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Amway Forever: The Amazing Story of a Global Business Phenomenon by Kathryn A. Jones

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Paving the Way for Direct Sellers

Entering the Chinese market, however, proved to be much more difficult than simply sponsoring new distributors and tapping into entrepreneurial hopes. The Communist government was opening the country to global markets and foreign investment, but it was moving slowly and cautiously. The transition from a planned to a market economy had its share of bumps, and China’s new Open Door Policy still imposed stringent business regulations. Moreover, Chinese officials were very distrustful of direct selling after hundreds of pyramid schemes had defrauded people of their savings. Direct sellers all were called the chuan xiao—which included pyramid schemes—so shady operators and legitimate multilevel marketers got painted with the same brush. “The rampage and chaos caused by pyramidal frauds past and present have left too big and too deep a scar in the country,” Cheng observed.5 Other business hurdles also loomed. The government would not allow Amway to import its products, so the company built a modern automated factory in Guangzhou, a major foreign trade port with a development zone. (Interestingly, with its new manufacturing plant, Amway had come full circle in its history since Carl Rehnborg, Nutrilite’s founder, had studied the health effects of nutrition and diet there.)6 Amway China opened for business in April 1995, first marketing cleaners—L.O.C. multipurpose cleaner, SA8 laundry detergent, Dish Drops dishwashing liquid, Zoom spray cleaner concentrate, ...

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