Date: Thu, 19 Sep 1996 10:38:00 GMT+0800
From: "Phil. News Agency" <>
Subject: bn: Amway Corp. enters RP market early 1997 investing $6 million

Amway Corp. enters RP market early 1997 investing $6 million

By Lynda B. Valencia, Philippines News Agency, 18 September 1996

MANILA, Sept. 18 (PNA) - Amway Corporation, a US-based direct-selling giant, will enter Philippine market first quarter of 1997 with an investment of $6 million.

Amway Corporation president Dick DeVos, told a group of Filipino journalists that the company will bring in at least 11 personal care products as well as its highly successful L.O.C. Multi Purpose Cleaner.

Not included in the initial offering is Amway's cosmetics line, which analysts in the Philippines expect to give Avon, a run for its money.

DeVos said "we make it a policy take things slowly. As we start our operations, we are bound to market other things we have to start off with our reliables -- products that will surely sell in family-oriented country like the Philippines."

DeVos projects sales to shoot up to $100 million over the long-term but in three years, we forsee the distribution network to be more than 100,000 starting from about 10,000 in 1997."

He said the firm is targetting between $10 to $20 million in sales with an initial investment of $6 million.

Last year, the company sold $6.3 billion worth of consumer products-- ranging from personal care items to home electronics.

DeVos said opening up local retail trade to foreign giants is not expected to have a negative impact to the direct-selling business in the Philippines.

Last year, Direct Selling Association of America (DSAA) figures showed US sales increased 8.4 percent, notwithstanding the increase in telemarketing and online marketing transactions.

The Corporation have been wanting to enter the Philippines but it was only lately that it finally decided because the Philippines have become favorable for foreign countries like Amway.

"We took into consideration several factors in entering the Philippines, like the market stability, economic condition and deregulation," said Sally Frazee, administrator of Amway's new market development division.

A team, assisted by a Filipino marketing expert in Amways home office, worked on operational details of the Philippine plan.

Since Amway does not intend to put up a manufacturing facility in the country, it will be importing all Amway manufactured goods it will market here.

Amway, however, is open to marketing links with local producers in identifying goods which can be sold overseas through its marketing channels.

DeVos said that the scheme has been done in Malaysia and in other countries and "we can also do that in the Philippines."

The Philippines direct sailing business has been estimated to be worth $500 million in sales annually.

Data from the World Federation of Direct Selling Association in Washington D.C. showed 42,000 Filipinos are currently engaged in the direct selling business. Among the major players in the local market are Avon, Mondragon Industries and Sara Lee.

The company's business plan for the Philippine Operation is anchored on a $70 (roughly P1,800) starting kit which contains samples and introduction manuals on how to start an Amway distributionship.

The kit comprises two basic lines --personal care and homecare products --which will be introduced in the first year. On its third year, Cosmetics will be introduced.

Officials of the company said the choice of the two lines was based largely on historical experiences in other developing countries.

The kit includes liquid organic cleaner which company officials said was one of the first environmental-friendly cleaning compounds sold in the market.

LOC was a key to Amway's winning an environmental award from the United Nations Environmental Program in 1989.

Manufacturing occurs primarily at the Ada headquarters.

Selected products are also made for Amway by independent manufacturers in Australia, Austria, Belgium, Brazil, Korea, China, France, Germany, Hong Kong, Italy, Malaysia, Mexico, Netherlands, New Zealand, and others.

Others Amway operations include Amway Grand Plaza Hotel in Grand Rapids, Michigan; Nutrilite Products, Inc. in Buena Park, California, USA; and the Peter Island Resort in the British Virgin Islands.

Roli G. Talampas DSS, CAS, Univ of the Phils Manila