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Saturday, August 28, 2021

China highlights Amway China: a decade that cannot be copied

China highlights Amway China: a decade that cannot be copied [our reporter Xiong Junhui and Zhang Lei from the Pearl River Delta News Center] what kind of road will the "American way" become in China? Do American cowboys adapt to China's country roads? Amway has been in China for ten years. Some people suspect it as an "economic cult", while others praise it as "the most appreciated foreign enterprise". Satan or angel? Along the way, Amway has created a direct selling road that no one can copy so far. In April 1995, Amway (China) officially announced its entry into China, with a total investment of US $220 million and a registered capital of US $120 million. At that time, Amway was still a "stunned guy", and plunged into the arms of Chinese girls against the irresistible huge market charm. Three years ago, Amway (China) actually invested and built factories in China. Amway products born through the global factory system extend from China's prosperous coastal cities of Guangzhou and Shenzhen to the vast inland. The road to China affects the world for 10 years, which can not only enable a couple to enter the "tin wedding", but also a phased period for any enterprise. Industry insiders commented that Amway's traditional direct selling actually relies more and more on emerging markets such as China. "Amway has gradually put its fulcrum and base in China.". Therefore, how to develop in China has affected Amway's global industrial development layout. On the road to China, Amway has achieved fruitful results. So far, Amway has the foundation that a multinational company should have after entering China for 10 years. From the perspective of market layout, Amway (China) is headquartered in Guangzhou and has regional offices in Beijing and Shanghai, with a total office area of more than 10000 square meters. Amway (China) has built a modern production base with advanced equipment in Guangzhou Economic and Technological Development Zone, with a total area of 141000 square meters, second only to the headquarters factory in the United States. In terms of changing the operation mode, in July 1998, with the approval of relevant state departments, Amway (China) transformed its operation in the way of "store sales and hired salesmen". Since then, Amway (China) has provided consumers with high-quality products and services through more than 110 stores and 90000 active marketing personnel all over the country. In December 2003, Amway (China) was awarded the "national advanced unit for after-sales service of famous and high-quality products". In addition, Amway passed one quality review after another, demonstrating its determination to take the road to China: Amway (China) factory successfully passed the GMP review of Chinese health food, and obtained the ISO9001:2000 quality management system and iso14001:1996 environmental management system certification issued by American safety testing laboratory company (UL). From 1996 to 2002, The company has won the title of "foreign invested advanced technology enterprise" for three times. In addition, Amway performs well in tax payment and public welfare. Growing in the cold wind and rain, the heavy "fruit" is harvested in the bag, and the pain is also naked. The American direct selling enterprises represented by Amway have just collided with a painful changing order in the past 10 years. Because of the particularity of marketing methods, Amway has experienced countless "cold storms" in the direct selling industry in China: just entering the Chinese market for half a year, a "storm" in the direct selling industry forced Amway to stop absorbing new marketing personnel, and the loss of a large number of personnel has seriously damaged its perfect sales network. Three years later, some marketers in Shanghai, Guangzhou and other places used the "unconditional return" system to recycle empty bottles of products from consumers and ask for return, resulting in a loss of nearly one million yuan per month for Amway (China). In 1998, the government imposed a ban on pyramid schemes, requiring all companies selling through pyramid schemes in China to suspend business for rectification. Amway (China) was forced to close down. Subsequently, a new round of return storm arose. At this time, Amway (China) lost 20-30 million yuan per month, and its annual turnover decreased from 1.5 billion yuan to 300 million yuan. Amway seems to have reached the bottom of the valley, and the original decision seems to have become a chicken rib. After the ban, on June 18, the Ministry of foreign trade and economic cooperation, the State Administration for Industry and commerce, and the former Bureau of domestic trade jointly issued the notice on issues related to the sales methods of foreign-invested MLM enterprises. In July, Amway (China), as a transformation scheme, was approved to operate in the mode of "store + hired salesman". However, good things are difficult. Amway (China) also experienced several large-scale rectification activities from 2002 to 2005. These blows have taught thousands of Amway China: "China is changing from a unitary society to a mobile and diversified society. In the era of rising China, if you want to share all the benefits it brings, Amway's management philosophy needs to seriously face the impact of a free enterprise society, adapt to the soil and abide by the rules of the game here. " Phoenix waits for nirvana. In the late 1970s, Amway competed with the U.S. federal government over legality and illegality, which may still be fresh in the memory of people in the direct selling industry. This is regarded as a classic event in the direct selling industry (1975-1979), which basically defines the legal boundary of direct selling business, not only standardizes the business behavior of direct selling companies, but also standardizes the relationship between the government and enterprises. More than 20 years after this milestone in the direct selling industry, Amway will also face a new baptism in China. At the end of 2004, China's direct selling legislation was approaching the so-called year limit. Compared with the experience in the United States in those years, Steve wenanluo, chairman of Amway's global board of directors, judged that China also had the ideological conditions to understand the business society of this conflict. " After the storm, there is a rainbow. Living up to the expectations of Steve wenanluo, a good news came from Beijing recently: the long-awaited direct selling bill was deliberated and adopted by the State Council. It was officially deliberated and adopted by the State Council at the beginning of this month and is expected to be officially promulgated in January. It is understood that since the end of last year, there has been a lot of news about the upcoming introduction of China's direct selling legislation. However, until August 10, the executive meeting of the State Council had considered and approved in principle the regulations on the administration of direct selling (Draft) and the regulations on the prohibition of pyramid selling (Draft), but did not publish the specific contents of the two draft regulations. According to sources, the two draft