Written by Chen Jiying
Edited by Wan Tiannan
Why is the new strategy not working, and do you have any other options?”
In 2021, at an online communication meeting, the Amway Global Board of Directors threw the question to Yu Fang.
As the chairman and president of Amway (China), at that time, Yu Fang was upgrading Amway China's big health strategy, hoping to reverse the latter's performance consolidation that lasted for six or seven years.
Yu Fang, President of Amway (China).
However, in the first half of the new strategy, sales still declined.
In the face of doubts, although Yu Fang is under pressure, he firmly believes in the successful practice from the market and the systematic and thorough strategic combing, so his attitude is very firm, "there is no other plan, we are very confident in the big health strategy".
Finally, in 2021, Amway China's performance stopped falling and rebounded, increasing by 1%. In 2022, the dividends of the big health strategy will be fully released, and Amway China will end successfully with a high year-on-year growth of 16%.
On the afternoon of November 16th, after leading Amway China across the eye of the storm, he appeared at the Amway Beijing Flagship Experience Center. Yu Fang is as energetic as ever, his words are humorous, his answers to sharp questions are not relaxed, and he exudes optimism and confidence from the inside out.
Such optimism, calmness, elegance and calmness are rare among the leaders of foreign companies in China.
In the turbulent environment, many foreign companies have either swayed strategically, downgraded China's strategic weighting, or even withdrew, or have failed to perform well.
Amway is an exception, with China being its largest market for 20 years in a row. By 2022, Amway China's contribution to Amway's global revenue has soared to about 36%.
Today, Amway China has become a pioneer in An's global strategic transformation and an engine of innovation, and its sample has been promoted as a "global experience". In Yu Fang's view, Amway China's success is due to its long-term strategy of "in China for China".
Along the main line of great health, bloom the "flower of a better life".
In terms of share and scale, the Chinese market, which has long surpassed the domestic market of the United States, is Amway's strategic market.
However, the Chinese market, which has been soaring all the way, has also fallen into a six-year-long period from 2014 to 2020.
Yu Fang, who became the President of Amway (China) in 2018, has taken on the important responsibility of leading Amway China out of the trough.
Within a few years, all kinds of high-density impacts, at the beginning, we were also blinded", Yu Fang bluntly said, external pressures include the impact of e-commerce and micro-business on the traditional direct sales model, cross-border e-commerce to drive the influx of overseas health care products brought about by the competition, and domestic health care product brands to catch up.
At the beginning, Amway China, which was a little anxious, played live broadcasts and engaged in **, and successively launched a number of lightweight Internet celebrity products to attract new users.
But after some trying, the team quickly realized that this path was not working, "In the short term, a lot of traffic was pulled, but most of them were one-time passers-by who were wool, and they couldn't stay, and customer loyalty went down;."At the same time, the amount of purchases has dropped because there are more lightweight small products."
No longer follow the trend, but make the wind.
Yu Fang and his team calmed down and looked inward, looked for and gave full play to Amway's intrinsic advantage genes, returned to the main line of the big health strategy, and took "comprehensive health promoter" as the foundation of their lives.
Amway Guangzhou production base.
Such a strategic choice is first based on Amway's underlying advantages.
With 89 years of experience in the field of nutrition and health, Amway Nutrilite has been sold in more than 100 countries and regions, which is an irreproducible product advantage of Amway.
Amway Nutrilite has its own 'gold standard', with optimal raw materials, high-quality and efficient formulas, and safe and effective products, all of which respond to consumers' healthy consumption trends", Yu Fang said.
In 2022, Amway Nutrilite's sales contribution to Amway China has increased significantly from about 50% to about 70%, and Yufang expects its proportion to continue to increase.
The big health strategy has also fully unleashed the advantages of Amway's direct sales and community.
Amway was originally engaged in direct sales, and in a field like the community, it can help users improve their cognition and establish a healthy lifestyle, which is in line with human nature and the needs of healthy consumption," Yu Fang said frankly.
The "big health" advocated by Amway is not limited to narrow health products, but a comprehensive concept of physical and mental health and good social relationships.
