Amway: the surprising growth of a cult-like company in China - SupChina
Free

We're a new type of news publication

China news you won't read elsewhere.

Weekly Newsletter

Get a roundup of the most important and interesting stories coming out of China.

Podcasts

Sinica, TechBuzz China, and our 6 other shows are the undisputed champs of China podcasts. Listen now.

Feature Articles

Interactive, web-based deep dives into the real China.

Premium

Join the thousands of executives, diplomats, and journalists that rely on SupChina for daily analysis of the full China story.

Daily Newsletter

All the news, every day. Premium analysis directly from our Editor-in-Chief Jeremy Goldkorn.

24/7 Slack Community

Have China-related questions and want answers? Our Slack community is a place to learn, network, and opine.

Free Live Events & More

Monthly live conference calls with leading experts, free entry to SupChina live events in cities around the world, and more.

"A jewel in the crown of China reporting. I go to it, look for it daily. Why? It adds so much insight into the real China. Essential news, culture, color. I find SupChina superior."
— Max Baucus, former U.S. Ambassador to China

Free

We're a new type of news publication

China news you won't read elsewhere.

Weekly Newsletter

Get a roundup of the most important and interesting stories coming out of China.

Podcasts

Sinica, TechBuzz China, and our 6 other shows are the undisputed champs of China podcasts. Listen now.

Feature Articles

Interactive, web-based deep dives into the real China.

OR… for more in-depth analysis and an online community of China-focused professionals:

Learn About Premium Access Now!
Learn More
Minimize
Learn More
Minimize

Amway: the surprising growth of a cult-like company in China

Part of the daily SupChina newsletter. Subscribe for free

Multi-level marketing (MLM, 传销 chuánxiāo) or direct selling is a business model where a company relies on its own customers to sell its products. The customers make a commission not only on their own sales, but also on sales of their own customers who are recruited as salespeople. This is essentially the business model of a pyramid scheme, which is how some observers describe America’s largest MLM companies such as Amway and Herbalife.

That’s Beijing has now published a feature on the operations of Amway in China. Noelle Mateer writes that Amway has opened massive propaganda-style ‘experience centers’ across China (one just opened in the middle of Beijing’s Sanlitun area this year), partly to get around the country’s strict anti-MLM rules.

  • MLMs were banned in China in 1998, but anti-MLM legislation passed in 2005 paradoxically cleared the way for Amway to re-enter China because it defined what the company needed to do to avoid being labelled a pyramid scheme.
  • The legal workaround is the construction of show rooms or “experience centers” that allow MLM companies to sidestep rules against direct sales networks.
  • U.S. Education Secretary Betsy de Vos is married to Dick de Vos, former CEO of Amway and son of one of the company’s founders.

Share
Jeremy Goldkorn

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of SupChina, and co-founder of the Sinica Podcast.