Amway China - Worlds best Amway market.

1. 12/4/2009 Amway's China Redux - Forbes.com
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On The Cover/Top Stories
Amway's China Redux
Dan Levin, 08.27.09, 06:00 PM EDT
Forbes Asia Magazine dated September 07, 2009 Get Stories By Email
The direct-sales force sweeps past mainland hurdles Select Topics:
with its array of pricey products. Cheung Kong
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Learning experience: ''People were suspicious of us,''
says Audie Wong, president of Amway China. Business On Main
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If making money is China's real religion, then Kong Xin is a true
Buy a link here
believer. Grinning like a missionary and dressed like one, too,
the 34-year-old entrepreneur was standing in line at Amway
China's Beijing headquarters eagerly waiting to shell out $150
for tubes of toothpaste. For Kong, one of Amway China's
GO
200,000 active sales representatives, the secret to prosperity
amid the country's chaotic economic growth tastes like mint, Content Management Softw are Accounting Softw are
and he can't get enough of it. Email Marketing Softw are eCommerce Softw are
Project Management Softw are Help Desk Softw are
Through a bitter global downturn, Amway, the global direct- >> Brow se All Directories
sales company, is having a banner year, thanks to China. The
country is now Amway's biggest market, with gross sales
soaring 27% to 17 billion yuan, or $2.5 billion, in 2008. (Closely Most Popular
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pushing the company's 200
products. No matter that these NEWSLETTER
wares often are priced significantly COMMENTS (2)
higher than similar products in SHARE
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2. 12/4/2009 Amway's China Redux - Forbes.com
China's department stores and YAHOO! BUZZ
corner shops. China's newly
wealthy, eager to have the biggest and the best, are clamoring
to own a 50-year-old brand that in the West is more commonly
associated with past-generation Americana. Amway, whose
Michigan parent Alticor is the 44th-largest U.S. private
company on FORBES' list, has struggled at home in recent
years. Some 80% of sales now come from abroad.
Amway's history in China has not been without struggle, either.
The company arrived in 1995 and quickly drew the ire of the
government, which was frightened by an Amway sales culture
that inspired almost fanatic devotion. A direct-sales network of
interpersonal relationships caused worry that it could one day
lure Chinese loyalty away from the Communist Party.
Meanwhile, economic reforms had spawned dozens of pyramid-
scheme scandals the government was frantically trying to
eradicate.
In response, the government banned all direct-sales
companies in 1998, claiming they were "evil cults, secret
societies and superstitious and lawless activities."
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"When we came to China,
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the government didn't
really understand what Your Rating
direct selling is," says Overall Rating
Audie Wong, president of
Amway China. "Back then Reader Comments
a lot of people were very
Its amazing that Amway is
suspicious of us, and it
growing leaps and bounds
took them many years to in China. It obviously shows
understand our approach." how much confidence and
faith the people of China
Unwilling to lose the have on Amway. India is
Chinese market, Amway also growing fast and will
agreed to deviate from its soon catch up wit....
global model and has
opened up 200 retail Read All Comments (2)
shops to show those in Post a Comment
power it was not a threat.
The company has 6,000 employees on its Chinese payroll.
Other direct-sales companies made similar adjustments.
forbes.com/…/companies-sales-amway-… 2/5

3. 12/4/2009 Amway's China Redux - Forbes.com
"During that period Amway convinced the government we were
a trustworthy company that's not going to run away," says
Hong Kong-born Wong, 57, who's spent more than half of his
28 years with Amway on the mainland and reports to Eva
Cheng, the regional executive vice president, ranked No. 92 on
our list of the World's Most Powerful Women. "We worked very
hard to rebuild our brand, and now the government trusts us."
Today, in the four years since China changed the rules on
direct sales following accession to the World Trade
Organization, Amway has flourished, pouring money into ad
campaigns and training a ballooning sales corps. "If you want
to sell a product, you can come up with lots of reasons why
people should buy it," says Wong, though the company tries to
ensure that entrepreneurial ardor doesn't get out of hand. "We
tell them not to exaggerate. With more experience they will
learn how to counter an objection."
Kong is a quick study. When he started selling makeup, diet
supplements and other Amway products part-time five years
ago, he was making 700 yuan, about $85, a month. Today, as
a full-time sales representative with 300 customers, he earns
$2,340 a month. Last year, Kong said, he netted $22,000, a
princely sum in a country where, according to the National
Statistics Bureau, the average annual corporate income is
about $5,100.
"I come here every other day to make a purchase and sell out
within 24 hours," he enthuses. "Not only do I sell people
products they love, but I get to run my own business, rather
than work in an office."
Newer recruits like Xue Fei, 32, are equally motivated. The
part-time sales rep discovered Amway from a friend a year ago
and now has two chums working for her. "Amway provides
good service and products for Chinese people," she says,
carting bags of makeup and vitamins out of the Beijing offices.
"Why shouldn't we be telling our friends about it?"
The fervor is such that the government has barred teachers,
doctors, soldiers and college students from working for Amway,
out of fear authority figures and young people may be tempted
to act irresponsibly in order to make a sale. And skeptics of
Amway's popularity in China remain.
"The company came up with solutions --opening stores and
hiring salespeople--to make the government think Amway is a
traditional business, which it's not," says Sun Baohong,
professor of marketing at the Cheung Kong ( CHEUY.PK -
news - people ) Graduate School of Business in Beijing.
"Amway is smart. They try to hide the fact that the company is
a money collecting system by taking advantage of guanxi," the
powerful web of personal relations essential to success in
China.
Wong, the company president, might describe this compliance
not as deception but as a management test. After previous
stints in Hong Kong and Taiwan, he says, "It has been a
fantastic learning experience managing in the three markets.
But China dwarfed it all when it comes to scale, complexity and
possibility."
Professor Sun admits Amway's marketing strategy has proved
itself: "People here want to get rich quickly, and their friends
make it sound like it's easy money."
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4. 12/4/2009 Amway's China Redux - Forbes.com
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Reader Comments
Its amazing that Amway is growing leaps and bounds in
China. It obviously shows how much confidence and faith
the people of China have on Amway. India is also
growing fast and will soon catch up wit [Read More]
Posted by franklyn45 | 09/14/09 08:47 AM EDT
Amway is a very good company and being an Amway
Business Owner is a very rewarding experience. It is not
easy, but running a business of any kind, either
conventional or direct sales, requires commi [Read More]
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Posted by jeffrey7500 | 09/01/09 12:35 AM EDT
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