'We took the best of MLM and direct selling to introduce a unique distribution model.'

Arfeen Khan, one of the three directors of Cymbionic Marketing Pvt Ltd, came
to India five years ago, armed with 14 years of marketing experience in the US
and UK. Today Cymbionic is probably the only company in India to follow an
unique model of marketing IT products through multi- level marketing (MLM). Born
to parents of Indian origin, he came here with a vision of making MLM a success.
Arfeen is only 34 and the average age group of his entire staff is around 27
years. He talks about his success selling IT products in an interview with DQCI. 

Cymbionic is the first company in the country to market IT products
through MLM. What prompted you to take the plunge?

Initially, we had planned to sell our own branded PCs. But then we changed
our mind because we felt we were more of marketing people rather than traders.
So we diversified and started with other products. However, at the back of our
mind, we always felt someday we would get involved in IT industry, because we
knew that IT is the future.

Unlike most MLM companies that manufacture products and market them, we took
a complete u-turn. Instead of marketing our own products with our own price,
which could be very high as in most MLM cases, we market products that everybody
has heard of.

We have got major brands that are giving us the leverage and we are able to
offer quality products to customers. Also all our distributors have an advantage
because they have got this effective indirect virtual distributorship of Zenith,
Tata, Philips, Sharp and many others.

What makes Cymbionic different from other marketing companies?

We started off with a model that is very different from traditional MLM. We
looked at MLM and found it to be a great idea. It works successfully, but there
are some flaws in the system.

For example, often the entire distributor base becomes highly interdependent.
As a result lot of people at the bottom part of the organization lose out money,
and hence lose out on business. Which means it didn’t work very effectively.

So out of 100 distributors, maybe 10 are successful but 90 are stuck in
between because an efficient support structure was absent. We looked at that and
changed our system quite radically. First, we decided not to have a multi-tier
system and limited ourselves only to two levels. And second, we decided to have
a full-time manager to take care of a section of distributors.

Which IT companies have you tied up with?

We have been doing business with Zenith, Philips and Sharp. Recently we have
also entered into a tie-up with HP. We have partnered with IT training companies
like Boston Computer Education, St Angelos Computer Education and TCS.

In addition to all this, we are also tying up with an ISP. This would be
unique because without becoming an ISP, we will have our own ISP brand. In other
words, We have created a virtual ISP and will be marketing it under our brand
CymNet.

How do you define ‘distributors’ in your business?

Generally, distributors would mean outlets that sell products. My definition
of the word ‘distributor’ is somewhat different. A distributor for me is a
normal customer. For example, let’s say I want to sell 100 ISP connections.
One way of going about this is to distribute it among three outlets and ask them
to sell the product.

The other way is to get a hundred people and ask them to sell one each, which
is far quicker than making three outlets sell. Now I have a network of
distributors and all I need to do is give these products to my distributors
which they can easily sell among their friends and acquaintances. So actually my
customer itself is my distributor. And we literally have what we call a
customer-to-customer market.

How many such distributors do you have?

We have about 35,000 distributors. Majority of our customers become
distributors. So this number keeps growing.

Is Cymbionic the first MLM of its kind in India? What sort of growth do
you expect in your business?

Yes, I indeed think Cymbionic is first of its kind in the country. MLM has
been here for years, but undoubtedly our model is unique. We have taken the best
of MLM and the best of direct selling and put it together.

We see a good potential for our business. This stems from the fact that India
is still a developing country and hence immense opportunities lie ahead of us.

What products will you focus on in the future?

We are focusing a lot more now on educational products, which encompass IT
as well. We are also looking at a Web box that can be hooked on to any TV or a
set-top box in other words. Also once the telecom industry is deregulated fully,
we will definitely go into telecom products. For example, long distance calling
cards.

While most companies know that service is an important part of doing
business, certain surveys show that even big MNCs have failed in providing good
service in India? How will you handle service for products that you sell?

In India, customers always want products at cheaper rates with services as
well. Three or four years ago this was not the case. But today the customer
knows that he has got a choice. In providing service for products that we sell,
there are two options available.

One option is that customers contact vendors directly. The other option is
that they get in touch with Cymbionic to get the required service. However, the
only product that is really serviceable is computers and that accounts for 30
percent of our sales.

In most complaints that we have received so far, vendors have been very quick
to resolve the issues. In each product range we have brought in two suppliers of
the same product. By doing this we intend to create competition. We tell vendors
that if their company provides good support to the customer, we will promote
their brand more than the other brand. And that way we ensure that all vendors
put in maximum efforts to provide the best customer support.

NELSON JOHNY in Mumbai