annually. While the rate of growth may slow in the future, the absolute numbers should keep ticking given that there is a potential customer base of 250 million to tap.

For starters, the company is focusing on households that earn between Rs 10,000 and Rs 15,000 a month. The rationale: since using Tupperware products entails a change in kitchen habits, the hygiene-conscious housewife in the affluent households is more likely to be amenable. Already, the company has learnt a key lesson in the market: That premium prices will not fetch volumes. Ergo, prices have been realigned to match those of local competitors. For instance, when Tupperware was launched, its cheapest plastic tumbler cost Rs 50. Now its cheapest product is available for Rs 8 and the most expensive for Rs 700. Points out Arvind Singhal, 41, Managing Director, KSA Technopak: "Most of the international companies overestimate the purchasing power of Indians and later have to adapt to local prices."

Tupperware's strategy now is to sell the "product pays for itself" concept. Explains Mathur: "Our products curtail a lot of wastage because people don't have to throw away food." The other strategy of relying on an exclusive women sales team is helping gain relatively easy access to Indian homes. Notes Mathur: "Housewives are more comfortable with and receptive to saleswomen." Small wonder, then, that Tupperware hasn't spent a penny so far on advertising.

The company has already invested about $15 million in India operations. Recently, it also pumped in $ 2 million in four injection moulding plant in Hyderabad, which meets 70 per cent of the local demand. The rest comes from private suppliers in Mumbai. To reduce delivery time, warehouses have been set up in Delhi, Baroda, and Bangalore. Future investment in the Indian arm will, however, be conditional. Says Robert Williams, 52, President (Asia-Pacific), Tupperware: "Investments in India will be directly proportional to the increase in sales."

The Indian Direct Selling Association puts the direct marketing potential in India at $190 million, and growing at more than 30 per cent a year. But it will be along while before Tupperware's India cup brims over.

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