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Amway is sending 13,000 of its top Chinese sellers to Southern California

The direct sales firm is bringing salespeople here as a reward. The trip is expected to generate a $10-million infusion into the local economy.

June 01, 2010|By Ching-Ching Ni, Los Angeles Times

The buses full of Chinese tourists started moving through Southern California last weekend, heading to Disneyland and outlet malls in convoys of as many as 100 at a time.

For the next month, they'll keep coming — carrying wave after wave of men and women with money to spend in a mass visit estimated to bring in $10 million for the local economy.

Behind this economic boon is the direct-selling company Amway, which has a sales force of 3 million people in 80 countries and territories around the world.

China is now its biggest market, with 200,000 "independent business owners" selling its products door to door and recruiting other salespeople.

The Michigan-based company is footing the bill for 13,000 of its top Chinese sellers to spend a week here — at a cost of about $80 million. Those who earned the perk for themselves and their spouses have brought in the equivalent of at least $160,000 in annual sales of such items as makeup, toothpaste, dishwashing liquid and its Nutrilite vitamin supplements.

Tourism officials say it's one of the largest international tour groups they've ever seen — a propitious sign, they hope, of things to come.

"It's about the future and what we see the Chinese visitors representing to L.A. for the long term," said Caroline Beteta, president and chief executive of the California Travel and Tourism Commission. "Last year a total of 277,000 Chinese visitors spent $402 million in the state. We are seeing substantial growth. They are putting Californians to work."

Among the biggest local winners will be Anaheim, where the visitors will stay to be close to Disneyland and the headquarters of Nutrilite in Buena Park. Nutrilite, Amway's vitamin and nutritional supplement label, is one of its top-selling brands in China. A Nutrilite protein powder, the company says, is particularly popular with Chinese families. A key stop on the visitors' tour will be the Nutrilite farm in Lakeview.

Amway had a rocky start in China, where it set up shop in 1995. In 1998, the Chinese government banned direct sales, calling the business model an illegal pyramid scheme. The company turned things around by opening retail stores and hiring some employees. Its Chinese sales soared.

Sending salespeople from China to Southern California is a big perk, but it will pay off, said Martin Liou, vice president of Amway Greater China, who is based in Taiwan.

"For people working in sales, frustration and rejection are things they deal with every day. They need incentives. A cash incentive is great. But there is something more powerful than that," he said. "A trip to L.A. is a dream for a lot of Chinese people."

Not that making such a dream come true for 13,000 is an easy matter. It requires careful choreography and lots of math.

The 13,000 will arrive for weeklong visits in five waves. Each weekly group also will be split up, so as not to overwhelm restaurants and outlet stores.

Even broken down, though, the numbers are huge by average American tour standards, say experts.

"I was stunned. I have never heard of 13,000 tourists from any one country coming at any one time for leisure travel. That is very exciting," said Lisa Simon, president of the National Tour Assn., a nonprofit trade group based in Lexington, Ky. "It can also be a logistical nightmare, keeping up with your group and making sure you don't lose anybody along the way."

Luckily, organizers from the world's most populous country are used to crowd control.

"This is normal to us. Every year I work with groups that are over 10,000," said Carl Wen, associate director of special events for Amway in China, who has helped plan Amway incentive trips to Australia and Taiwan.

The key, Wen said, is to spread the group out.

"Can you imagine what it's like to have 1,000 Chinese people eating breakfast together in one hotel?" said Wen. "We deliberately broke them up into at least six groups, with a maximum of 300 people per hotel."

Whether Southern California will please Amway enough to be the beneficiary of future economic largesse is unclear. The United States' cumbersome visa regulations, organizers say, already have caused some chagrin.

Each of the 13,000 visitors had to show up for a face-to-face interview with an American visa officer in one of several designated cities in China. And because Amway salespeople come from all over the huge country, getting them to the interviews was in some cases a major challenge. Then 500 Amway applicants got turned down without explanation.

"The fact that people who qualify for the incentive trip can't go is very disappointing to us," said Wen. "We might reconsider our plans to return to the United States for future trips. If we go to Australia, it's 100% approval rate, and they do it faster, cheaper and with no need for appointments and face-to-face interviews."

Amway has, in fact, already announced that next year it will be flying its big earners to Sydney.

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