ADA, MI — Amway sales dropped more than 7 percent in 2016 to $8.8 billion, marking a third year of revenue decline for the Michigan-based direct sales giant.
The privately-held company, headquartered in the Grand Rapids suburb of Ada, released its overall 2016 sales figure this morning — showing a $700 million decline from a year earlier. The last time Amway had sales in the $8 billion range was in 2009.
But 2016 marked the smallest drop in sales of the three-year decline. Revenues slipped 12 percent in 2015 and 8 percent in 2014.
The direct seller increased sales in seven of its top 10 markets, but had lower revenues in China, its biggest market, for the third straight year.
“We actually think the numbers were pretty good,” Amway Chairman Steve Van Andel told MLive and The Grand Rapids Press. “If you look at the world for us, it’s primarily our largest market is going through a cycle.”
With China’s middle class on track to balloon to 550 million people by 2020, Amway remains committed to growing its business in what is expected to be the world’s biggest economy.
“Everyone still says they are disappointed with China because their economic growth is only 6 or 7 percent,” Amway President Doug DeVos said. “That’s still pretty good. We see a lot of potential there. We are very confident in the market itself and what is Amway China.”
The top 10 nations for Amway in 2016 were China, United States, South Korea, Japan, Thailand, Taiwan, India, Malaysia, Russia and Hong Kong.
Amway sales were up double digits in nine countries. The company didn’t identify them and doesn’t release sales figures for individual markets. The annual announcement also doesn’t reveal its profits.
But Amway does break down sales by product category. In 2016, nutritional supplements made up 49 percent of sales, up 3 percentage points from 2015; beauty and personal care remained at 25 percent, durable products was 15 percent, down 1 percentage point; home care remained 7 percent while other products accounted for 4 percent of sales, down 2 percentage points.
The Amway made products are sold through a network of more than 3 million distributors.
“We are pleased to see the continued and growing relevance of the direct selling model in today’s marketplace as people place real value on personal recommendations, and technology enables our distributors to connect with customers at any place, at any time,” Van Andel said.
He added the company planned to evolve the business in China by taking advantage of technology to grow market share. Sales in China accounts for about one-third of the company’s sales. Amway’s biggest market continues to be Asia.
Amway remains the biggest player in the direct sales industry, which had sales of nearly $184 billion in 2015, according to the World Federation of Direct Selling Associations.
“Nearly 60 years after we opened for business by helping others open for business, many things have changed – but the value of a business opportunity that is open to everyone isn’t one of them,” DeVos said.
Article Source: http://www.mlive.com