What do Delhi-based gynaecologist Sanjoo Gambhir and Namibia-based Peter have in common? They enjoy jigging _ last fortnight they were dancing to Tina Turner's foot-tapping Its Simply the Best and Vengaboys' Brazil at the Radisson hotel. Both like to stay fit and make money. Above all, both are Herbalife distributors which makes all this possible.
The jig they were last seen at was one of the many Herbalife Opportunity Meets (HOMs) being organised across the country by Herbalife International, the $2 billion American direct selling major. The network marketing company, similar to big players, like Amway, Oriflame and Avon, launched its weight management product _ Herbalife health drink, tablets and capsules _ in India in November 1999.
Ever since, the magic potion is being lapped up, literally, by the young and old, obese and underweight Indians across the length and breadth of the country.
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The Herbalife USP is simple.It helps you lose or gain weight or simply work as a fitness drink. Also, like other direct selling companies it offers a money-spinning opportunity to those who enroll as its distributors.
Within six months Herbalife claims to be a runaway success. The company has enrolled 30,000 distributors and reportedly achieved a sales turnover of nearly Rs 20 crore. Its distributors claim that March sales alone totalled about Rs 6.5 crore. The company's Bangalore-based spokesman refused to talk numbers." It is too early to report specific numbers, but we are very pleased with the level of sales achieved to date. We view our entry into India as a great success." he says.
Herbalife's primary target is the high-income earner who represent 3.6 per cent of the total Indian population numbering 35 million. To be sure, the company has whipped up an aggressive marketing strategy for India Observes Sanat Products' (makers of Bioslim tablets) marketing and sales controller Samar S Sheikhawat: "It is typical American hype and in-your-face marketing. Agrees Oriflame chief executive
Herbalife's twice-weekly HOMs or Herbalife Opportunity Meets are loud, adrenaline pumping affairs. Organised at various five-star hotel, an average meeting draws nearly 1,000 people who are treated to blaring music and a little jig by Herbalife's Indian and international distributors (mostly slim, trim blondes and lanky young guys.
The strategy effectively uses Indians to explain the product and its direct selling plan in the local language. More often than not doctors are used for the purpose. Feel-good tales about weight loss and big profits are narrated. "The demo effect is strong," admits Shiekhawat.
So is it eating into the slimming tablets market? No, says Sheikhawat adding that Bioslim has grown 150 per cent over last year into a Rs 3 crore brand. He feels that Herbalife will grow the overall slimming market.currently pegged at Rs 6 crore.
Herbalife is also augmenting the fortunes of its distributors. Especially, the white-skinned ones who have swooped on India from America, Australia, Canada and South Africa.Some have literally taken to the road to appoint their own set of Indian distributors. Remember Peter, the Namibian distributor jigging at Radisson? He can be found distributing leaflets, carrying his local contact number, at traffic signals in Delhi inviting people to an "exciting new business opportunity".
Cryptic messages such as "Lose Weight Now, Ask Me How", "behind private cars are also being used effectively.
Herbalife may be catching on here for several reasons.Indians are open to herbal products, the start-up cost of the business at Rs 1,000 is low and the compensation for sales generous.
Herbalife may compete with Oriflame or Amway. once it launches its herbal cosmetics range and when the $6 billion Amway brings in its nutrition products and cosmetics into the country. An Amway India official says the company is not threatened by Herbalife's entry. The company is well-entrenched in the country with a Rs 250 crore turnover in 1999-2000.
Currently, Herbalife sells its range of health, skin and hair care products in 46 countries through one million independent distributors.