Neha Kaushik

Modicare is bullish about the direct marketing industry and is preparing itself for an international foray.

WITH Indian direct selling steadily coming of age, home-bred player Modicare is all set to roll out a range of new initiatives to boost its sales. Not only is the company working on new schemes and training programmes for its consultants, it is also revamping its entire product portfolio to eventually make a mark in the international markets.

"With the growing domestic economy and higher aspirations among Indians, there is much potential for growth. In fact, we feel the Indian direct selling industry has the potential to grow from about $0.5 billion last year to about $5 billion in the next five years," points out Chris Bolsover, the new Chief Operating Officer of Modicare Ltd. The Indian direct selling industry grew from only about Rs 300 crore seven years ago to about Rs 2,300 crore last year.

Modicare's revamp will result in changes in image, packaging and even the formulations. "We are preparing for an international foray (including in markets such as the US) with our products, though our focus would be on the Indian market for the next two years. We would be adding an Indian feel to the products to make them more appealing to the consumer," says Bolsover.

While this would involve launching Ayurvedic or herbal products, the company is also working on increasing its sourcing base both locally and internationally. Simultaneously, Modicare is planning to branch out into high-growth categories such as health and is diversifying into categories such as nutritive/preventive food products and exercise equipment as well.

The company has begun to market Well, a range of wellness products that now comprises Modicare Well High Protein Body Nourisher and Modicare Well AM-PM Energising & Stress Relieving Dietary Supplement. The former, a blend of soy and milk proteins, costs Rs 690 for 200 gm. The AM-PM, described as a combination of modern science and Ayurveda, is claimed to improve nutrition and manage stress. It is priced at Rs 1,440 for a pack of 60 capsules. The company anticipates the nutrition and wellness category will take at least 15 per cent of the product pie. It is also expected to bring in more distributors into the Modicare network. The company aims to launch a total of eight products in the Well range by end-2004. It would also look at weight management products later.

Says Bolsover, "In fact, we intend to use our network to sell services such as education and insurance as well and are in talks with various companies. To keep the excitement going, we will be launching new products every quarter."

The restructuring is not only at the product end. To help lay the foundation for stronger growth, Modicare, in addition to Bolsover, has also inducted training and networking experts David Hooker and Colin Hoo at the company's top management level to help retain, train, and motivate Modicare's distributor base. Incidentally, one of the major problems faced by the direct selling industry is retaining and motivating people. Further, Modicare is rolling out a number of incentives/income and training schemes for its 4,50,000 consultant base to raise productivity by about 60 per cent. It recently introduced a Wealth Creation scheme to help improve the consultants' profitability. "The `Enhanced Compensation Plan' is designed to build stronger and stable leaderships with higher volumes and is the highlight of the year 2004 for all Modicare consultants. It provides increased profitability at lower levels as well as improved profitability at leadership levels. The consultants also receive heightened recognition," says Bolsover.

Further, the company has started a Modicare School of Entrepreneurship to support and train consultants. The school will offer classes, seminars, and workshops on all aspects of entrepreneurship and business management along with interactive training sessions conducted by Hooker and Hoo. "Initially, we will offer distance learning programmes to the consultants on how to sell products and other basic aspects," says Bolsover. The experts will also prepare educational material that can be distributed to the general public through Modicare.

With its strategies in place, Modicare has moved into its next phase of expansion this month. It is eventually targeting to improve its turnover to Rs 350 crore this fiscal from about Rs 250 crore last year. However, only time will tell whether Modicare's new strategy enables it to carve a niche in the fast-growing domestic as well as the international markets.

Reporter Associate Sravanthi Challapalli

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