12/4/2009                                                           Amway's China Redux - Forbes.com
12/4/2009                                                        Amway's China Redux - Forbes.com
  China's department sto...
12/4/2009                                                      Amway's China Redux - Forbes.com
  "During that period Amwa...
12/4/2009                                                                     Amway's China Redux - Forbes.com
12/4/2009                                                                        Amway's China Redux - Forbes.com
    Dow ...
Upcoming SlideShare
Loading in …5



Published on

Amway China - Worlds best Amway market.

  • Be the first to comment


  1. 1. 12/4/2009 Amway's China Redux - Forbes.com Become a member | Log In Portfolio | Forbes Magazine - just $1.15/issue Home Page for the World's Business Leaders Free Trial Issue A D V E R TI S E ME N T Search Stock Quote U.S. EUROPE ASIA HOME BUSINESS TECH MARKETS ENTREPRENEURS LEADERSHIP PERSONAL FINANCE FORBESLIFE LISTS OPINIONS Video ForbesWom an CEO Netw ork Org Chart Wiki Mobile Portfolio Tracker Blogs E-m ail New sletters Special Reports ADVERTISEMENT 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 Not a member yet? Join Now! Already a member? Log In Enter Username Enter Email Select Your Title Receive Special Offers? FAQ |Terms & Conditions | Privacy Policy ADVERTISEMENTS Solar Stock Pick - EVSO Emerging Green Energy Co. Growth Stock Investment w w w .EvolutionSolar.com Now Hiring: $95/Hour Fortune 500 Company: Make $5,000/Month Working From Home ConsumerStandardNow .com Learning experience: ''People were suspicious of us,'' says Audie Wong, president of Amway China. Business On Main Free Online Tools & Resources To Help Start Or Grow Your Business! w w w .BusinessOnMain.com 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 held Amway doesn't release net figures after subtracting for 1. The Richest People In America | Story 2. The World's 100 Most Powerful Women | Story commissions and cost of goods.) The company is projecting a 3. E*Trade's Long Goodbye | Story similar increase in 2009 and is investing $15 million in a new 4. How Apple And IPhone Blew It In China | Story factory in Guangzhou. 5. Inside An American Billionaire's Castle | Video Success is fueling the daydreams 6. The World's Billionaires | Story Article Controls of many like Kong, who usually 7. NBA's Bad Bounces | Video EMAIL learn about Amway from friends, 8. Innovative Growth Strategies | Video PRINT family and co-workers breathlessly 9. Atlantic Records' Main Woman | Video REPRINT 10. Marvelous Marvell | Video pushing the company's 200 products. No matter that these NEWSLETTER wares often are priced significantly COMMENTS (2) higher than similar products in SHARE forbes.com/…/companies-sales-amway-… 1/5
  2. 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." Featured Content Bowling for a Bounty Amway's China Redux The Philippines' 40 Richest Complete Contents Other Publications Forbes Magazine ForbesLife Magazine "When we came to China, Rate This Story 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. 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." forbes.com/…/companies-sales-amway-… 3/5
  4. 4. 12/4/2009 Amway's China Redux - Forbes.com ADVERTISEMENTS Now Hiring: $95/Hour Fortune 500 Company: Make $5,000/Month Working From Home ConsumerStandardNow .com Solar Stock Pick - EVSO Emerging Green Energy Co. Growth Stock Investment w w w .EvolutionSolar.com Business On Main Free Online Tools & Resources To Help Start Or Grow Your Business! w w w .BusinessOnMain.com Buy a link here 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] Tags: www.jsmith52.qhealth​beauty.com Posted by jeffrey7500 | 09/01/09 12:35 AM EDT Post a Comment Intelligent Investing | Data | Knowledge | Insight | Wisdom Today On Forbes.com The Coming Jobs Inflection Point Joshua Zumbrun The rate of job losses is slow ing, but Obama w ill need some creative ideas to spark robust job creation. Second Take On Job Creation How Not To Increase Employment The Most Recession-Proof Jobs Year-End Tax Retailers: Embrace Why Biologics Estonia Inches Guide 2009 Web 3.0 Remain Expensive Tow ard Euro Area Subscriptions Subscribe To Newsletters Subscriber Customer Service ADVERTISEMENT SITEMAP HELP CONTACT US INVESTMENT NEWSLETTERS FORBES CONFERENCES FORBES MAGAZINES A d Inf or mation For bes .c om Mobile RSS Repr ints /Per mis s ions Subs c r iber Ser v ic es Pr iv ac y Statement Ter ms , Conditions and Notic es 2009 For bes .c om LLC™ A ll Rights Res er v ed forbes.com/…/companies-sales-amway-… 4/5
  5. 5. 12/4/2009 Amway's China Redux - Forbes.com Dow Jones industrial average, Nasdaq composite and S&P 500 indexes are real time and are powered by Xignite. All other indexes and commodities are delayed at least 15 minutes. All pricing is automatically refreshed every five seconds for the first two minutes the page is open, refreshed every 10 seconds for the third minute the page is open, and refreshed every 15 seconds thereafter. forbes.com/…/companies-sales-amway-… 5/5