Growth of an Industry
In 2006, after heavy lobbying from Amway and other American companies, China lifted its direct-selling ban. Direct selling since has grown into an $8 billion industry, with companies such as Mary Kay, Avon, Herbalife, and other direct sellers operating in China.
Avon, for example, was granted a direct-selling license by China’s Ministry of Commerce in late February 2006. That year, Amway’s Chinese business exploded. Revenues shot to more than $1.5 billion and Amway ranked number 41 on the Ministry of Commerce’s Largest Foreign Invested Companies. The company was on the list of Fortune China’s Most Admired Multi-National Companies four times and on China Business News Network’s List of top 10 Most Influential Multinationals. Sales in China kept growing—to $2.5 billion in 2008 and $3 billion in 2009.
Amway’s best-selling products in China are Nutrilite protein powder, which can be added to soups and juices, and Artistry skin creams and cosmetics. National Public Radio correspondent Rob Gifford discovered just how far Amway had spread throughout the country when he was on assignment in the Gobi Desert. Two men in suits and ties approached him in the city of Zhangye and identified themselves as the local representatives of “An Li,” Chinese for “Amway.” One of the men told Gifford that he previously had worked in a factory. The other one said he had been employed in the office of a state-owned railroad. Their mentor, they said, had been with Amway for three years ...