The Amway way

On a trip to the Gobi desert in northwestern China, Rob Gifford, a National Public Radio reporter, came across a group of Amway sales people. He was impressed at how they expressed their desire to "Live" by selling Amway breath refresher spray, just as preachers talk about religion.

The group that Gifford met, however, is only a small fraction of the US-based company's massive sales team in China. The scene was not rare either. Many Chinese have similar experiences: you are standing in front of a supermarket or on the way home after work, and you are approached by a middle-aged man or woman who will first praise your dress and then give suggestions about skincare or nutrition.

"We can make your life better, we want to have a chance to serve you!" they typically exhort.

The leader of the over 180,000 Amway sales people in China is a 56-year-old lady from Hong Kong, Eva Cheng. Cheng does not carry the passionate, if not overly enthusiastic, trademark air of the company's sales people here.

The mother of three is always well dressed, with light makeup, and often wears a pearl necklace or earrings when she meets the press. Unlike her passionate sales people, she speaks Mandarin carefully and slowly, with a gentle Hong Kong accent.

Cheng set up the Amway office on the mainland in 1995. Now, the market in China contributes to nearly a quarter of its global sales. The company's sales in China reached 13.8 billion yuan by the end of 2007. Cheng says the number will increase by 20 percent this year, and she aims to reach 24 billion yuan by 2012.

Cheng said her favorite image is a floating duck. "People typically think that ducks are at ease, floating gracefully, but underwater it is swimming ahead with its all force." Given the ups and downs that the company has gone through, that metaphor also works well in describing the way she manages her business here.

Cheng joined Amway in Hong Kong in 1977, when she quit her first job with the local government. She said she saw her entire future life working in the government, but when she saw a full page Amway advertisement asking for a secretary she decided to give it a try. She stayed because the small company could offer more opportunities, including training in the US, and her salary was 10 percent higher than as a government bureaucrat.

The company only had five staff back then and the diligent, hard working Cheng was promoted to be the head of the Hong Kong office two years later.

She visited the mainland in 1988 to study the market here. After several trips to Guangzhou, Cheng said she was impressed at how the people were eager to get rich and improve their lives and persuaded her boss in the US to enter the market.

What originally attracted Cheng to bringing Amway to the mainland turned to be a double edged sword in the coming years. It was true that many people wanted to get rich in a short time. But things can go wrong when people want to make money desperately.

Direct selling was a new concept in China at that time. The model quickly became popular because it offers common people a chance to be self-employed with little start-up money. Amway's business soared, the scale of its sales team expanded quickly and its sales reached 900 million yuan within the first year.

But the government banned all forms of direct sales in April 1998, as pyramid schemes flourished throughout the country. At that time millions of people, including many university students, got embroiled in criminal activities carried out under the guise of direct sales.

The ban literally meant that the Amway business was illegal. By that time, Amway had invested over 100 million yuan and had over 1,000 employees and more than 60,000 direct sellers in the country.

Cheng, like the image of duck that she likes, appeared to be at ease but acted quickly. She recalls now that she was surprised and scared, but she smiled and asked her colleagues to calm down.

She met with her top managers and wrote a 1,000 word press release overnight to show Amway's understanding of the government's decision.

She also continued to talk with the government, trying to prove that Amway was a responsible enterprise making money legally.

"We concentrated all our strength to communicate, so that the Chinese government would give us a chance to continue to develop in China," she said in a later interview.

The government later allowed 10 foreign companies to carry out direct sales, using the retail stores plus direct sellers model. That makes Amway's business in China different from anywhere else. In other countries, the biggest advantage of the direct sales model is its low cost. The branding is mainly built through door-to-door selling by direct sellers, not through stores or advertisements.

Cheng began the tough task of transforming Amway's huge sales team as the government required and set up stores in China. In addition, it spent big bucks on advertisements. Amway posters were seen in subways and airports, and on buses. It also asked China's top athletes, including the former diving supersar Tian Liang, and the 110-meter hurdler Liu Xiang, to endorse Amway products.

Amway also tried to build its brand image through large-scale corporate social responsibility programs. Type in "Amway" in China's most popular search engine, Baidu, or in Chinese Google, and most of the results are about its charitable activities.

Cheng says these measures were also to give sellers confidence and to let people know that it is a good company. "We can earn back what we spent in advertising from the increased sales volume," she says.

The busy schedule of a CEO has not stopped her from being a loving mother and a wife. She says she tries to let her husband and kids understand what she is doing and to be proud of her work.

She takes the family to company events when possible because "they would feel they were participating, and know that I was not doing meaningless things when I wasn't at home."

She also got her children involved in her work. "I was not this eloquent 20 years ago," she says, but when she prepared for public speaking, a must for a CEO of a direct sales company, she asked her three sons to sit and listen to her practice.

"They would say: 'you were not smooth in 12 places in today's speech' or 'nobody around me laughed when you told the joke just now,'" she says.

Cheng says her family's support did not come naturally, but through her own hard work.

"I think I need to let them accept the fact that I need to work, therefore I can't control my time freely." However, on special occasions such as birthdays or anniversaries, "a women needs to play her role well".

(China Daily 12/08/2008 page12)