Amway reports $400M drop in global sales

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Amway’s global headquarters is in Ada. Courtesy Amway

Amway has reported a 5% revenue decline for 2019.

The Ada-based direct-selling company on Monday announced that global sales of $8.4 billion for the year ending Dec. 31, 2019, are down 5% from the $8.8 billion it reported in 2018, largely due to “significant declines” in the direct-selling industry in China, where Amway is No. 2 among direct-sales giants.

The nutrition category of vitamins, dietary supplements and weight management products continued to be the top sales category for Amway in 2019, representing 54% of sales, up 1% from 2018.

Beauty and personal care were 25% of sales, down about 1% from last year.

Global job cuts

The news comes as Amway recently completed a “comprehensive review of its global structure,” which resulted in the elimination of about 2% of its global workforce since 2018, including several hundred jobs in West Michigan.

The layoffs were spread across a number of Amway’s divisions and departments, including information technology, marketing, R&D, legal, HR, strategic planning, supply chain and finance.

Amway now has about 15,000 employees.

Revenue declines

Amway saw several consecutive years of sales declines since 2013 when it reached an all-time high of $11.8 billion in revenue. Sales were at $10.8 billion at the end of 2014, $9.5 billion in 2015, $8.8 billion in 2016 and $8.6 billion in 2017.

The company’s annual sales figure includes revenue from direct-selling operations and other business holdings.

Amway has several brands: Nutrilite vitamin, mineral and dietary supplements; Artistry skincare and color cosmetics; eSpring water treatment systems; and XS energy drinks — all sold exclusively by Amway independent business owners.

New investments

As part of a new “multi-year growth strategy and investment plan” announced by Amway CEO Milind Pant as part of his “new digital vision” shared publicly last year, Amway will invest more than $500 million in 2020 in digital platforms, product innovation and independent Amway business owner (ABO) compensation in order to “drive global enterprise growth” and “enable ABOs to better meet the needs of their customers.”

“Amway is investing in a future both online and offline,” Pant said. “We’re making it easier than ever for people to build a business of their own in areas they may already be passionate about, like health and beauty, all powered by social and digital tools that help them reach customers more efficiently and make online shopping simple.”

The changes Amway is making include the development of the 3E “Easy, Early, Earning” platform in China, which is designed to boost ABOs’ sales through social commerce in partnership with global technology company Tencent. Through the platform, ABOs receive commissions from new customer referrals, and new customers can receive product discounts by sharing with friends.

Another investment area for Amway is Core Plus+, a new incentive program that increases the earning opportunity for new ABOs and rewards ABOs’ “best practices in building a strong, sustainable business.”

The company also will continue to invest in traceability in nutrition and beauty through natural ingredients, especially the botanicals grown on its nearly 6,000 acres of certified organic farmland in the U.S., Mexico and Brazil, where Amway grows, harvests and processes plants using “sustainable farming methods” that then are used in Nutrilite supplements and Artistry skincare products.

Amway also is launching products geared toward consumers 35 and younger, including:

  • n* by Nutrilite, launching in Korea, Japan, China and the U.S. and addressing the top concerns of young consumers such as sleep, stress, focus, vision and immunity.
  • Artistry Studio, a limited-edition collection of makeup and specialty bath and body products inspired by cities from around the world. The brand has launched three collections featuring New York City, Paris and Bangkok, with the next launch focusing on Tokyo this spring.
  • CBD Cream and CBD Cooling Spray, just launched in the U.S. and the first of similar CBD products slated to launch in other markets in 2020.

Amway’s top 10 markets include China, the U.S., Korea, Japan, Thailand, Taiwan, India, Russia, Malaysia and Hong Kong.

Thailand leads the way in “fast, sustainable growth,” according to Amway, with the launch of BodyKey by Nutrilite, a personalized weight-loss program that blends products with natural ingredients and a mobile app.

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