After nearly 30 years of entering the Chinese market, the multinational company Amway has not only established a wide brand reputation in China, but even the proper noun "Amway" itself has been extended to the new meaning of "highly recommended" and "sincere sharing" in the daily language of Chinese people.
In 1995, Amway (China) officially started its journey to deepen its cultivation in China. At that time, foreign enterprises representing new technologies, new ideas and new models enjoyed the dividends of China's rapid economic growth, and Amway, which featured its direct sales model, took only 8 years to make China the world's largest market for this multinational consumer goods company, and Amway China, which continued to grow, reached a stage high of 29.3 billion yuan in annual sales in 2013.
Under the influence of factors such as Internet e-commerce, overseas cross-border purchases, and the rise of local brands, Amway China's performance has continued to decline since 2014, and has experienced a period of consolidation for up to 7 years. Since then, Yu Fang, President of Amway (China), has put forward a set of systematic strategies for the transformation of big health, relying on strategic patience and effective implementation to promote Amway China back to the growth track in 2021.
The story of Amway China is the story of a long-established foreign company in China that has a "second spring", and it is also a successful example of a global leading enterprise "In China, For China". Not only the volume of performance, but also the transformation of Amway China, China has become Amway's global strategic innovation center and model leading center, and Amway's "flower of a better life" is blooming.
"New species" encounter new problems
As a benchmark enterprise in the global direct selling industry, Amway was born in the United States in the 50s of the last century. At that time, the distribution channels of consumer goods in the United States were largely dominated by retail giants, and Amway started a unique business model of direct selling through marketers selling home care products directly at home and workplace.
Amway's involvement in the Chinese market can be traced back to 1992, unlike the direct import products sold in China by foreign companies at that time, Amway (China) spent nearly three years investing in the construction of a production base in Guangzhou, and officially opened in 1995, which also laid the foundation for long-term operation in China.
Amway Guangzhou production base
According to the definition proposed by the World Federation of Direct Selling Associations, direct selling generally refers to "the direct marketing of products outside of the consumer's or other people's homes, workplaces, or other non-store retail premises." It is usually up to the marketer to give a detailed description or demonstration of the product on the spot. "In China in the 90s of the last century, brands originating from developed countries were widely popular in China, and Amway's direct sales model was a "new species" in the Chinese market.
Compared with the United States, which has a lower population density, China's communities are densely populated, catalyzed by the wave of market economy, more and more people want to have their own careers, and more importantly, the growing demand for healthy and high-quality products from the expanding middle and high-income groups has also increased, and Amway, which features direct sales, has achieved sustained and rapid growth in China for nearly 20 years.
In response to the characteristics and policy requirements of the Chinese market, Amway, a direct selling company, established a direct-sale store and placed advertisements in mass media, which was unprecedented in Amway's "hometown" of the United States, and even led Amway's global innovation. Fu Mingxia and Liu Xiang endorsed "Amway Nutrilite" has become synonymous with high-end health products in the minds of Chinese people, with the strong boost of Nutrilite series of nutritional and health foods, ARTISTRY series of beauty cosmetics, Amway's annual sales in China in 2003 have climbed to 1 billion US dollars, and continue to grow until 2013.
Amway China Plant R&D Center
Around 2013, catalyzed by the mobile Internet, Internet e-commerce, cross-border e-commerce, social e-commerce, and "new retail" have appeared one after another, from channels to models, from consumer behavior to consumer mentality, the great changes in the Chinese market have brought a lot of challenges to Amway China, and Amway China has also reached a stage high of 29.3 billion yuan in 2013 after a decline in sales.
"The market is full of uncertainties, and Amway began to enter a period of consolidation in 2013 and 2014. The rise of micro-businesses and social e-commerce in the mobile Internet ecosystem brought about by digital technology has had a great impact on the traditional entrepreneurial opportunities we provide, many overseas health foods have come in relying on cross-border e-commerce, and market competition brought about by the rise of local brands", said Yu Fang, President of Amway (China), "The entire industry has been affected and impacted, and we have entered a seven-year period of consolidation, and our performance has been declining. ”
From "Amway China's Question" to strategic patience
From the tortuous consolidation period to the steady growth track in the past three years, Amway China has also experienced various trial and error, but this twist and turn has also made Amway China re-examine its "original intention" and promote transformation in the established direction.
