Amway to increase production capacity by 56 percent in China
20/1/2005 10:59
Direct-selling giant Amway will increase its production capacity from 16
billion to 25 billion yuan (1.93 billion to US$3 billion) in China, China Daily
reported Thursday.
The company, experiencing an especially good performance
in China, will complete its expansion in April this year, Audie Wong, president
of Amway (China) Co Ltd, was quoted by the paper as saying.
Besides boosting
its production, he said, the company will open 40 to 50 new stores in China this
year. Currently it has 140 stores in the country.
Amway will have a budget of
250 million yuan (US$30 million) this year in advertising and brand-building
activities in China when its spending in 2004 totaled about 150 million yuan
(US$18 million), he added.
Amway's nutrition food brand Nutrilite continues
to be an important part of its business while its skincare arm is to have a
greater presence in its brand-building efforts.
The firm's ambitious action
was pushed by fast growing sales revenue in Chinese market.
Wong estimated
the company's sales revenue will soar by 50 percent in 2004 though the figures
have not been released.
The company's sales reached 10 billion yuan (US$1.21
billion) in 2003, up from 6 billion yuan (US$725 million) in 2002.
Amway's
move comes after China prepares to lift its ban on direct-selling and will soon
issue rules on direct-selling.
China banned direct sales in 1998, saying it
was hard to differentiate these from so called "pyramid sales," which had led to
widespread fraud, consumer losses and social instability.
Ten foreign-funded
direct-selling companies including Amway were allowed to continue their business
after 1998, but they had to change their sales mode by selling goods through
retail outlets and "non-employee" sales representatives.
Xinhua
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