China has grown into Amway's number one market
Updated: 2013-09-23 11:34
By Chris Davis (China Daily)
A few decades ago, when "going global" was the new business mantra, Amway saw that if it wanted to be in commerce in another country, it really had to be in commerce around the world. They went outside the US, where most sales were, to now where they do 90 percent of their business outside the US in more than 100 countries and territories on every continent but Antarctica. Amway has 21,000 employees and more than 3 million distributors who make Amway's products - mainly cosmetics, nutritional supplements, and home goods - available to over 70 percent of the world's population.
According to Amway Chairman Steve Van Andel, China has been a significant part of that growth. Amway went into China in 1995. "When you look at the number of people in China, it made sense for us to move in there," Van Andel said. "We did and it grew and grew quickly. It has grown to our number one market in those years, so we're very happy in that regard."
Amway started with the idea that there are a lot of people out there who want to go into business for themselves, run their own business, be entrepreneurs, but not a lot of people have training. "Our business is one you can enter regardless of what your background is or what your training is," Van Andel said. "You can learn along the way, learn as you go."
Wherever they have taken the tiered - or "pyramid" - selling strategy, it has changed to adapt to local cultures and regulations, but the premise of being an entrepreneur is a premise that works everywhere, Van Andel said.
"It only makes sense that it fits into China," he said. "If you look at history, they're the merchants throughout Asia and throughout the world. I think that's the reason that we've grown so quickly."
Different products do better in some markets than in others. Amway's largest product in China is protein powder, which is relatively small in the US, attracting mostly the body-building crowd. "In China they look at protein powder as a source of protein for kids," Van Andel said, "because it's not as easy to get protein for kids in China."
Amway has an extensive training program in China. Learning how to sell, run a business, and present oneself to potential customers are essential to the direct-sell business model's success. Amway has just launched a video-game-based tool for younger recruits. "In the process of playing the game they're learning how to better operate their business," Van Andel said.
Among the root values imparted is integrity in relationships. Van Andel sums it up nicely: "People around the world appreciate having someone they can count on, especially if they are going to buy products from them."
Amway has a manufacturing facility in China and they are looking to add to it as part of a $400 million worldwide push to grow their sourcing units. In addition, they are looking at putting in botanical gardens in Wuxi, botanicals having become a big part of Amway's business.
"A lot of traditional Chinese medicine is used as the very basis for a number of our different products around the world," Van Andel explained. "So for us to build a botanical garden now in China to kind of harness some of that history and use some of that experience in China to use as a base for products around the world I think is a great thing to do."
Van Andel said he travels to China on a regular basis, usually trying to combine Amway business with some of his other duties as Chairman of the US Chamber of Commerce, a post which, incidentally, his father, Jay Van Andel, co-founder of Amway with Rich DeVos in 1959, served in as well.
"The first trip I ever took to China was when my dad was chairman of the chamber in the mid 70s," he said, remembering flying into Shanghai and seeing the farm fields that sprout 100-storey-high skyscrapers today.
He's had a chance to watch the dramatic change over the years. "It was right when China was on the verge of its whole shift to a market economy that's really what in my mind has changed China significantly from its long, long history to where it is today."
Was his father thinking Amway in China back then? "My dad pretty much had ideas about Amway everywhere," Van Andel said. "There was no place he ever traveled into where he didn't think the Amway business would work somehow.
"It was mostly because he just looked at people and he said: 'You know a lot of people want the opportunity to do something for themselves.' And that's what the Amway business has to offer."
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(China Daily USA 09/23/2013 page2)