Amway Sees China 2013 Sales Growth Below 10% Amid Competition

Amway Corp., the closely held direct seller of vitamins, air purifiers and cosmetics, expects sales in China, its biggest market, to grow less than 10 percent this year, President Douglas DeVos said.

Amway, based in Ada, Michigan, had sales of about $4 billion in China last year, led by its Nutrilite line of nutritional supplements, DeVos said in an interview today in Beijing. The company had sales growth below 10 percent last year after growing above that level in previous years, he said.

DeVos said growth in China -- which accounted for about a third of the company’s 2012 global sales of $11.3 billion -- is slowing amid competition from international and Chinese companies in its product lines, including cosmetics. Amway products such as nutrition supplements are being counterfeited in China, he said.

“Two years ago we grew in the mid-double digits, we had really strong growth, last year we were in the single digits,” DeVos said. “What we’re seeing is a lot of competition. Everyone is coming in as the market has developed.”

Amway has a sales force of about 300,000 people in China and 9,000 company employees in the country, DeVos said. He said counterfeiting of its products is increasing in tandem with the company’s growth in China.

“It’s probably a problem that’s going to persist, and as soon as we find one solution, the counterfeiters do something different,” DeVos said. “We are particularly focused on this because of our nutritional products, and food safety, and quality.”

Amway faces rising competition for its cosmetics line in China from companies including Paris-based L’Oreal SA (OR), Cincinnati-based Procter & Gamble Co. (PG), Japan’s Shiseido Co. (4911), and Unilever Plc. (ULVR)

Amway relies on direct sales and 300 retail outlets across China, DeVos said.

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To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at mforsythe@bloomberg.net; Stephen Engle in Beijing at sengle1@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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