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According to several qualified industry leaders attending the first session of the 14th Academic Symposium on Direct Selling in Beijing last Friday, the sales figures of the direct-selling industry on the Chinese mainland will grow more than 30 percent this year to 60 billion yuan ($8.79 billion). Li Wencheng, assistant to the general manager of the New Era Health Industry Group, one of the 24 licensed direct-selling companies on the Chinese mainland, said that his company will grow by an even larger mark-up than the average industry growth rate. Quite a number of attendees of the symposium look upon the controversial industry, which is still under strict regulation from the Chinese government, as a miracle in times of economic turbulences.
Quite a number of attendees of the symposium look upon the controversial industry, which is still under strict regulation from the Chinese government, as a miracle in times of economic turbulences.Andy Tsui, a postgraduate of Peking University, who studied the sales growth rate of Amway and the world economy growth rates from 1971 to 2008, found that when the world economy went downturn, Amway's sales went up. Huang Yonggang, general manager of New Era, assigned the sales increase of his company in the past ten months to new comers who had lost their job due to the economic crisis and turned to be direct selllers. He says that when people become unemployed they may try to find some new ways to survive and direct-selling is proving a solution for many.
According to his assistant Li, even with only 10 percent of the new direct-sellers becoming successful, they boost the company sales and also find a way to support themselves. In 2008 the sales volume increased so much, his company hired 20 new employees to do market research, website maintenance and public relations. So far this year they already hired 15 new employees.
"Direct selling can benefit the whole society and may also do great havoc to people," said Professor Chen Derfa, who organized the Academic Symposium. "Most direct selling companies mainly teach and train their direct sellers how to make money and do not teach them the decent concept of direct selling and as a result, the direct sellers may run the business in a wrong way," added Chen. While those struggling during the economic crisis may be finding a new source of income through direct-selling, some are still skeptical and don’t see any difference between this growing phenomenon and the banned pyramid schemes. |