Rebirth of a sales firm

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“I AMWAY you this song!” So declared Tan Weiwei, a Chinese pop artist, during a performance in Shanghai on August 14th. Hers was the closing act in a gala celebration thrown by America’s Amway, the world’s largest direct-sales company, for its top sales representatives in China. When she used that odd expression, which in China is a way to say “strongly recommend”, the crowd of 11,000 diehards gathered in the stadium and another 1.5m Amway staff, distributors and customers watching via webcast went wild.

That Amway’s Mandarin name (“An Li”) has become a meme shows the strength of its comeback in China. It entered two decades ago, using its model of multi-level marketing (MLM), which rewards salesmen not only for selling products but also for sales made by people they recruit. After a run of pyramid scams—unrelated to Amway—led to a public backlash, in 1998 the Chinese government banned all direct sellers and its sales dwindled to nearly nothing. Now, however, the mainland is Amway’s biggest market. Its annual sales there, of products such as toothpaste and make-up, have exceeded $4 billion in recent years. How did it do…Continue reading