Amway Becomes Second Largest Direct Seller

Within direct selling, Amway ranked second, behind Avon Products Inc (10.5%, 2010) and ahead of Japan Consumers Cooperative Union (3.9%) and Herbalife Ltd (3.2%).

Like its direct selling peers, the company has built share on emerging markets. In 2010, 69% of its total sales were generated in Asia Pacific, with 34% coming from China alone.

The company’s success in Asia Pacific has been offset by decline in Japan, its second largest global market after China, at a -7% CAGR over 2005-2010 in fixed US dollar terms. Japan generated 12% of Amway’s global direct selling value sales in 2010 compared to 21% in 2005. The company’s third largest market, its domestic US one, generated 11% of 2010 values compared to 16% in 2005 and as such, the company’s business is becoming increasingly focused on less developed markets where the direct selling model continues to thrive.

Amway’s principal business is consumer health, which generated approximately 42% of its non-store retailing revenues in 2010, and in which the company ranked sixth globally. The bulk of these sales are of vitamins and dietary supplements (VDS), sold under the Nutrilite brand. The next largest part of its business is beauty and personal care (BPC), which generated a combined 26% of sales and in which Amway ranked 17th in the global market in 2010.

Home care sales generated a further 8% of revenues in 2010. The company also offers consumer appliances and housewares and home furnishings in a limited number of markets. These smaller categories are likely to become more important to the company over the forecast period, as it attempts to push appliance sales with water and air purifying systems.

The Amway Corp in Retailing (World) company profile offers detailed strategic analysis of the company’s business, examining its performance in the Retailing industry. The report examines company shares by region and sector, product developments, market and distribution strategies, challenges from the competition and future prospects. Use it to understand opportunities and threats facing the business and the factors driving success.


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Category: Direct Selling

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