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Home >> Business
UPDATED: 08:49, March 15, 2006
Amway China set to lose cash
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US-based direct seller Amway will probably see a lower sales revenue in China this year as it is still restructuring its sales network to comply with new regulations on direct selling.

Senior company officials said yesterday the firm still had to make some slight changes to keep in line with the rules which took effect in December last year.

Those rules say direct selling must adopt a single-level billing system instead of the previous team-billing scheme.

"We have made a lot of effort to restructure our business model, but it needs some slight changes," said Gan Chee Eng, vice-president for Amway China.

"Sales in this fiscal year (from September 2005 to August 2006), may be lower than in the previous year, but any business decline will be within our expectations," Gan said.

Amway operates in more than 80 countries and territories, selling a range of items including nutritional supplements, cosmetics and cleaning products.

Direct selling was banned in China in 1998 as many people found it hard to differentiate between it and pyramid schemes. But the government was committed to re-introducing a form of direct selling after it joined the World Trade Organization in 2001.

Gan said Amway is talking to authorized agents to ensure the firm's new business model will protect their interests as well as meet legal requirements.

"It will be settled soon and we will register it with the government," he said. He was speaking at a press conference where it was announced that the 100 millionth bottle of the firm's locally produced three major home care products came off the production line yesterday.

Gan said the company was not rushing to get a direct selling licence, but was trying to ensure the business adjustment was successful.

Source: China Daily

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