Amway invests more

Direct selling company Amway plans to expand in China despite the worsening global economy.

The US-based company will expand its production facility in Guangdong province this year and will spend $15 million developing new household products in China in 2009, said Doug DeVos, Amway president, during his visit to China last December.

Amway also recently rolled out its new advertising campaign - "Lighting up 2009" - which features China's gymnastics, television hostess Xu Gehui, fashion designer Ma Yanli and ballerina Hou Honglan.

Teaming up with domestic celebrities helped Amway sell more of its dietary supplements and cosmetics but also meant putting a lot more money into advertising.

"We spent a lot more on branding in China this year than we did in 2008," said Gan Chee Eng, president of Amway's Chinese operations.

China has become a key market for the company, accounting for nearly a quarter of its total sales.

Amway China's sales were 17 billion last year, a 28 percent year-on-year increase (compared to an 11 percent year-on-year growth in Amway's global sales).

The 50-year-old company's global revenue topped a record $8.2 billion last year. DeVos and Amway Chairman Steve Van Andel credited the high figure to strong gains in China, India and Russia.

The company invested $220 million on its China operations last year, said DeVos.

Eva Cheng, Amway's executive vice-president, said at the end of last year that she aims to increase Amway's revenue in China to reach 24 billion yuan by 2012.

"The direct selling sector differs from others in that it is largely dependent on the passion and enthusiasm of individual sellers," said Sun Yuben, professor majoring in marketing and retailing of Capital University of Economics and Business.

Amway is trying to keep that enthusiasm high by sending 17,000 of its employees on a cruise trip to Taiwan.

Sun said the direct selling industry could prove resilient in global economic downturn and may even achieve growth in the adverse market situation.

Eng, the president of Amway's Chinese operations, said the number of direct sellers working for the company increased during the last few months but would not reveal the exact figure.

(China Daily 03/23/2009 page9)