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Modicare sees growth resting on two planks: its distributors, who it depends on for communication, and its products, which it claims provide high value at low cost.
RECESSION works well with the direct marketing industry. Samir Modi, Managing Director, Modicare, attributes the success of his company to a large extent to the current economic slowdown. "More and more people are looking at direct marketing as a lucrative option. Modicare itself has been able to contribute around Rs 80 crore to the economy this year and the direct marketing industry as a whole has grown by at least 20-25 per cent," remarks Modi. With a turnover of Rs 200 crore this year and a network of over 7,50,000 consultants across 2,000 cities, the company is confident of achieving the Rs 1,000-crore target it has set for itself by 2003.
Modi's vision for this company is that it would bequeath financial independence to Indian consumers and give them access to international products at Indian prices.
"Modicare's aim is to create the best possible income opportunities by offering a magical product range at affordable prices. Our products are much cheaper than all the MNCs of the world, be it Lever's, Godrej or Maybelline, and I can guarantee their uniqueness and superior performance," claims Modi. "The Modicare toothpaste brand, Fresh Moments, for instance, is the only non-abrasive toothpaste available in India.
Similarly, our cleaning solution, Spik 'n' Span, is the only one of its kind which cleans the white residue that settles on taps," he adds. Talking about the price factor, Modi claims that cost per wash of the Modicare detergent, Wash-mate, will be Rs 2.80 in comparison to the cost per wash of Surf Excel, which is Rs 6.
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Modicare doesn't believe in advertising or consumer promotions. "All our communication is word-of-mouth, through our distributors. We promote our brands by providing extensive training to our distributors in order to enable them to market our products efficiently."
The company does everything possible to get the best out of its distributors. "Our first consumer is our distributor. We have a lot of incentive programmes for them like the Gold offer, in which a distributor who has achieved record sales gets an award. Apart from this, we do have promos such as buy something and get something free, which is passed on to the consumers."
The company also organises a star night every year for its distributors to celebrate the achievements of its star performers. "Sitaron ki Raat or star night is for our distributors, their families and their friends. We usually have celebrities to entertain them along with the excellence awards ceremony. The whole idea behind this event is to make our distributors feel special," remarks Modi.
Improving its products is an important priority. "We believe in `non-staticness' of a product. The product has to continuously improve," he says. "In case of some products such as Silver Dip, we are already in the third generation of research. We are constantly trying to increase the anti-tarnish effect of the product," he adds.
One of Modicare's recent distributor promotion ventures is the Modicare Lifestyle Store in Delhi. "The lifestyle store looks like an upmarket house with a lavishly done-up living room, bedroom, kitchen and a bathroom. While all the personal care products have been displayed in the bathroom, the kitchen and homecare products have been displayed in the kitchen. The store also has facilities for live demonstration of products," remarks Modi. This store, again, only allows entry to the Modicare distributors and their customers, and all buying can only be done through the distributors. The company plans to set up 10 such Lifestyle Stores in the next one year.
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An important aspect of Modicare's marketing strategy, says Modi, is the packaging of its products.
"Our benchmark is to provide international products at Indian prices. Therefore, we not only ensure that the product quality matches international standards, but also that the product packaging gives it a truly international look. At the same time we also ensure that the packaging is convenient and easy to use."
Modicare, he says, doesn't believe in the concept of ready-mixed cleaning products.
"For products such as car wash and even shampoos, we provide the concentrate along with an empty bottle and a pump. A person can dilute the concentrate in the bottle and fit the pump."
The company has also entered the sachet segment with the launch of 12 gm and 15 gm packs.
Modi claims his sachets are much more value for money than other FMCG sachets. "A 12 gm Modicare detergent sachet, priced at Rs 5, will take care of at least 15 washes, which no other detergent sachet of the same weight would do," he claims.
A complete satisfaction guarantee is yet another advantage Modicare products claim to carry. "We are the only company which offers a 100 per cent satisfaction guarantee. If a consumer doesn't like even the colour or fragrance of a particular product, he is free to return it to the company and get the money refunded," says Modi.
"We are extremely particular about preserving the goodwill of our consumers," he adds. Modi says that a 100 per cent satisfaction guarantee is offered only by cosmetic companies only in case of a manufacturing defect.
Modicare is going to launch a host of new products including a food supplement range called Fruit of the Earth, men's shaving equipment called Smooth, men's toiletries called Velocity, educational toys and plastic containers.
Talking about why the direct marketing initiatives of FMCG giants such as Hindustan Lever have not really taken off, Modi says, "Retail and direct selling involve totally different mindsets. One can't do retail and direct selling simultaneously."
