This solution focuses on the challenges of cross-border funds transfer and customs clearance. With the solution they have implemented, Amway China has established the benchmark for a market-leading business model reform for direct sales in China. Products purchased over the e-commerce platform are now received in just T + two days.
Photo of Deborah Mur, Citi collecting the award on behalf of AMWAY (China) Co., Ltd with Sophie Jackson.
Senior Treasury Manager
Amway (China) Co., Limited manufactures and distributes personal care, home care, home technology, nutrition and wellness products. It offers its products through outlets in China. The company was founded in 1992 and is based in Guangzhou, China with regional offices in Beijing and Shanghai, China. Amway (China) Co., Limited operates as a subsidiary of Amway Corporation.
in partnership with
The slowdown of domestic consumption growth and stagnant overseas demand are placing Chinese companies under unprecedented pressure. Against this backdrop, the fast growing e-commerce sector, particularly cross-border e-retail, has become the exceptional growth strategy, receiving strong support from the Chinese government.
Seizing the opportunity to capture market share, Amway initiated its own cross-border e-commerce retail platform in 2015, recognising that its success would require a considerable amount of sales to achieve success. The expected growth of sales means increased volumes of cross-border collections to process and reconcile for Amway China.
Key features of the solution are as follows:
Collection for online payments
By simplifying the online payments to a “one-click” button on both Amway Net (accessible on PCs) and Amway Hub (accessible on mobile), the payment is auto-transferred from the end customer’s designated bank account to Amway China’s HQ account. Once the payment is received, this triggers a notification for goods delivery from Amway US’s warehouse in Hong Kong. At the same time, a detailed report summarising the collection information, purchase order information and courier numbers is auto-generated.
Amway’s new online collection channel is able to accept payments from more than 100 banks across the globe and is able to sweep the funds into Amway China HQ account within 24 hours. The solution not only improves the efficiency of collections, but also speeds up Amway China’s cash conversion cycle.
Goods delivery and custom clearance of small and diverse parcels
By setting up a customised e-platform together with Chinese Customs department and China Union Pay, Amway China was able to satisfy customs requirements to monitor all upcoming imports of small parcels which require customs clearance. The auto-generated detailed report summarising collection information, purchase order information and courier numbers are data points accessible through the platform. This pre-reporting process has achieved almost a 100% success rate for customs clearance.
Consolidated cross border settlement on behalf of end customer
By proactively communicating with Chinese regulators, Amway China was able to receive consent to perform bulk cross-border payments on behalf of the end customer to Amway US, as opposed to deal by deal. This has reduced the number of cross-border transactions from over 200,000 to only two transactions per month, thereby reducing the cross-border payment fee by around 80%, as well as optimising resources. Given the transaction nature of goods and vis-à-vis the auto generated report, which shows all information related to collection, purchase order and custom clearance, the cross-border payment supporting documentations such as the invoices, purchase orders, and custom slips for each signal transaction are waived. Moreover, Amway’s cross-border RMB settlements largely support RMB internationalisation, a strategic goal for China.
“Cross border e-commerce is one of the most important areas for Amway China, winning such a well-known award is a great recognition for our efforts in online sales promotion.”
John Huang/Sylvia Yao, Amway (China)
Best practice and innovation
By implementing a solution to tackle the numerous issues in cross-border funds transfers and customs clearance, Amway China’s treasury team was not only able to support Amway China’s cross-border e-commerce sales initiative, but also set the benchmark for a market-leading business model reform for direct sales in China. The solution enabled each individual consumer in China to directly buy Amway US products on Amway China’s cross-border ecommerce platform, and receive purchased products in just T+2.
John Huang, China Treasury concludes: “The breadth and depth of the reach Amway China treasury team made is a game-changer for the industry in China.”
Enhanced customer experience.
Reduced number of cross-border transactions/associated payment fees.
Customs clearance improved.
Key learning points
Customer experience is the life blood of the direct selling industry.