With a presence in over 140 countries, the Fortune 500 Avon Products Inc., is the largest direct-selling company in the world. And India is considered a critical market by the company. Hemant Singh, MD, Avon India, explains to B&E’s Steven Philip Warner how Avon fanatically believes in reaching out to the masses with the right investments in R&D and how, the company for now, is all about ‘Organic’ growth.
For the first twenty-seven years of his career, Hemant Singh worked at HUL, PepsiCo and Modicare (he was the CEO of Modicare, when he left the company). 2009 saw him being welcome aboard the $10.86 billion-a-year revenue-earning (FY2010) company – Avon Products Ltd., as its Executive Director (Business Development) for the APAC region. Today, he serves as the MD of Avon India. In an exclusive interview with B&E, this man who runs the show at a company which prides itself for being “The Company for Women,” reveals some geographical market-specific trade secrets.
B&E: India as a market contributes to less than 5% of Avon’s global sales. How important really is India for the largest direct selling company in the world?
HS: There is a reason for it. The company was started 125 years ago. In India, the industry is only 15 years old. So first, there is the time gap. Secondly, given the pace at which we are growing, India is fast becoming a huge grosser for us. Our rate of growth in this market has been phenomenal. In 2009, Avon’s India revenues grew at 46%. In 2010, we grew 56%. And as we speak, this year already, the growth has been 55% y-o-y. And our plan for the next 5 years is that we should grow at a CAGR of 60%. I don’t think any company in our business in India can even talk about such figures. So yes, India is very important for Avon.
B&E: So would India be a market more important than China?
HS: No. India and China, from the point of view of the population and the rate of growth, are both right up there amongst the two most important markets in the APAC region.
B&E: Jewellery is something that you added much later in your portfolio, globally. Did that call for any change in approach to your sales strategy?
HS: Whether it be skincare or colours or jewelry, they all fall in the same superset called beauty products. So the introduction of the jewellery range did not influence our sales strategy really. As far as India is concerned, jewellery is naturally a huge opportunity. It is a $13 billion market. Of that $10 billion is real jewelry, and the rest is all about gold & silver-plated jewellery, which is what we do. At present, this fast growing segment contributes to 17% of our sales, while colours (& cosmetics) and skincare contribute to 40% and 15% respectively. So that gives a good perspective of how fast we have grown in the jewellery segment.
B&E: Let’s talk about outsourcing. You currently have close to 1000 products in your portfolio. There must be a huge chunk of that being obtained through outsourcing of the manufacturing function. Right?
HS: Most of our products are made in-house. But that does not mean that in every country where we are present, we have a factory. In India, we have a plant in Dehradun, which has a multi-product manufacturing capability with a limit up to 50 million units a year. But having said that, we do outsource as well. In fact, for many of our products, we have a global sourcing strategy in place.
For the first twenty-seven years of his career, Hemant Singh worked at HUL, PepsiCo and Modicare (he was the CEO of Modicare, when he left the company). 2009 saw him being welcome aboard the $10.86 billion-a-year revenue-earning (FY2010) company – Avon Products Ltd., as its Executive Director (Business Development) for the APAC region. Today, he serves as the MD of Avon India. In an exclusive interview with B&E, this man who runs the show at a company which prides itself for being “The Company for Women,” reveals some geographical market-specific trade secrets.
B&E: India as a market contributes to less than 5% of Avon’s global sales. How important really is India for the largest direct selling company in the world?
HS: There is a reason for it. The company was started 125 years ago. In India, the industry is only 15 years old. So first, there is the time gap. Secondly, given the pace at which we are growing, India is fast becoming a huge grosser for us. Our rate of growth in this market has been phenomenal. In 2009, Avon’s India revenues grew at 46%. In 2010, we grew 56%. And as we speak, this year already, the growth has been 55% y-o-y. And our plan for the next 5 years is that we should grow at a CAGR of 60%. I don’t think any company in our business in India can even talk about such figures. So yes, India is very important for Avon.
B&E: So would India be a market more important than China?
HS: No. India and China, from the point of view of the population and the rate of growth, are both right up there amongst the two most important markets in the APAC region.
B&E: Jewellery is something that you added much later in your portfolio, globally. Did that call for any change in approach to your sales strategy?
HS: Whether it be skincare or colours or jewelry, they all fall in the same superset called beauty products. So the introduction of the jewellery range did not influence our sales strategy really. As far as India is concerned, jewellery is naturally a huge opportunity. It is a $13 billion market. Of that $10 billion is real jewelry, and the rest is all about gold & silver-plated jewellery, which is what we do. At present, this fast growing segment contributes to 17% of our sales, while colours (& cosmetics) and skincare contribute to 40% and 15% respectively. So that gives a good perspective of how fast we have grown in the jewellery segment.
B&E: Let’s talk about outsourcing. You currently have close to 1000 products in your portfolio. There must be a huge chunk of that being obtained through outsourcing of the manufacturing function. Right?
HS: Most of our products are made in-house. But that does not mean that in every country where we are present, we have a factory. In India, we have a plant in Dehradun, which has a multi-product manufacturing capability with a limit up to 50 million units a year. But having said that, we do outsource as well. In fact, for many of our products, we have a global sourcing strategy in place.
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