Recalling this experience, Yu Fang, who was promoted to President of Amway (China) in 2018, still remembers it vividly. "In 2018, Amway China also saw some market opportunities, and at the same time, it was also thinking about whether to follow the market trend and chase the trend, or to re-examine ourselves - who are we and what do we want to do?"
Yu Fang, President of Amway (China).
In the context of the macro policy of "Healthy China", Amway China officially announced its new strategy at the beginning of 2021: as a leading enterprise in the nutrition and health industry, Amway will firmly seize the strategic opportunity of "Healthy China" construction, give full play to its advantages in products, brands, R&D and services, focus on the big health track, and become a leader in the big health industry led by entrepreneurs and providing consumers with holistic health solutions.
In Amway's view, with China's economic and social development, population aging, and the growth of the number and income of the middle class, more and more Chinese consumers have shifted their cognition from "treatment-centered" to "health-centered", focusing on big health is not only to provide nutritious and healthy products, but also to improve health awareness, provide health solutions, promote a healthy lifestyle and a series of measures and layouts.
At the same time, the "entrepreneur-led" concept of Amway's new strategy relies on the huge entrepreneurial group that Amway China has gathered and cultivated over the years, which is in line with Amway's values and is also a model of physical and mental health.
Yu Fang revealed that when Amway China decided to launch a big health transformation strategy, he had reported a set of designs and models to the Amway board of directors in detail, which was also recognized, but the performance did not improve significantly in the past six months.
"At that time, I mentioned the word 'strategic patience', it takes a while for marketers to Xi learn new capabilities, and it takes a while for strategy to work," Yu Fang said, "It took us a year to stop the decline, and by the end of 2021, Amway China had regained its long-awaited growth, and then 'strategic patience' became a word with a high rate of mention in Amway."
After the growth rate returned to positive in 2021, Amway China achieved a high growth rate of 16% in 2022 under a challenging environment, and in 2023, Amway China achieved a high growth of 6%. The success of this round of transformation also means that Amway has rediscovered its advantages in the new era.
How can old foreign companies in China glow with a "second spring"?
In recent years, China's consumer goods market and To C-end business model have continued to renovate, walking in the "tide" of the global market. In this context, Amway China has organically integrated its genes and endowments with the market environment in which it operates, and has successfully radiated the "second spring", which has also become a successful case of transformation and upgrading of foreign enterprises in China in the new era.
Amway China's proposal to focus on the big health track is not an abstract direction, but a complete set of system ecology that organically integrates corporate performance growth, personal health entrepreneurship, and public healthy life on the basis of repositioning the role of the enterprise.
In the early stage of entering the Chinese market, Amway China's competitiveness lies in the direct sales model and high-quality health products, and with the rapid development of China's economy and society, the connotation and extension of health continue to expand, and the public's awareness and demand for health have improved. From lifestyle to the whole ecology of the big health community, these fields are not only integrated with each other, but also promote each other, which condenses the synergy of Amway China in the big health track.
At the same time, in the implementation and implementation of the big health strategy, Amway China is based on the entrepreneur-led community model, which not only taps Amway's long-term inherent advantages, but also adapts to the current business environment in China. In the community model, entrepreneurs are not only users of Amway nutrition and health food, but also practitioners of healthy lifestyles and leaders of interest community activities.
Amway Beijing Experience Center
In this year's New Year's Eve speech, Luo Zhenyu summarized the healthy life and entrepreneurship model of Amway entrepreneurs with a couplet image: doing business, living a beautiful life, making friends, making money, and honoring.
Up to now, China has become Amway's largest market in the world for 20 consecutive years, and Amway has established a complete industrial chain in China from R&D, digitalization, production, logistics, experience to service, which has become the fulcrum for Amway to fulfill its enduring commitment of "In China, For China".
Combined with the successful experience of the previous strategic transformation and in line with the national strategic direction of satisfying the people's yearning for a better life, Amway China announced the launch of the strategic upgrade from "great health" to "better life", and the "flower of a better life" built by Amway covers eight value propositions, including physical health, active life, emotional health, good relationship, financial security, personal growth, social value, and green harmony, which are closely related to national development goals, social progress directions, and the pursuit of public well-being. As we grasp the new opportunities of Chinese modernization, Amway continues to be committed to "helping people live healthier and better lives".