CORPORATE NEWS 07
mint
WEDNESDAY, DECEMBER 31, 2008, DELHI ° WWW.LIVEMINT.COM
OUTSOURCING STRATEGY multiple languages in its staff fice in Chennai is designated
will give it a competitive envi- as the French centre, while a
Steria hopes French, German are ronment. 1,000-employee operation in
“Language is a key issue that Pune will focus on German.
Indian companies face when The UK-based Xansa worked
going to Europe, so this is an primarily for British clients, in-
advantage,” insists Steria’s cluding public sector firms
languages of success in Europe chief executive in India, Muke- such as the Royal Mail Group
sh Aghi. He describes a con- Ltd, Britain’s chain of post of-
versation he had with a Euro- fices. Steria says UK alone ac-
pean customer who runs a counts for about 85% of work
BPO in Warsaw and has an em- offshored to India from Eu-
ABHIJIT BHATLEKAR/MINT
1,000 employees being ployee attrition rate of 70%. rope.
“The work ethic (is) very dif- After the acquisition, Steria
trained to speak The firm has ferent,” says Aghi, arguing that started offering 20-hour
European languages to India-based centres can com- French courses to anyone in-
designated its
give the company a pete with centres in eastern terested in taking them, and
Chennai office Europe. “In India, they see it around 60-80 employees cy-
competitive edge (such jobs) as very good career cled through each month. Ste-
as the French growth.” ria then started conducting in-
B Y A RUNA V ISWANATHA Chiraj Jain, for example, has termediate classes in conjunc-
centre; its Pune been with Steria in India for tion with the Alliance Fran-
aruna.v@livemint.com
························· four years, and took German caise, with 100 certified French
operations will
NEW DELHI classes when the company of- speakers, and around 50 certi-
O fied in German.
utsourcing services fered them.
focus on German The company also supple-
provider Groupe Steria “We may not be that fluent
mented its existing cultural
SCA is betting large on when it comes to talking, but
Language lessons: Mukesh Aghi, India chief executive of Steria. training for Indian employees
being able to expand its Euro- we have working knowledge,”
going to the UK with material
pean business from India after Jain says, describing an in-
on French cuisine and French
the Paris-based information spend around €49 billion on IT have built up their European Steria is trying to work stance where he was able to
wine. Steria’s goal is to have
technology services company outsourcing in 2009, according business as a way to decrease around that, by training 1,000 translate an email that came
10% of the company’s India
acquired a 5,000-strong work- to Ovum, a tech services re- reliance on contracts with US of its employees to speak Euro- from a German client, asking
workforce speak French or
force here after buying British search and consulting firm. In- companies, but Indian provid- pean languages. about certain technical capa-
German.
offshorer Xansa Plc. last year. dian IT services companies ers have generally handled Plus, “only India has bilities.
“We’re hoping that at some
It could be a tall order as such as Tata Consultancy Serv- that work through centres in the...capability to get 50 testers Anil Dhar, another Steria
point European governments
many Indian outsourcing pro- ices Ltd and Wipro Technolo- eastern Europe or north Africa, overnight,” says Steria’s mar- employee who works on a call
and enterprises will be forced
viders have had less success gies Ltd get around 10% of in part to account for language keting manager, Sachdev Ram- centre process, says he was
to look at India much more
with continental European their revenues through clients limitations including the chal- akrishna, referring to ready able to get by on his French
freely,” says Steria’s human re-
customers than, say, US firms. based in Europe. lenges of finding sufficient availability of employees who even when he went to Paris for
sources director Shantanu
Companies in Europe, ex- Many Indian technology and French and German speakers run tests on new software. one week on a client visit.
cluding the UK, are set to back office service providers in India. Steria is hoping that offering Steria’s 1,500-employee of- Banerjee.