Amway's more than 200,000 marketers have become the spokespersons for spreading great health.
Based on the community model, Amway has changed the single business model of the health industry that only sells standardized products and services, but through cognitive change, literacy improvement, action change, Xi cultivation, and then one-to-one personalized product solutions, as well as in-depth professional services, and finally move towards universal health.
The strategic choice of big health also echoes the "national strategy and market demand".
According to Nielsen's 2023 Global Consumer Outlook Report, 65% of respondents in China have prioritized "physical and mental health".
Amway, which is on the front line, also feels the same way, and its health mini program called "i Challenge Planet" has attracted more than 1.6 million registered users to check in and learn Xi.
From the perspective of horizontal comparison, the growth of the big health industry is vast - in 2022, China's total health expenditure will be 8,052.8 billion yuan, accounting for only 6% of GDP82%, far lower than the 18% in the United States in the same period, there is still room for improvement.
Amway's big health strategy also echoes the policy of Healthy China.
There is no comprehensive well-off without national health", Healthy China's 2030 policy clearly states that health is the basic rights and interests of the people, according to the aforementioned plan, in 2030, the overall scale of China's health industry will reach 16 trillion yuan.
The concept of active health and normal health advocated and implemented by Amway also echoes the concept of "curing diseases before they occur" in Healthy China.
To sum up, the big health strategy has released Amway's underlying advantages internally, echoed the public demand and national policies externally, and resonance has brought a win-win situation, and finally escorted Amway China's performance back to growth.
Despite its success, Amway has not stopped and continues to iterate.
Health is just the starting point, and now, the needs of the Chinese public have begun to leap to a more comprehensive "better life". Amway China, which is keenly aware of this trend, has put forward a new strategic proposition of "Flower of a Better Life", covering all-dimensional indicators such as physical health, active life, emotional health, good relationships, financial security, personal growth, social value, and green harmony.
She expects that on the high growth base in 2022, Amway China is expected to maintain a steady year-on-year growth rate of about 5% this year and in the next few years.
Deeply cultivating localization, Amway "heavy" China
After the launch of Amway's "Flower of a Better Life" strategy, "the board of directors did not give me a performance target for the next five years", Yu Fang said with a smile.
This kind of reassurance and letting go stems from the fact that Amway China, which is highly valued and trusted, has been fully localized, rather than just looking at the "China Branch" of the American baton.
It can also be seen from the market division. Today, Amway is divided into three major markets worldwide, Europe, the United States, and other regions of the Asia-Pacific region except China, and China is the only independent single market in the world.
Amway, which has been in China for 28 years, has gradually established a comprehensive localized operation system, from R&D, production, chain, digitalization, strategic decision-making to senior management team, and has achieved "end-to-end self-sufficiency" in the Chinese market.
Amway China's executives have long been fully localized, and Amway's global executives are almost all "China experts".
Nutrilite founder Carl Hongbang has worked in China for 12 years, and his entrepreneurial inspiration came from the theory of traditional Chinese medicineAt the Amway (China) Good Life Night, Steve Winnlo, Co-Chairman of the Board of Directors of Amway Company, and De DeVos came all the way from the United States to give speeches in personAmway's Global Chief Executive Officer, Mr. Pan Mulin, has visited China several times this year, and he can talk about the theory of Chinese medicine.
Amway Global CEO Pan Mulin.
Amway China production is also fully localized.
In March this year, Amway invested another 600 million yuan to increase its investment in the Chinese market for the tenth time, and plans to complete the upgrading of its Guangzhou base in the next five years.
As Amway's largest overseas production base in the world, the output value of the Guangzhou base accounts for 45% of Amway's global output, and the product line covers more than 500 products, not only to meet the Chinese market, but also to more than 50 countries and regions around the world.
The localization of Amway China's R&D is also rising. Han Qiang, general manager of Amway (China) Science and Technology Innovation Center, who joined the company in 2005, witnessed this process.
In 1996, Amway's R&D department was established to provide technical support in cooperation with the production department.
Ten years later, in 2005, the Amway Shanghai R&D Center was officially established, "upgrading from global technology transfer to local technology innovation," Han Qiang explains.
