Retailing, Franchising, and Consumerism Business Intelligence in China

Amway China Starts New Measures For Transition Period

After winning a direct sales license in China in December last year, Amway China has been working on ways to push forward its direct selling service through various measures including its latest provisions arrangement.

According to the company's latest plan, which local media says is called "Arrangement on Advancing the New Marketing Pattern during the Transition Period", Amway will largely expand its direct selling channels of sale representatives and authorized service sites and in the meantime keep its existing direct selling stores, marketing personnel and dealers in order to coordinate with the company's new marketing pattern following the obtaining of the direct selling license.

In addition, starting in April, Amway China resumed its work on receiving dealership applications, which was halted last year right before it received the direct selling license.

Though this new arrangement for the transition period will increase the company's management cost, Amway China believes it can help the company level off its sales team and boost its stable increase in China market when it is duly carried out.

Restricted by the real situation of China's direct selling industry, Amway China's sales in 2006 was about RMB12 billion, which was a decrease of RMB3 billion over the previous year. Amway estimates that its performance in China market will grow this year following the implementation of the direct selling license.

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