Modicare Limited is one of India's leading direct selling company offering products across various categories like personal care, skin care, colour cosmetics, home care, laundry care, agriculture, auto care, nutrition, food & beverage and health & wellness.  Modi is also the chairman of Modi Enterprises, a group of companies with many international partners, including businesses that of cigarettes, tea & beverages, entertainment, consumer products, network marketing, chemicals, tertiary education and gourmet restaurants.

Tell us about the genesis of Modicare.
While travelling from one country to another, one comes across people from all walks of life. About 14-15 years back, I met some people—the kinds who one would generally never expect to come and talk to you, actually making a proposition to me to start a business. I was intrigued by it and started to look into this fast becoming popular business of multi-level marketing. The mix of people doing this business also caught my attention—there were those who did this as a part-time business, there were housewives, the unemployed, also some people who had quit their jobs to do this business full-time. I saw an opportunity in bringing this business of multi-level marketing to India.

Our first approach was to seek partnership with some foreign firms to learn from them; but we soon realized that most of them wanted to venture into India on their own. Hence, we decided to start our business independently. We roped in a few people with prior experience and expertise in the field of multi-level marketing (MLM) in different parts of the world and we started out as Modicare.

What is the one key challenge in setting up an MLM business?
This business encompasses a very large number of non-professional people to do a professional’s job. So the biggest challenge was how to make these consultants understand this concept. The challenge is in getting them enthused, teaching them how to make a pitch, etc.

In India, particularly in the middle class segment, there seems to be some sort of reluctance when it comes to the thought of selling something to family and friends, to make profits. So, while the wives and students in China feel proud about working in this line of business, we tend to stop ourselves from getting into it.

One of the biggest problems we face is that many people join this line of business without clearly understanding it. Yes, people have made real good money for themselves in MLM. However, it takes a lot of hard work. Now when people join the network without understanding this, they tend to lose hope very fast. The return in this line of business comes in a certain period of time, not immediately.

MLM companies have had to deal with one disturbing trend time and again. For instance, some company (competition) comes up and promises easy money and this fact troubles the consultants of our company. The fact is that everyone wants to cut corners and move as fast as possible. However, here is the message that needs to be clearly understood: If you do not put in effort, you will have to invest a lot of money and still the rate of return will be small. If you put in small amount of money and do not put in efforts and still are promised high returns, there is a good possibility of it being a scam. If you put a small amount of money together with a lot of effort, and provided that the work done is consistent and of good quality, there is a lot of good returns that can be gained.

How do you get around the scepticism about MLM business is usually scams?
The whole idea of investing a small amount and getting good returns, without putting in any effort is what the scammers promise and people get cheated. These MLM companies do not last for long; but these companies do give a bad reputation to the industry.

The fact is that in the MLM business the capital that the consultants invest is their effort, not the money. In case of genuine MLM businesses like ours, we are clear about the fact that the money invested is small, but the consultants have to inevitably bring in value by a lot of consistent hard work to make good returns from it.

What are the key elements for success in this line of business?
This business is very simple to do. The key factor for success is desire. You need to have a strong desire to have something—a car, a house, or any such thing. The fact is that if one can afford to buy the things you desire with your current income, he or she does not need to get into the business of MLM. However, if the desire does not have a means to end, the person who gets into the business of MLM will put his heart and soul to surpass all rejections and dejections, which is a part of the business. Secondly, one needs to believe that he or she is bound to succeed. If these two elements exists, the person can easily be guided to succeed by Modicare through their executives and consultants.

What are the product categories that should not be even explored for MLM business?
MLM is one-to-one marketing. Therefore, you should concentrate on products which otherwise cannot be sold without having to explain to the customer about how to use the product, how they can benefit from this product, and also to an extent help them by being available to give them advice, if they have any questions or doubts when they use the product. For instance, people do not need the help of the seller in understanding the usage of a product like sugar; but if it is a telephone or a cleaning device or some health-related product, it is likely that one would require advice. Those are the products that are normally sold through MLM.

Also important is the fact that these products should come with full money-back policies. This is because the buyer generally happens to be some friend, colleague, or relative; and if for some reason they are not satisfied with the product, the consultant should not fail them in terms of maintaining their goodwill and trust. Hence, the product also has to be such that distance selling is not involved.

Considering that you have some many businesses in the conglomerate, how do you stay on top of things?
Honestly, I cannot remain on top of things. But I can surely review what has been promised by the management of the companies. We typically run our businesses on three-year rolling plans. The managements specify what they plan to do in these three years with special focus on what is the plan for the next financial year. Once a direction is established, the performance is measured in comparison with businesses in India and abroad. If I have issues with the directions, I raise the concerns before the directions get established. Then, it becomes really easy to keep updated about things by meeting people once in a month or so. Also, I make it a point to talk to different people, rather than talking to one single point of contact, to get a holistic overview of what is happening in the organization.

What would be the next big thing in the MLM business?
I think in India the MLM business still has had only a very limited penetration. Let me tell you about an experience I had in Dallas, Texas, USA. I was travelling in a cab and chatting with the chauffeur. I asked him if he does anything else besides driving the cab, to which he replied that he is an electronic multi-level marketer. Now that is the next big thing—extensive use of the Internet and social networks to connect to each other and expand the horizons of networking offline.

As for Modicare, the next big thing will be to go international. I think we should be able to do that in the next couple of years.

What was your first big success as an entrepreneur?
There have been many successes that have got me to this level. Along with our family, I have started some of our businesses from the scratch. Looking back, I can think of some exceptional milestones though. Godfrey Philips (tobacco company) and Indofil Chemical (agro-chemical company) were bought when the companies were sick and were almost no-value companies. I would say turning these around, by finding solutions to how these companies were losing money, and taking them to the next level i.e. making money, and getting them to become valuable as of today, is something I would term as a milestone successes.

What is the one thing that aspiring entrepreneurs should avoid when starting up?
They should avoid doubting theirselves. Once you avoid that, you realize that making money is the easy part and the hardest part is to believe in yourself and that you can make money. Of course, there will be testing times in the path to success; he should not give in to the problems in the middle of it all. He will find a solution when he continues slowly, steadily, and is calculative. When you start an enterprise, do it with a belief that you can solve every problem that shows up and believe that you are going to succeed.

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LUBINGHUA
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