A healthy formula for success

By integrating traditional Chinese medicine, technology and its unique direct-selling-only approach, Amway has become a force to be reckoned within China

To Gan Chee Eng, president of Amway Greater China, it is without doubt the company’s unique “people” element that has turned it into one of the most influential direct-selling enterprises in Chinese market.

In contrast to most traditional companies, Amway’s customers can only purchase products directly from the sales representatives, who Gan considers to be the backbone of the organization.

According to him, this unique business strategy has fostered an entrepreneurial spirit among the sales representatives, who are in turn more motivated to support one another and help the company grow.

“The biggest asset of this company is our people. Our sales representatives may come from different backgrounds and places but they all have the same ambition — to sell our high-quality products directly to the right person,” said Gan, who was born in Malaysia and has worked all over Asia for Amway since he joined the group more than 20 years ago.

As a veteran in the company, Gan has witnessed Amway’s first plant being constructed in Guangzhou, Guangdong province in 1993 as well as the recent launch of the Amway Botanical Research Center (ABRC) in Wuxi, Jiangsu province. He has also played a big role in expanding the staff numbers to the current strength of 60,000 sales representatives in China and the company is planning to double this figure within the next two decades.

Launched in 1959 in the United States, Amway first sold organic liquid cleaners, which were the world’s first concentrated, biodegradable and environmentally friendly alternative. The company has since expanded its product line to cover the health and beauty sectors as well.

Amway has viewed China as an important revenue source as well as an ideal location to expand its new research and development efforts. Amway China is the largest affiliate of Amway Corporation, with sales figures hitting a new record of more than 29 billion yuan ($4.59 billion) in 2013.

Confident that their business in China will continue to grow, Amway China plans to increase its investments and expand its manufacturing and research facilities. Amway has now placed a major emphasis on technology to help grow the business, with the recent launch of an online social networking platform and mobile applications in August forming part of the plan to go beyond its existing offline direct selling market.

With this new mode of sales, representatives can purchase products through these online platforms and the company will take on the responsibility of delivering the goods to the consumers. To enhance the experience, Amway has set up 10 experience stores nationwide, and there are another eight in the pipeline.

“We have to catch up with the times and allow sales representatives to apply the advancements in Internet technology to create a more transparent sales platform,” said Gan.

Through the years, Amway has also used cutting-edge research technologies to combine the benefits of traditional Chinese medicine (TCM) with a wide range of their products, such as Nutrilite, the core health food brand of Amway.

Gan said that Nutrilite, which is popular with the Chinese consumers, was originally inspired by TCM. Its products are a combination of plant nutrients.

“It’s time for Amway’s Nutrilite to go home (to China) — to explore the essence of TCM and combine it with technology to create more advanced high quality nutrition, beauty and home products for consumers,” said Gan.

In 2012, Amway announced that it would be setting aside an investment of 600 million yuan to expand its production site in Guangzhou, and establish the ABRC in Wuxi. Built on a 34-hectare farmland, the $25 million ABRC includes a laboratory and greenhouse, and will be used to conduct research on soil nutrients, plant physiology, extract quality standards and processes in its health and beauty products.

The recent opening of the ABRC completes a five-year process to develop the site. For three years, Amway examined numerous locations in an effort to find optimal growing conditions that could match the high standards at the company’s certified organic farms in Brazil, Mexico and the US.

“The center will serve as a site for agricultural research on plants used in TCM. The goal is to come up with a specialized overall solution to meet the health concerns of local consumers,” said Gan.

Gan revealed that Amway is also aiming to provide tailor-made nutrition and health care services for different types of consumers in the future.

“In order to fit the growing scale of consumers who have a variety of requirements, we will change our business model from selling a single item to particular groups to offering a holistic health solution for consumers to experience,” said Gan.