regulations will need to be returned to the Ministry of Commerce and the State Administration for Industry and Commerce for fine-tuning for at least one month, and then officially promulgated. At present, Amway has stepped up its stores all over the country, with a total of more than 160 stores in China, including 10 stores in Shanghai. I believe Amway will be more persistent in opening 40 new stores in China in 2005. Industry insiders predict that this good news will undoubtedly make Amway's development in China more stable. "Like a phoenix waiting for nirvana, Amway will take the opportunity to adjust its business and carry out a new round of development." A media commented on Amway China's ten-year version: "it focuses on the dramatic breadth and controversial depth of direct selling in China. In short, direct selling, as a business model originated in the United States, has condensed too many practical combinations and imagination in China's diffusion and communication, which even obscures its origin. " Over the past ten years, foreign direct selling companies have mobilized China's profound utilitarianism after entering China. In fact, the reverse is also true. Just as Amway's image has evolved since its entry into China: a smart company good at government public relations and good at walking between policies; A company that makes a lot of money in China's controversial industry... No matter what role, it shows that the utilitarian side of business culture has been brought into full play. This is Amway's "business culture" that can not be replicated in China, and it is also a major reason for Amway to obtain unimaginable benefits from other similar multinational companies. Amway Feiyang Pengcheng Amway, who knows the way of layout, naturally will not ignore Shenzhen, a coastal special economic zone separated by a river from Hong Kong. Amway Shenzhen Branch officially opened on the first floor of Jinyuan Building, Wenjindu, Luohu District ten years ago. With the development and growth of the company's business, the company moved to the first floor of Shenzhen Hong Kong Haoyuan, No. 2078, Bao'an South Road, Luohu District, on March 30 last year, with a business area of 2368 square meters. On November 8 of the same year, the second store in Shenzhen, Nanshan store, was opened in Shuntian building, No. 62, guimiao Road, Nanshan District, With a business area of 950 square meters, it has become one of the few cities with two Amway stores in China, which has played a good leading and exemplary role in the development of Amway in China. The maturity and stability of Amway China in Shenzhen market depends on the guarantee of good reputation. The company has successively won the titles of Shenzhen Quality and reputation assurance enterprise, China Quality and integrity management enterprise brand, Shenzhen top 100 large enterprises with comprehensive strength, and Shenzhen large taxpayer (value-added tax) in 2002 and 2003. At the same time, it won the favorite brand of Shenzhen citizens and the honest enterprise in the hearts of millions of citizens for two consecutive years in 2003 and 2004. In August 2005, it won the honorary title of "the most respected (most influential) enterprise in Shenzhen". The most valuable thing is that Amway Shenzhen Branch is enthusiastic about public welfare undertakings and has exclusively sponsored the "Shenzhen Hong Kong Children's calligraphy and painting exhibition" for three consecutive years; In December 2004, the "Amway night - launching ceremony of Shenzhen Red Cross medical assistance fund" was jointly held with Shenzhen Red Cross Society, becoming the first unit to donate 100000 yuan to the fund. In July this year, it sponsored the "hand in hand, heart to heart" activity held by Nanshan District Women's Federation, and organized 71 Party member families to recognize "relatives" and care for 71 poor children in Jinggangshan; In 2004 and 2005, more than 100 films were organized to enter the community, making Amway's image of health and public welfare deeper into the hearts of Shenzhen citizens. Amway, the "Huangpu Military Academy" of China's direct selling industry, may not be an absolute leader in China's short history of direct selling, but Amway deserves the reputation of "Huangpu Military Academy": Amway has long been recognized as an enterprise poacher. Even in Hong Kong, the elite of the business community, they also take the "Amway experience" as an enterprise training case; Through "talent digging", Chinese local direct selling enterprises that grew up later are constantly copying Amway's experience, but so far there is no real "Amway". The Chinese version of Amway focuses on the adaptability of an international direct selling company to different market systems. This once revised the basic definition of direct selling. Because of China's environment, direct selling had a store system for the first time. In the final analysis, Amway is an American direct selling enterprise in China. Tracing back to the most classic enterprise means in Western professional society is the indoctrination of employees' values. Everyone knows everything from managers in office suits to blue collar workers in factories. This value is spreading to other emerging business societies through MBA. Amway's unique place is that she has faced the wider social masses with the indoctrination of this value system. In order to obtain individual entrepreneurial opportunities and people affected by the direct selling incentive mechanism, a large-scale commercial spontaneous organization has been formed around Amway. Commerce and civilization are always interdependent. In a transitional country like China, quite different principles are involved. For the entry of heterogeneous commerce represented by direct selling, China's emerging business society needs the correction of modern civilization. Drucker, who is respected as a master of management, said, "unless there is a major disaster, nothing can make the vast majority of Americans give up their faith in the economic system based on free enterprise.". Amway's belief won. Amway's experience in using political and economic means finally made its free enterprise system operate normally in China. This experience that cannot be replicated is also the essence of the concept of "Huangpu Military Academy". Zheng Li Jinfen, chairman of Amway China, explained to the media the logic between direct selling and China's development: "fraud will occur in any market. Fraud and honesty should not be entangled with the quality of the Chinese people. Don't be so pessimistic. Most Chinese people practice benevolence, righteousness, reason, wisdom and faith. We can't use the behavior of a small number of Chinese people to explain that the introduction of direct sales will be a problem[ Announcement] the resources of this website are welcome to be shared by the whole society. Please indicate the source of the article when reprinting; The posting of this article on this website does not mean that we agree with its statement and description. It is only to provide more information and does not constitute any investment suggestions; If the article reproduced on this site infringes upon the author, please notify in time and we will correct it immediately.

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