In some good news for Amway India and other direct selling companies, it’s been reported that –
“An inter-ministerial committee is expected to come out with regulatory guidelines for direct selling companies by the end of this month”
Amway India and other companies in the market have been suffering from a lack of clear guidelines and the actions of some misguided anti-mlm zealots, particularly in Andhra Pradesh. Amway has been working hard to get clear laws in place. Hopefully things improve!
For some years now I’ve been trying to write a post about the trials and tribulations of Amway India, and I never quite manage to get one done. It’s a struggle just to sort through the bizarre allegations, unreadable and confusing legalize, and the truly bizarre misinformation of Amway’s critics.
Anyway, I’m trying again. As many readers might know, back in 2006 police in the Indian state of Andhra Pradesh raided and closed several Amway offices citing the “The Prize Chits & Money Circulation Schemes” law. Amway appealed to the courts, successfully, to remain open but their attempt to get the courts to once and for all declare the Amway business model legal and tell the police to stop harassing them failed. The court refused, instead stating that if the police allegations were correct, then the law would apply, so they ordered the police to complete their investigations within six months so their original allegations could be heard. Five years later that still hasn’t happened, and Amway critics in the country have spent the intervening time claiming the courts decision means Amway is illegal in India and lobbying for action. Of course, they conveniently ignore the part about the allegations needing to be correct! Unfortunately, similar events, and allegations, have now been made in the state of Kerala, and today it’s been reported that “The Enforcement Directorate” is investigating money laundering charges against Amway.
So what exactly are these allegations? It’s frankly a nightmare trying to sort through all the very oddly worded legal documents, but as best I can find from the original court hearing, here are some of them –
- Amway’s membership fees are “quick and easy money” and no services are provided to distributors in return.
Apparently the products and literature that come with the kit, the www.amway.in website, telephone support staff, dozens of product centers throughout India, Media advertising, 14,000 support stuff throughout the world etc, etc etc don’t exist)
- prescription of minimum level of 50 PV to qualify for getting commission is sufficient inducement for the members to relentlessly strive for maintaining the PV level at or above the said minimum levels.
This requirement, which much of the world (including the FTC) cites as a reason that Amway is not a pyramid scheme, is to the Andhra Pradesh police a reason why it’s illegal! Having retail customer volume provides evidence that an MLM company has real products with real world demand. In the bizarro world Amway India lives in, it “forces” distributors to buy Amway products, giving Amway “automatic” income. The fact the vast majority of Amway distributors don’t actually do this thing it’s claimed they’re “forced” to “relentlessly strive for” is apparently irrelevant. Continue reading The bizarre world of Amway in India
Despite the distractions of being temporarily shutdown in the state of Andhra Pradesh because of a marital dispute, Amway India has reported spectactular sales growth for 2006. Amway India sales for 2006 are reported at Rs 738 crore (US$168 million) compared to revenues of Rs 633 crore in 2005 – growth of 16.6%. This is a spectacular turnaround on the relatively flat growth of the previous few years.
Double digit growth is expected to continue for the forseeable future, with The Economic Times quoting Amway India Corporate Communications Manager Rajat Banerjee as stating –
“We will open 3-4 more distribution centres in Tier-II and Tier-III cities this year, including Faizabad, Panipat, Kota, Bikaner, Dharamsala, Srinagar, Mysore and Vellore”
Overall Alticor and Quixtar sales data for 2006 has not yet been released after Alticor made a change in their financial reporting methods.
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