CHENNAI: The reason why the direct selling industry in India is campaigning for a separate piece of legislation for the industry is that the country's consumer law is not detailed enough to protect the interests of consumers, distributors ("business owners" who, in their thousands, constitute its sales force) and the direct selling company, according to William S. Pinckney, Managing Director and CEO of Amway India, a wholly owned subsidiary of Amway Corporation of the U.S.

A basic feature of the legislation on direct selling should be to make it mandatory for sellers to offer money-back guarantee to buyers in the case of lack of satisfaction with the product, Mr. Pinckney said, and added that India was among the few countries which did not have legislation covering direct selling.

The CEO of Amway India, which has recorded a turnover in excess of Rs. 630 crore last year, was here on Tuesday in connection with the launch of three "Satinique" range of hair care products from Amway's stable of "nature-scientific" products. In a chat with The Hindu, he said the Indian Direct Selling Association (IDSA) insisted on its members offering money-back valid for three months. Applicants for membership of the association were monitored for their performance in respect of the industry's ethics before being granted admission, he said.

He said Amway would be happy to introduce its "home tech" products in India, particularly water purifiers, but this would be a daunting challenge since the Indian market was "most advanced" and there were purifiers to satisfy every segment of the consumer population.

Consumer habits

The company would have to develop carbon filters suited to consumer habits in India and capabilities for home delivery. Amway had now five contract manufacturers in the country for its products and would think of putting up its own plant when turnover reached levels of Rs. 1,300-1,500 crore, Mr. Pinckney said.

He said the company, eager not to miss out on the sachet revolution in India, came out with sachet versions of its products. A company official added that sachets served as a testing ground for the consumer and thus boosted the sale of the bottle versions and did not cannibalise the latter.

Does direct selling comply with the multi-point value added tax (VAT) regime that has come into force in most States? According to Mansur Ali, Vice-President, Southern Region, Amway sent advices to its "business owners", when they crossed the threshold turnover for VAT, to register themselves with the commercial tax authorities of the State concerned.

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