Why is Amway successful in the west?
Why are people disillusioned about it in India?
The answer lies in the market dynamics.
The behavior of the Indian consumer is quite different from that of his / her US counterpart.
Amway is successful in the west as their business model eliminates middlemen and advertising and pushes that money into making the representatives (or the links in the chain) rich. To bring in volumes, the products are sold in highly concentrated form so when you buy a bottle of dishwash, you are actually buying the equivalent of (prob.) a couple of crates of ’’normal’’ dishwash. So it works out to be cheaper. Therefore it makes sense to buy Amway.
Now, let us come to the Indian scenario. India is a country where majority of the people (unlike the US) prefer buying in small quantities even though the per unit cost may be high. Ever wondered why shampoos available in 5 ml sachets are extremely popular, while you find bottles above 500 ml only in really big supermarkets? The Indian consumer is not receptive to the logic ’’You spend 10 times now for a product that will last 10 times more’’. He thinks more short term (like till his next bath ;-) ). So people in India don’t join Amway for its product quality. The social consciousness of the Indian psyche has also not developed to the level where he / she is highly environmental-conscious either. (Give the option (already being done in some supermarkets) of taking a free polythene bag or pay a rupee more for a paper carry bag, 90% of the people prefer a polythene bag. “Environment? Duh!’’)
So there is only one logical reason for people to join Amway. -Lure of easy money.
This is where things go wrong.
People who hear that you can just make some people join, let them work for you and then sit back and earn big money and join eagerly are by definition people who are looking for earning money without the effort.
So when it dawns on them that you have to WORK for earning like that, they feel disillusioned. The word of mouth publicity given for this disillusionment is pretty high. (’’A satisfied customer tells a friend, but a dissatisfied one tells ten’’ - goes the age-old marketing adage)
So a person who joins Amway at this point finds himself surrounded by people who have heard very bad opinions about it or people who have already joined it and are (currently) disillusioned.
Either way, he ends up frustrated....