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  • Essay / Amway goes astray in China - 1078

    "Amway" goes astray in ChinaAmway is a multi-level marketing (MLM, also known as network marketing) company founded in 1959. The name of the company is an abbreviation of "American Way". Its product lines include personal care products, jewelry, dietary supplements, water purifiers, air purifiers and cosmetics and other top brand products. Amway is one of the largest international direct selling companies and entered China in 1995. Their entry into the Chinese market However, in 1998 the Chinese government declared a ban on direct selling, which threatened a market substantial for Amway. The reason why the Chinese government decided to ban direct sales is because they believed that Amway's direct sales. The sales techniques could propagate a heretical religion and Chinese authorities believed the ban was entirely necessary because Amway's distribution and marketing policies were indicative of illegal activities. The original intention of Amway's founders was to create a business using a new means of production. a distribution that facilitates entrepreneurship, understanding of economic management and economic independence among its associates (i.e. distributors; the term currently used is Independent Business Owners, or IBO) . Amway's marketing structure is based on personal relationships to recruit new salespeople, called distributors. They are independent agents who rely on close relationships such as family, friends and co-workers as clients. To move up the hierarchy, a successful agent will sell more and more products through this network of people. The circle gets bigger and bigger as a distributor is expected to recruit others to join Amway. The pyramid and recruitment method used by Amway distributors has been described as cult recruitment. The Chinese government was afraid of the potential chaos that Amway's direct sales technique could cause in China. The Chinese government's concerns relate to Amway's independent network system and door-to-door sales techniques. Amway's emotional motivational meetings have frightened Chinese officials about possible social chaos. Government opposition to direct selling companies also stemmed from fears that giant mass organizations could become alternatives to the Chinese Communist Party and call party loyalty into question. This fear could possibly be justified. given that Chinese society was standardized under the communist party for many years and the Chinese were already inclined to become homogeneous under a new concept like that suggested by Amway. Additionally, in Chinese society where “face” is almost everything, a business that relies on connections can be complicated..