Ranked last year as the world’s number one direct selling business, Amway remains a family-owned business but recently broke with 60 years of tradition by installing Indian executive Milind Pant as CEO. Pant spoke to the AmCham China Quarterly about his own professional journey, COVID-induced challenges, and the company’s growth potential in China, which is Amway’s top market worldwide.
Started in Ada, Michigan, in 1959 by two friends – Rich DeVos and Jay Van Andel – Amway may have started as a uniquely American idea. Indeed, the name itself is short for “American Way”. But with the company, which is focused on beauty, nutrition, and home products, now in more than 100 markets worldwide and 90% of revenue coming from outside the US, it has long since left those confines and has clearly become a truly global concept.
Last year, Indian executive Milind Pant became the first non-family member to run the business when he was installed as CEO, replacing co-CEOs Doug DeVos and Steve Van Andel – both sons of the founders – in a landmark move. But Pant says the unique nature of the company has made that transition easier. “I think my role would have been much more challenging had I been part of a listed company,” he says. “To be part of a family-owned company with their commitment to the long term is a really important aspect of our transformation.”
Additionally, with 75% of Amway’s revenue coming from between Tokyo and Mumbai, an Asian head makes perfect sense, though Doug and Steve remain involved as co-Chairmen. More specifically, Amway has been in China for 25 years, where it has grown into the company’s largest single market – a fit that works so well, Pant argues, because of three intersecting ideas on which Amway was founded that remain relevant in China today – entrepreneurship, social connectivity, and health and wellness.
Three Core Pillars in China
“The idea of Amway is that it’s for everyone,” says Pant. “You don’t need capital, professional skills, or even a professional degree. Everyone is welcome. Our annual global entrepreneurship study of countries and markets across the world shows that 85% of Chinese society believes it’s a good idea to be an entrepreneur. So, the first idea of Amway fits in very well with China.”
The second core idea of Amway, Pant says, is a social one, which strikes a chord in China, where a new ecosystem is developing, borne from the successful fusing of e-commerce and social platforms. “It takes the easy frictionless experience of e-commerce and humanity in engaging on social platforms to build this new model, which is getting massive traction and investment in China,” Pant says. “Though it was born in an offline, face-to-face, door-to-door community, Amway was built for social commerce because at its core are entrepreneurs who love building communities.”
The third pillar is Amway’s focus on health and wellness – “a true need of Chinese society”, in Pant’s words, an area further fueled by product innovation. “Health and wellness, especially when it comes to holistic wellness, is a concept similar to that of traditional Chinese medicine, which is also very holistic and very preventive in nature,” says Pant. “So, we are now getting products combining the best of East and West. For example, our team recently launched a product in China that helps with long-term immunity called “Triple Protector”, which has got turmeric and licorice, two very eastern ingredients, combined with Acerola cherries, which is about as western as you can get.”
Personal and Professional Growth
Milind Pant’s own journey has combined both eastern and western experiences, and he’s found some similarities between the two that he’s put to good use in his professional career. “When I was growing up in India, my parents would essentially inculcate in us, what in West Michigan we call family values, and what in India we call sanskar. But we had modest material means; we didn’t have air conditioning at home through our years growing up and India is a hot country. So I’m very grateful for all the opportunities that I got in life.”
Pant goes on to list three areas of his professional life that he’s learned to develop over the years and that he would seek to apply across any role or situation. “I think one thing is to be open to every opportunity that comes one’s way and sees it almost like an adventure. My first role at Unilever India was not in a glamorous marketing or strategy role, but rather in a division that made leather shoes for exports. In 1994, leather was in short supply in India during this time, so as a young cocky man in my first role at Unilever, I decided to go to China to get leather. I had never traveled outside of India. My first visit to any place outside India was to Hong Kong. We took the wooden bridge from immigration in Hong Kong over to Shenzhen. From there, I went to Dongguan and Zhengzhou. I was fascinated with what was happening in China in 1994 and I became a fan and a student of China – for life in some sense.”
“I never expected then that it would all come full circle some 25 to 30 years later. When I was a part of Yum! China, for example, I had the privilege of traveling to over 25 of the provinces in China. But that’s something which is important, and there’s a book called Range which I read recently where the author David Epstein captures it really well in terms of the range of experiences that set people up for better success in a world that is so complex and changing. That’s the first thing – the openness and the adventure to have different experiences in one’s life.”
The second key area that Pant lists is the importance of a growth mindset, which he says makes him continue to learn every day. Growing up in India, English was not his first language, but each morning in Ada, Michigan, he reads five to seven English-language newspapers. “I do it every day, I keep learning, and I think that’s what a growth mindset is all about,” he says.
Pant has lived and worked all over the world, and his third key learning comes from his stint in Thailand as Managing Director for Yum! Brands. “I learned from my mistakes when I was running Thailand in my first GM role. That is, to lead from the heart and not from the mind, not to get enveloped by pride or fear, but to lead with love and humility. The Thais taught me that everything in Thailand is about the heart. The Amway culture at its core is all about the heart, too. Leading with your heart, living life with a growth mindset, and just being open to whatever comes one’s way and experiencing that adventure is the three things that I would take from my life and my professional career thus far.”
Potential in International Markets
Thailand is one of Amway’s key growth markets, as is China. But with China already Amway’s top market, and the company employing 7,000 staff there in addition to much more independent Amway Business Owners, or ABOs, how much potential growth could be left?
“Let’s look at Korea, another successful business of Amway’s in Asia,” says Pant. “Korea has a population of 50 million people. We have a business that’s almost a billion dollars, so that works out as $20 for every Korean citizen. That’s how we view our per capita sales. Our China business is roughly $2.5 billion dollars, a third of our global business. That’s about $2 to every Chinese citizen. Now, granted, there’s a difference in per capita incomes. But Tier 1 and Tier 2 cities in China are very close to Korea’s per capita income. So, we’d like China to achieve success on par with Korea, and there is no reason why it won’t.”
