Amway braces for flat sales growth amid

Corporate June 19, 2015 01:00

By Watchiranont Thongtep

The N

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An economic slowdown has been affecting all businesses, including the largest direct-sales company in the country, Amway. Its Thai boss, therefore, does not expect sales to exceed last year's level.



"In the first half this year, we witnessed flat growth in our business. The stagnant situation is a result of the sluggish economy in line with weak consumption, [along with] a high level of household debt," Kittawat Ritteerawee, managing director of Amway (Thailand), said yesterday.

"So we decided to do promotions of personal-care products like toothpaste to stimulate our sales in the current quarter. We admit that we have allocated some of our advertising budget to do promotions as a short-term strategy, and this strategy has had satisfactory results."

After launching a buy-one-get-one-free campaign for its toothpaste, the company enjoyed a tenfold increase in the product’s monthly sales compared with the same period last year. This strategy also increased the number of new business owners by 30 per cent.

"If the economic situation does not improve, our sales growth may be flat this year. Last year, the company recorded annual sales of Bt16.25 billion," Kittawat said.

However, Amway chief operating officer Michael Cazer, who visited Thailand yesterday, said: "Thailand is a very promising market for us. In terms of sales, Thailand is ranked as the No 5 revenue contributor behind China, South Korea, Japan and the US."

Cazer also described Thailand as the marketing and research-and-development hub for the company. Despite facing an economic slowdown, Thailand still offers long-term benefits for direct-sales companies like Amway because young people have a positive attitude towards self-employment.

"In the sense of self-entrepreneurship, direct selling is one of the top alternatives offering young people financial sustainability and security," Cazer said.

Meanwhile, these young entrepreneurs are tech-savvy and very active in social media as they seek opportunities for their own business.

To capitalise on the digital age, the company yesterday announced a 10-year strategy called "AmwayNEXT" as a path for sustainable growth by focusing more on digital media and creating further engagement with its young business owners via online communities.

This strategy emphasises creating solutions and compelling brand experiences that involve business support through technology.

"The Amway business today is quickly evolving its digital presence, where a couple of clicks on a smartphone or tablet device can show Amway business owners everything they need to know about the state of their businesses in real time. Another click or two brings them to robust multimedia experiences on health and beauty care, enabling them to share with customers much more quickly and conveniently," Cazer said.

Kittawat said he had observed success among younger business owners. Five years ago, the age of Amway business owners started at about 35 years old but now it starts at 18.

With this new milestone and a US$332-million (Bt11-billion) investment in manufacturing and R&D expansion globally, Amway expects to double its sales in 10 years.

"In support of this strategy, we have short- and long-term plans in place for specific target groups in areas of health, beauty, and [the overall] Amway business," Kittawat said.

"Focus groups will be held to engage customers in compelling product experiences and introduce ABOs [Amway business owners] to business supports and tools, namely ‘Beauty 4 ME’ events designed for customers interested in beauty, ‘Good Day 4 U’ events for health-conscious customers, and ‘We Are Amway’ events for people looking for a career opportunity as ABOs. The series of events will begin this year."