Amway Corp is eyeing a major push in China's online retail sector, as the world's largest direct selling company in terms of sales looks for options to counter flagging revenues and attract more younger customers in the country.
The $10.8 billion direct selling business, based in Ada, Michigan, United States, announced its digital strategy on Sunday in Guangzhou, Guangdong province, and indicated its willingness to go beyond its existing offline direct selling market by launching an online social networking platform and mobile applications.
The company's sales representatives can purchase products through these platforms and the company will take the responsibility of delivering the goods to consumers.
Frances Yu, the company's chief marketing officer, said the household product giant has been testing the online method for a year in China, and online orders account for 30 percent of the overall sales in the country. Of this, mobile orders account for about 6 percent and the ratio could go up to more than 50 percent in a decade.
The company's online system includes 10 WeChat accounts and 12 apps that sales representatives can use to communicate with their consumers.
"Amway's strength lies in the solid offline relationship it has with customers. The same will be upgraded further when we move online," said Yu.
She said Amway's business is based on relations and social network. Therefore its mobile business and mobile studio are based on the network that is developed offline.
The direct seller said the mobile e-commerce system will also reduce costs for its direct selling representatives as they will no longer need to rent a physical store or spend money on inventories. Amway will be responsible for storage and distribution, with the latter being covered by its sales people previously.
"Our entrepreneurs will be able to spend more time with their clients," said Yu.
To enhance the offline relationship developed online, Amway has set up 10 experience stores nationwide with another eight in the pipeline to educate consumers and enable them to use their products during the designed activities.
There will also be dozens of smaller-sized experience stores at lower-htier cities, she said.
Yang Zhe, an Amway sales representative, said the experience center has lowered its operational costs as it brings clients to the center to see how the products work.
The 10-year plan for Amway China, which celebrates its two decades of existence in the country this year, includes efforts to double sales representatives from the present 60,000 people by 2025.
Amway's sales in 2014 reached $10.8 billion, an 8 percent fall from 2013, due to lower revenues in China and fluctuation in foreign currency exchange rates.
The top 10 markets for Amway last year included China, South Korea, Japan, United States and Thailand, with nutrition, beauty, durable and home care products being the top sellers.