ABHIJIT BHATLEKAR/MINT
BRAND REVIVAL the negative associations of worked at The Coca-Cola Co.,
Amway have now begun to Procter and Gamble Co. and
Amway eyes US comeback after fade,” says Tridib Mazumdar, a L’Oreal SA.
marketing professor at Syra- Matthews says her job is to
cuse University. “bring the discipline of mar-
success, scrutiny in India, China Daniel Howard, a marketing keting to an organization that’s
professor at Southern Method- been really sales-driven”.
ist University, says each term Lieberman came aboard af-
he asks his students whether ter hearing from a recruiter
PHOTOGRAPHS BY AP
they have heard of Amway, about an opening at Quixtar.
and each term “the vast major- “I said, ‘Quixtar? I’ve never
ity” respond affirmatively. heard of Quixtar.’ So I went on New offering: RCom’s Anil Ambani.
“Branding is what marketing the Internet and went, ‘Oh, it’s
is all about, and the decision to the old Amway company.’ I
RCom starts
do away with Quixtar was an didn’t know they still existed,”
excellent decision,” he says. he says.
nationwide
“The Amway name is already His two-pronged attack con-
fairly well established in the sists of rebuilding the Amway
minds of the American con- brand and educating distribu-
GSM service
sumer.” tors and customers. The new
The Quixtar name simply ads phase out the Quixtar
never caught on, company ex- brand by showing it gradually
B Y B HUMA S HRIVASTAVA
ecutives say. decreasing in prominence over &
S HAUVIK G HOSH
“The research said Quixtar the course of the ad campaign.
·························
had a recognition (rate) of 3%; The Amway Global logo
MUMBAI
Amway had a recognition of modifies the Amway logo that
T
76%, as I remember,” says De- has been used throughout the he country’s second larg-
Vos, referring to a study Alticor rest of the world since 2000. est mobile services firm by
that commissioned in 2006. Directly below the blue Amway subscriber base, Reliance
Van Andel’s and DeVos’ fa- name on a white background Communications Ltd (RCom),
thers, Jay Van Andel and Rich now lies the word “Global” in on Tuesday announced the na-
DeVos, founded Amway—an smaller letters, with a thin, red tionwide launch of its Global
abbreviation of American swoosh separating the words. System for Mobility, or GSM,
Way—in 1959, offering the Officials declined to say how wireless service.
promise that anyone who much Alticor is spending on The move makes it the ninth
Direct approach: (L to R) Alticor president and co-CEO Doug DeVos, Amway Global managing director Steve worked hard could operate marketing, but Lieberman said player in the GSM-based mar-
their own successful business. it’s spending about as much as ket.
Lieberman, and Alticor’s chief marketing officer Candace Matthews. Alticor has brought in Lieberman and
Amway focused at first on other large direct-sales com- Beginning on Wednesday,
Matthews to help revitalize the Amway brand in North America.
household cleaners, then ex- panies, such as Mary Kay Inc., the service will be available in
B Y J AMES P RICHARD panded its product line in the Herbalife International Inc.
television commercials and pany predicts another $1 bil- 11,000 towns and 340,000 vil-
1970s to include more nutri- and the industry’s top-seller,
ads in newspapers and maga- lion increase this year. And lages and will reach 24,000
feedback@livemint.com
························· tional products and, a decade Avon Products Inc.
zines and online. The compa- most of its recent growth, in towns and 600,000 villages in a
ADA, MICHIGAN later, more cosmetics. The “Before, our spending was
ny will use a transitional name, such developing Asian markets few months, RCom chairman
O company manufactures all its relatively nonexistent,” he
nce a household name Amway Global, before revert- as China, India and Russia, has Anil Ambani said at a press
own products. says.
and reputedly the key to ing in about a year to Amway. been under the Amway name. conference in Mumbai.
