If HUL, ITC are FMCG cos, so are we, insists Amway India head

Amway India thinks it has been, to borrow a phrase of the Bard, sinned against for no sinning at all.

In an interview with the Business Standard, Amway India chief William S Pinckney, who was recently arrested for violating the Prize Chits and Money Circulation Schemes (Banning) Act, has said it is an FMCG company, not a chit fund.

Interestingly, he has also said the company, when it entered India, did not have a clue that it would be governed by this Act, which essentially deals with chit funds.

The interview, as the saying goes, reveals the other side of the coin, which in this case turns out to be a blind defence of the controversial company, though.

Explaining the 100-year-old "straight forward business model", Pinckney has said the company neither does collect money nor does it force people to join as distributors.

"Simply, people become Amway distributors. It costs them nothing. It's free. There is no obligation to become an Amway distributor, to buy anything or sell anything. That's totally up to you," he has said.

And he doesn't understand the logic behind calling an FMCG company a chit fund. Just like HUL or ITC, Amway too is an FMCG firm.

According to Pinckney, the company even stopped charging a membership fee as it violated the law in India. But, anyway, he doesn't see any problem with the practice of charging it. Not only that, he even thinks that Amway was actually encouraging entrepreneurship (well, sort of) in India.

 If HUL, ITC are FMCG cos, so are we, insists Amway India head


"After all, where in the world can you start a business with Rs 995, have three months to try it out, get free education for the business and get out anytime within 90 days if you wish, and we give you back the Rs 995?" he asks.

He also rebuts the allegation that Amway is a pyramid scheme, because unlike in such schemes, the company doesn't have a hierarchy. Distributors' incentives depend on the work she does. It is not shared.

And what about the prices? Pinckney thinks they are just right, competitive.

The explanations given by Pinckney, in the most simple terms, remind one of what Humpty Dumpty said about faces in Alice in Wonderland.

"Your face is the same as everybody has-the two eyes,- " (marking their places in the air with his thumb) "nose in the middle, mouth under. It's always the same."

HUL sells FMCG products. Amway also does that, according to Pinckney, using different marketing strategy. But only because of that we just can't say, "It's always the same." Do we get confused only because all human beings have the features on their faces?

However, Pinckney has a point when it comes to Indian laws. We don't yet have a clear cut guideline governing direct selling companies. It is high time we put in place one.

Read the entire interview here.

Updated Date: Dec 20, 2014 22:13:53 IST