Amway: Finally Grows After Four Years of Declining Sales
Amway has been the largest direct seller in the world from revenue point of view since 2012. 2012 was the year when Avon and Amway changed places at the top. While one company alone is never enough to show a trend an industry is in, the leader’s performance has always been interesting to follow to get some significant clues. And starting from 2014, Amway’s growth performance was not so bright… until 2018:
As the above table points out, things did not go well at Amway between the 2013-2018 period. To be more precise, its global sales went down from $11.8 billion in 2013 to $8.6 billion in 2017, a 27%-decline in five years.
Finally, Amway managed to reverse this trend in 2018, by increasing its global sales to $8.8 billion. It is important to note here though, this meant merely a 2.3% growth on a year-over-year basis and Amway is still very far from its peak sales of 2013 (i.e. $11.8 B).
Looking at Amway’s Growth
Amway management attributed this modest growth to the “significant investments in digital tools and mobile experiences as well as product innovations”. It was said these helped Amway’s sales organization attract and retain more customers in 2018. Amway also said it had seen the most concrete results of these investments in China where 70% of orders were placed through mobile devices. China is Amway’s largest market in the world.
Amway’s top ten markets are China, Korea, the US, Japan, Thailand, Taiwan, India, Russia, Malaysia and Italy. China, the U.S., Thailand and India reported growth numbers, Korea, Russia and Malaysia stable figures, and Japan and Taiwan saw declining sales.
Co-Chairman Doug DeVos says India is expected to be a huge growth driver for Amway and will also play a role in its global supply chain. Amway targets a sustained double-digit growth in the next five years in India, that will possibly put India among Amway’s top five markets. So far, Amway has been growing at a yearly rate of 7% in this market. Amway’s target is to reach $1 billion annual sales in India by 2025.
Looking at Amway’s Product Categories
Amway’s products are under three major categories: Nutrition, beauty and personal care, and home care. Nutrition is company’s largest revenue-generator with 52% share in its global sales. Then comes beauty and personal care with its 26% share and home products with 20%. 2% of Amway’s sales is classified under “others” category. Nutrition products was the highest-growth-category in 2018. Its share was up 3 (beauty and personal care’s was up 1%) as compared to 2017.
Amway prides itself with having 450 unique products and also with its Nutrilite brand for being world’s top-selling vitamins and dietary supplements brand. “Protein Powder”, “Dietary Supplement” and “Vitamin C Plus” are the three best-selling nutritional products.
Looking at Amway in Some Numbers
* Operates in more than 100 countries and territories
* Employs over 16,000 staff globally
* Has nearly 1,000 scientists, engineers and technicians in its R&D departments
* Owns 15 manufacturing and processing plants
* Holds in excess of 800 patents
2019 and Beyond
Will Amway be able to maintain its leadership position in the global direct sales industry in 2019? Well, looking at close competitors’ recent performances, I would say, “Most probably.” The gap is too wide to be closed.
On the other hand, will it be able to come up with a record sales in 2019 to exceed the $11.8 billion of 2013? That’s very unlikely!
Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting firm in Canada specialized in providing services to direct selling firms. WDS Consultancy is a proud Supplier Member of the Canada DSA. It is also the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.