2012 was a new node, this year, Amway China's R&D team began to take full responsibility for Amway China's product development, "with the right to develop innovative product formulas".
Only three years later, the China R&D center was upgraded to a global R&D center, and a full-link R&D innovation system from raw material research to product development to production implementation was built.
Today, two of Amway Nutrilite's four global product categories, plant-based proteins and herbal Chinese medicine products, are developed by R&D teams in China.
Such a highly localized R&D system is quite rare among foreign companies - most of the Chinese R&D teams of foreign companies are mostly in a standby position in their global R&D system, focusing more on the localization and adaptation of innovative products and innovative technologies at their headquarters.
Now, when Han Qiang goes out to communicate with his peers, "I am very envious when I hear that we have 100% of the formula rights." ”
Only with full localization can we achieve the strategic goal of "in China for China".
On the industrial side, Amway China has become one of the backbone forces that assists in the innovation of China's modern biotechnology, agriculture, traditional Chinese medicine and other industries.
As early as 2017, Amway Plant R&D Center cooperated with the Chinese Medicine Research of the China Academy of Chinese Medical Sciences to complete the world's first whole genome sequencing of chrysanthemum, and completed the full-length transcriptome genetic information mining of the important medicinal chrysanthemum variety - Hangbai chrysanthemum.
Amway China Plant R&D Center.
In addition to the innovation and research of raw materials, on the product side, Amway Nutrilite has successively developed and launched products such as Ginkgo Cistanche Tablets, Licorice Turmeric Vitamin C, Ganoderma Lucidum Spore Powder, and Hanben Extract Drink Series based on traditional Chinese medicine and authentic Chinese herbal medicine, accelerating the modernization, standardization and internationalization of traditional Chinese medicine.
In addition to selling well in China, these products are also exported to many countries around the world, and the single product of ginkgo biloba cistanche tablets alone has exceeded 3 billion US dollars in global sales, which has also driven traditional Chinese medicine products to take advantage of the situation to go overseas and polish their business cards in the world.
On the demand side, the localization of R&D can also be customized according to local conditions and on-demand to develop health products suitable for the physique and consumption needs of the Chinese public.
In China for China, Amway, which has a deep understanding of China and is highly localized, is very confident to help discover Chinese wisdom in the field of plant nutrition and export Chinese solutions to the world.
In terms of long-termism in value distribution, Amway is a "human business".
Since joining the company in 2000, Yu Fang's Amway career has been 23 years.
But Yu Fang said frankly that she is not an "Amway old man", "our first two Amway China chairmen retired for nearly 30 years".
Not only senior executives, but also ordinary employees at Amway, the turnover rate is also very low, and it is not uncommon for employees who have worked for ten or twenty years.
Amway is really attractive, and employees are reluctant to leave as long as they come here", Yu Fang said with a smile, "because Amway's culture is very special and attractive."
Amway's underlying culture is "people-oriented".Partnerships are the pillars of a company's value.
It's not just employees who benefit, more than 200,000 marketers.
Although growth is the basic demand of enterprises, Amway is very determined in terms of growth model, neither opening *** on the public domain e-commerce platform nor live streaming on Douyin.
The reason for this is simple: to leave growth opportunities to marketers.
Amway's attention to marketing personnel is also the lead that attracted Yu Fang more than 20 years ago, resolutely leaving the iron rice bowl of the ministry and devoting himself to it.
At that time, when Yu Fang communicated with Amway executives, he found that the latter never talked about the impact of the policy on the company's revenue, "only about what kind of challenges this policy adjustment will bring to our marketers."
This kind of beneficial and altruistic thinking has greatly touched Yu Fang, "I feel that this company is very different".
Tearing apart the surface and going deep into the core, it is not difficult to find that Amway's main business has always been "people's business", which has also allowed Amway to develop a "people-oriented" gene - for employees, users, and marketing personnel.
People-oriented, so that hundreds of thousands of marketing personnel are always willing to accompany Amway all the way. Wang Xinhe and Xiao Zicheng, who have been with Amway for 25 years, deeply feel the same way.
