Direct seller firm witnesses increase in online sales from 33.6 percent in February 2020 to over 70 percent in September 2020. Before lockdown in March, the company had executed 1 lakh deliveries, accounting for 40 percent of total sales count.
Amway India, known for direct selling, moved online due to the COVID-induced lockdown as people remained cooped up in their houses and preferred shopping online. This indeed proved beneficial for Amway India.
The company witnessed an increase in online sales from 33.6 percent in February 2020 to over 70 percent in September 2020. Currently, the company is executing over 2.8 lakh home deliveries -- an increase of over 200 percent from March 2020 -- which is roughly 70-80 percent of Amway’s total sales. Amway is the No.1 direct seller in India.
Before lockdown in March, the company executed 1 lakh deliveries, accounting for 40 percent of their total sales count then.
Amway expects the trend to continue and foresees online orders to reach over 5-6 lakh deliveries per month by the end of this financial year.
“In the current scenario, the emergence of social commerce holds relevance as people are shifting online, showcasing a natural acceptance for digital,” Anshu Budhraja, Chief Executive Officer, Amway India, told Moneycontrol in an interaction.
“As people look for personal recommendations online, many of our direct sellers have built social communities, delivering personalised product experiences by integrating their offline connection to the online network,” he added.
Amway India is a wholly owned subsidiary of Amway, which has its headquarters located in Ada, Michigan, USA. The Indian arm sells more than 140 daily use products across categories like nutrition, beauty, personal care, home care, and consumer durables.
Nutrilite is its highest-selling vitamin and dietary supplements brand. Amway has 550,000 direct sellers across the country, of which 60 percent are women, at present.
To enhance the shopping experience and ensure smooth last-mile delivery of orders, Amway India is working towards strengthening the supply chain and logistics.
The company will be investing Rs 30 crore to enhance the home delivery experience by adding warehouse space, manpower, new logistics partners, automation in warehouses, and other back-end processes.
Amway India currently services 8,000 pin codes and aims to scale up to reach 15,000 by adding more national players and leveraging their network. It is also looking to add 40 percent additional third-party manpower across India to support and fulfill the online demand.
Budhraja said there is an increased awareness of holistic and preventive healthcare among consumers, prompting them to turn towards wellness and immunity-boosting products.
“There is a huge opportunity for health segment. with nutrition taking the center stage. The growing demand for our products in the Nutrilite portfolio with a preference for herbal SKUs (Stock Keeping Units) is reflecting this trend,”
He did not say as to how much sales the company has done in the nutrition category during COVID, but said he expects close to 10 percent growth in this category’s contribution in the next couple of years. Currently, the nutrition portfolio contributes 56 percent to the company’s sales.
Going ahead, the company is bullish on the nutrition and wellness category, which include immunity-supporting products.
As per the BCG COVID-19 Consumer Sentiment Survey 2020, over 28 percent more consumers have opted for nutritional supplements vis-à-vis pre-COVID-19 era, which shows a growing inclination for nutritional solutions to support overall health.
Apart from Nutrilite and other immunity-boosting products, the company also saw sales in other categories during the lockdown.
As consumers prioritised home and personal hygiene, the company witnessed a steady demand for products in this category. Amway Pursue Disinfectant Cleaner and Amway Home LOC multi-purpose cleaner emerged as the best-selling SKUs in the category.
Additionally, to meet the immediate consumer need and demand, in the last few months, the company introduced the Persona Hand Sanitizer Gel. The company is also planning more product launches in the near future.
With the increased focus on self-care through personalised skincare regimes, the demand for beauty products gradually showed positive traction, Budhraja said.
“In the initial lockdown phase, consumer purchases were skewed more towards essential items, but now we are witnessing some demand for the beauty category as people focus on premium skincare solutions,” he added.He expects demand to gain further momentum in the coming months as the company plans to introduce new product innovations in the next few months.