Teji Mandi Explains: Amway and its ‘Get-Rich’ schemes!

Remember the time when everybody was obsessed and saw profits in Amway products? The same brand is now recognised as a scam by the Enforcement Directorate. Teji Mandi looks into Amway India's business model and why the ED tags it as a 'marketing scam'.

Teji MandiUpdated:Friday, April 22, 2022, 04:22 PM IST
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Representative image | Photo Credit: @amwayindia/Twitter

What’s Happening?

Amway sells a range of hygiene, beauty and personal care products. Every Indian middle-class household knows or might’ve been a part of Amway. It was portrayed as a premium brand, but it seems that it was just a recruitment program. According to reports, over the years, consumers have been duped by ‘direct sellers’ hawking defective products and services in the name of direct selling. They promised people it would be a lifetime opportunity, but it was just another large pyramid scheme.

The ED has provisionally attached 750 crores worth of assets belonging to Amway India. The ED claimed that most Amway products are exorbitantly priced. It said that between FY2003 and FY2022, Amway collected Rs 27,562 crore, of which it paid commissions worth Rs 7,588 crore to affiliate members and distributors.

What’s Next In-Line?

Amway has denied allegations and has said it will help with the investigation. This is not the first time Amway has been in troubled waters. It was alleged of financial fraud earlier when the company’s CEO was arrested. Until ED finds something illegal, Amway will not be held guilty. However, the flak against the brand has done the damage.

What Lies Ahead?

ED is continuing with its investigation. If any traces of money laundering are found in the company, it will be quite the end for Amway. A lot depends on the ED now. Will it stick to its investigation, or will the case take a different turn? Well, only time will tell.

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