Policy Challenges
The policy environment in any sector can be challenging in China, but the company is fortunate enough to have a seasoned professional at the reins. Frances Yu has served as President of Amway China since 2018 but has been with the company for two decades, and now sits on Amway’s Global Leadership and Executive Staff teams. A lawyer by training, Yu has previously worked as Amway China’s VP of Public Affairs and worked in the legal section of China’s Internal Trade Bureau, prior to joining Amway, roles that have equipped for crucial dealings with Chinese agencies, such as MOFCOM, SAMR, and others.
“At the fundamental level, our global interest and that of China’s are fully aligned,” says Pant. “We are obsessed with consumer safety and with high governance standards – we have that in every market that we operate in – so we are fully aligned with the priorities that the Chinese government has put forward, and we do it in ways that fit in very well with China’s priorities. We are into health and wellness, and we provide long-term prevention and immunity. It’s as much about fitness and good sleep and laughter and relationships as it is about vitamins and supplements. We are into digitizing and modernizing our business by embracing and investing in social commerce. All these are fairly aligned to the needs of China and the business that Amway is in. Our purpose is to help people live better, healthier lives. That’s been our purpose for the last 60 years, and that will be our purpose for the next 60 years.”
Mindlessly Global, Hopelessly Local
As with any multinational company, keeping alignment between, say, Michigan and China can be tricky, as Pants concedes: “I think most companies have this paradox, this swing between at times being mindlessly global and at times being hopelessly local, and everyone’s trying to get the balance right.” But he credits the firm’s operating framework as a great help in this area, with Amway’s approach being to empower those that are closest to the entrepreneur and the customer. “I had a chance to listen to General McChrystal recently and also read his book, Team of Teams. There’s a concept in the book where it talks about how the organization as a network is empowerment in decision making, with full information being available to those where the rubber hits the road – in our case, that’s the market. So, we provide a high degree of empowerment to our China team, with alignment both on a vision and strategy and on culture and leadership.”
Technology as a Tailwind
Another potential obstacle keeping CEOs awake at night is looming – but as yet unknown – disruptions from technology and innovation, but Pant maintains that technology trends are a “tailwind” for the business. “There was this perception of Amway being a door-to-door business,” he says, “But over 90% of our sales in China are online, and more than 90% of ABO or customer queries that come to us in China are resolved by bots. What keeps me up at night, though, is that our conventional competition has changed. We are reinventing direct selling on a journey to social commerce. But in that journey, we are now competing with other companies that have significantly larger resources and have been doing this for a longer time than Amway. Are we moving fast enough? Are we testing and learning enough things so that we know if we’ve failed or what we can scale up?”
“All our competitors in the area of e-commerce in social platforms have amazing capabilities,” he continues. “They’ve got much larger capital budgets than we can ever match. But they don’t have one thing that Amway has, and that’s the entrepreneur. That’s our secret. The reason for our success in the past, today, and going forward, is that entrepreneurial spirit of someone who’s working with her own freedom and flexibility. We hope to move forward in building communities around her passion. That’s something that none of the players I know – be it Amazon here in the US, or Alibaba in China – have yet.”
COVID Challenges
Many US-headquartered companies with a large presence in China breathed a sigh of relief when the bilateral Phase One trade deal was signed in January. But just days later, the full extent of the COVID-19 pandemic was becoming clear, with firms affected in many and varied ways. “Our biggest priority was to keep our people safe,” says Pant. “The Chinese government gave us special permission during the Lunar New Year holiday to keep our Guangzhou manufacturing facilities functional. We also had permission to operate in the US, where we have two key manufacturing plants in Ada and Buena Park. So, our colleagues were going to work every day and our top concern was to make sure we kept them safe.”
That said, supply chain challenges soon kicked in, with both packaging supplies and ingredient supplies disrupted, including in China, a situation that Pant says took some time to resolve. “But as we were having those challenges in China, we ramped up our production facilities here in Buena Park and Ada and then supplied to China. But the biggest benefit of what has remained a tough and volatile time across a number of countries is that the best of Amway got unleashed. We did an employee engagement survey, right in the middle of the pandemic. 94% – the highest number ever – said they were proud to be working at Amway.”
Geopolitical Headwinds
Despite the successful signing of the Phase One trade deal, COVID-19 has also put further strain on a bilateral relationship that had been looking to recover after 18 months of retaliatory tariffs, with some of the more pessimistic analysts raising talk of a decoupling of sorts between the world’s two largest powers.
“We acknowledge the reality of the dynamics that are going on and this pandemic has accelerated the trends that were already bubbling before it came along,” says Pant. “That’s happening in digital, and it’s happening for the challenges of globalization, too. That’s the reality. The idea of Amway is that Amway is for everyone. We have a million distributors across the world – across every age group, every ethnicity, every religion, every race, every language. There are ten of us on the leadership team, including me, and we come from seven different countries across a range of ethnicities. This just reflects the global nature of the Amway idea and the global nature of Amway.”
“But we are all in, in terms of looking for areas of similarities across societies, looking for areas of similarities across culture, looking for areas of cooperation, while acknowledging that there are serious differences today and that those differences are going to be tough to resolve in the months and years to come. Overall, though, we remain committed to helping entrepreneurs across China, especially the younger generation, succeed in the coming years ahead.”
This article was originally published in the Issue 2, 2020 edition of the AmCham China Quarterly, an executive-targeted periodical focused on policy, business, and technology, driven by C-suite perspectives and insights. To subscribe or contribute to the Quarterly, contact our editor: mdreyer@amchamchina.org.
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