Wang Xinhe was engaged in finance in the early years. The first person who brought her into contact with Amway was an MBA in the United States.
After some exchanges, she found that starting a business on the Amway platform is very different from a part-time job, her professional identity is no longer limited to step-by-step screws, she can improve her lifestyle through the unity of knowledge and action, have greater career freedom, fully open the upper limit of career development, and plan her life with the end in mind.
Such a refreshing model attracted Wang Xinhe to devote himself to this, and now he has realized his personal life plan of "retiring at the age of 45 and starting to study Xi life sciences".
Today, more than 200,000 marketing personnel of Amway China have radiated a positive life concept and a sunny and healthy lifestyle through the formation of communities, etc., to expand the "people's business".
During the epidemic, Xiao Zicheng saw that the people around him were in panic and confusion. To this end, he gets up early at 4 a.m. every day to systematically arrange health knowledge and edit it into a 15-30 minute voice course to guide customers and their relatives and friends to learn Xi and understand, eliminate fear, and do a good job of protection.
According to Xiao Zicheng's rough statistics, similar health knowledge dissemination has benefited at least 2,000 families.
Such a moisturizing and silent healthy community model is not only an iterative innovation of the business model of direct selling, but also a win-win situation of commercial value and social value.
"Marketers first show their positive and beautiful lifestyles and physical and mental state, and then attract more users to join through the community", Yu Fang explained, "The flower of a better life" is the marketer's "mouth for entering people, a pool for retaining people, and a ladder for growth".
For example, in Zhengzhou, a group of 60+ sisters formed an Amway girlfriend group to learn nutrition together, check in for fitness together, travel by car together, try cheongsam together, walk on the catwalk, etc.
Xiao Zicheng and his wife also have personal feelings about this. Nowadays, there is little marketing in his work, more in socializing, and the users have become like-minded and like-minded people with high trust in each other, "Reading the best stream of knowledge, and the parents of the parent-child camp with their children to climb the mountain, it seems to be work, but in fact it is life, it looks like life, but it is actually work."
The relaxation and calmness of marketers at the front end are inseparable from Amway's package of empowerment.
Reimagining fulfillment and delivery with digitalization – Since 2016, Amway has launched transactionalization, and today, 98% of transactions have moved online, 92% of goods are delivered within 24 hours, and marketers do not need to deliver products or advance money to order.
Empowering marketers to operate the community with content, Amway has specially built a solid content platform, with more than 30,000 pieces of text, ** and ** content, which marketers can use and take at any time.
With the successful promotion of Amway's transformation and upgrading, the centripetal force of marketers for Amway has also been unprecedentedly high, and many Amway second-generation generations have emerged to help parents move their business online, Xi systematically learn health knowledge, operate online and offline interest communities, and drive health into thousands of households.
At present, stabilizing employment and ensuring employment is a major plan for people's livelihood, and the society and enterprises are working hard to play a "combination punch" of flexible employment and innovation and entrepreneurship.
According to data released by the National Bureau of Statistics, by the end of 2021, the number of flexible workers in China had reached 200 million, accounting for nearly a quarter of the country's employed population.
The more than 200,000 marketers attracted by the Amway platform are a new model of flexible employment, innovation and entrepreneurship - the threshold for entrepreneurship is not high, no high capital is required, and there is no age limit.
In addition to employment opportunities, there is also a training system, and so far, Amway has also trained more than 6A team of 20,000 professional health consultants has created hundreds of thousands of health communities, driving millions of people to take health as a compulsory course in life.
As a result, Amway has achieved the organic unity of personal health entrepreneurship, public health improvement, corporate performance growth, and social employment opportunities.
Conclusion
After many exchanges with Amway's executives, R&D and marketing personnel, I have a stronger and stronger perception that Amway is a foreign company, but it has actually been internalized as an "authentic" Chinese company, serving Chinese users, benefiting from the Chinese market, empowering the Chinese medicine industry, and feeding back to the Chinese society.
Amway's ability to go through the cycle and go against the trend lies in its adherence to people-oriented, altruism, and social value in the Chinese market, which has achieved the resonance of corporate growth and social development, and the win-win situation of corporate interests and social benefits.