The Federal Trade Commis- The privately owned firm,
great fortune for modern sales- “We thought, well, if we’re “In the late 1980s, about “We have invested Rs10,000
sion examined Amway’s busi- based in Ada, about 10 miles
men hoping to live out a Hora- going to build a brand, build three-quarters of our business crore as GSM capex (capital
ness model during the 1970s, (16km) east of Grand Rapids,
tio Alger myth, the Amway the brand that everybody was here in the US,” says Steve expenditure) till now and will
concluding in 1979 that it was still makes and sells the L.O.C.
brand faded from the US mar- knows already,” Alticor presi- Van Andel, Alticor’s chairman be spending a few thousand
not an illegal pyramid scheme household cleaners that made
ket years ago, tarnished by le- dent and co-CEO Doug DeVos and co-chief executive and— crore going forward,” he said,
because compensation is Amway famous, as well as
gal and regulatory problems. said in an interview. “It’s going like DeVos—the son of one of noting that the rollout was six
based on retail sales to con- food, apparel, baby-care items
The direct-seller of every- to be much more successful Amway’s founders. “Now months ahead of schedule.
sumers and because sales peo- and jewellery. But the new
thing from health and beauty and cost a lot less and happen about 80% of it is outside the While Ambani declined to
ple are not paid for recruiting push focuses on Nutrilite vita-
items to household cleaners a lot faster.” country.” give a break-even period or
new colleagues. min supplements and Artistry
repeatedly fought allegations Despite predictions of con- The company is gambling tariff plans, RCom’s president
Still, it continues to draw skin care products.
that it was a pyramid scheme. tinuing economic gloom, Alti- that consumers at home, for wireless operations S.P.
critics and government scruti- Amway does business in
The company also paid $20 cor executives hope to repeat where sales have been flat for Shukla said, “The pricing will
ny, including recent investiga- most of the world, except
million in fines in a Canadian in the US the kind of growth years, will remember the days be announced for each circle
tions in England, India and northern Africa and West Asia
criminal fraud case in 1983. they’ve seen abroad in the past when Amway was known less separately and, barring a cou-
China. because expanding there
In 2000, after Amway be- —and to revive the mystique for scandal and more for unre- ple of common offers, each cir-
Van Andel and DeVos have would be “too complicated”,
come part of an umbrella com- that helped the company lenting pitches from well- cle will have a unique custom-
brought in two key marketing Van Andel says. The most logi-
pany called Alticor Inc., the spread throughout the Mid- scrubbed and optimistic door- ized solution depending on
executives to help revitalize cal move was to reinvent Am-
Amway name was dropped in west and, by the mid-1960s, to-door salesmen. whether it is a metropolitan or
the Amway brand in North way in the US.
the US and Canada. The hope the rest of the US. Amway’s Marketing experts say that, a rural area.” The wireless
America. “We’ve got to take a look at
was that the company could hundreds of thousands of dis- despite the baggage attached market has 22 circles.
One is Steve Lieberman, the markets that we’ve been in
emerge wholly remade in the tributors dreamed of getting to the brand, the company is RCom added 1.77 million
managing director of Amway a while, like the US, that are
world of online sales under a rich by selling cleaning prod- doing the right thing by bring- users in November, taking it’s
Global, who spent much of his mature, that have been kind of
new moniker: Quixtar. ucts and by recruiting their ac- ing Amway back to North Am- total number of subscribers to
career at S.C. Johnson and Son just kind of stable and going
Now, as Amway’s 50th anni- quaintances to join the fold. erica in a campaign that 59.6 million.
Inc., which makes household along but haven’t had any
versary approaches in May, Al- Still operating on that basic launched in March and first The firm’s shares rose 7.16%
products such as Windex win- huge growth spurts,” Van An-
ticor is retiring the inert Quix- model, including prices that made a splash in October with to Rs228.10 on the Bombay
dow cleaner and Ziploc plastic del says. “We’ve got to take a
tar label and pouring millions tend to be higher than those of sponsorship of a Tina Turner Stock Exchange, beating the
storage bags. The other is Alti- look at what we can do now to
of dollars into reviving the Am- their competitors, Amway saw concert tour that concludes in bellwether Sensex index, which
cor chief marketing officer get those markets up and mov-
way brand in North America global sales revenue top $7.1 April. rose 1.92% to 9,716.16 points.
ing again.” AP
Candace Matthews, who has
with market research, national billion in fiscal 2007. The com- “My sense is that many of bhuma.s@livemint.com