As Modi relentlessly tries to promote Modicare by organising several training programmes for its consultants and trying to launch more and more specialised products under the Modicare flagship, he also hopes to tap overseas markets for his products.
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Modis Plan Foray Into Beverages Via Herbal Route
new delhi: homegrown multilevel marketing company modicare is entering the food and beverages category with a focus on the herbal. its products would be under the brand name fruit of earth. the first product -tea -would be launched this week.
we''re hoping to make inroads into a market dominated by the levers and the tatas through our network marketing route,'''' said managing director samir modi. developed by group company godfrey philips'' tea city, fruit of the earth tea is placed in the premium segment (price rs 63 for a pack of 250 gm). tea would be followed by coffee a few months later. a range of ayurvedic products like honey, chyavanprash would be launched along with hair oil and skincare products under the fruit of earth brand name.
in the next two years there would be 200 items under the brand, said modi. meanwhile, the company claims to have achieved about 50 per cent growth over last year, having raised the number of consultants to 4.50 lakh this year from 2.63 lakh. ``this is about 1 per cent of the total number of people involved globally in direct selling business,'''' said modi. there are by now about 55 centres servicing over 2,000 cities.
modi claims his company is the most successful among the direct selling companies in india because, unlike the multinationals, it keeps the prices of its products low. backed by an ongoing thrust on r&d and packing, samir says the company had successfully broken the myth of swadweshi being inferior to ``videshi.'''' weak postal and courier services in india are daunting factors for this business, he admits. at a time when multinational direct selling companies are investing heavily in training their distributors, modicare is initiating motivational programmes for its 200 strong team of employees.
these include efforts to make the environment at the workplace informal, friendly and genial. badges have been introduced urging people to smile and stay cheerful. massive increments, including the lowest one of 25 per cent and highest one of 136 per cent have been part of this drive. by stressing the human dimension, he feels there would be a rub off on the distributors who eventually are the numerous ``shops'''' of the company.
Offline Direct Seller Modicare Gets Court Order To Stop Amazon From Listing Its Products
US-headquartered ecommerce company Amazon has found itself in a legal tussle after Delhi-headquartered health and wellness product provider Modicare took the company to court for selling its products “illegally”.
In its order dated February 5, 2019, the Delhi High Court has ordered Amazon sellers— M/s. Laxmi Enterprises and M/s. Modicare DP Store — to stop selling, advertising, offering for sale or displaying Modicare products on Amazon India store.
Modicare Ltd in its application submitted to the Delhi High Court said that on Amazon.in, two of the sellers— M/s. Laxmi Enterprises and M/s. Modicare DP Store— are selling its products in violation of its direct selling guidelines by “indulging in unfair competition”.
The company claims that its products are sold via a door-to-door network of consultants, dealers and distributors, directly to consumers under the Direct Selling Guidelines, issued by the Department of Consumer Affairs. Modicare is owned by New Delhi businessman Samir Modi who is also the founder of Color bar cosmetics range and Twenty Four Seven chain of convenience stores.
To this, Amazon has defended that it is an intermediary as defined under the IT Act and in any event, “even if Amazon is handling the packaging, transportation and delivery of the goods, the safe harbor provisions under Section 79 of the IT Act continues to apply to Amazon.”
In March 2017, India Direct Selling Association (IDSA) wrote to players such as Amazon India, Flipkart, Snapdeal, Shopclues and Paytm, seeking action to stop unauthorized sale of products from member companies.
This included the sale of products from Amway, Oriflame, Avon Beauty Products, Herbalife International, Modicare and Tupperware, on their platforms.
Modicare has claimed that it first wrote to Amazon on January 13, 2017, to which it said it is an intermediary. To this, Amazon has contested that it has binding proof that Modicare was aware of these products being sold since 2016 and therefore, the court should not grant an ad-interim injunction. It also emphasized that Modicare hasn’t filed for infringement of trademarks and therefore, it “lacks any statutory backing.”
Some of the issues Modicare has with Amazon’s selling products include products being shown as being “by Modicare”, alteration of price, various defects in the products, and warranties being changed.
The court in its order has directed the sellers to take down the product with immediate effect, and at least within 48 hours from the order. However, Inc noted that various products being “sold by Modicare” are still available on Amazon.
The court has also directed Amazon to take “requisite steps” if the sellers are not identified as actual distributors of Modicare products within four weeks. The matter has been listed for next hearing on March 5, 2019.
The fake goods complaints have become a norm in the booming ecommerce market of India. A survey by Local Circles in November 2018 found that 19% of the respondents had received fake products from eCommerce companies in the last six months.
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