The challenge:

As a leader in the direct sales industry, Amway (China) is facing challenges in the era of the internet. The dramatic shifts of the external environment called for a transformation of its business model. As such, Amway (China) has explored and tested new business models such as e-commence, which has four major characteristics – mobility, socialising, big data and cloud computing. Amway (China) needed to upgrade its treasury operations and control mechanisms. Specifically, it wanted to enhance operational efficiency with an innovative, automated, host-to-host collection/payment solution to support its e-commerce business model.

The solution:

Amway (China) carried out measures in two distinct areas:

• Treasury operations:

  Apart from promoting its two main online collection channels (direct debit and Union Pay), Amway developed a mobile collection app “Amway M-Commerce” through which Amway’s customers and sales persons can complete order fulfilments (from ordering to payment) with a few simple clicks. With this new, efficient collection channel, sales collection is grouped to the Amway Headquarter account, enabling integration of Amway’s e-banking system within the Greater China region. Concentration and simplification of payment authorisation can now be realised, improving host-to-host operating efficiency of cash collection/payment.

• Treasury control:

  After analysis and verification of previous projects, Amway launched a Treasury Management System (TMS) to obtain the visibility and controllability of liquidity. Through grouping SWIFT statistics, Amway standardised the bank account statistics within Greater China and output in uniform format, realising cross-area and cross-corporation real-time fund visibility and controllability. By analysing data, Amway can transform cash and investment statistics into key performance indicators, as well as analyse data for informed decision making.

Best practice and innovation:

Amway’s treasury team in China has initiated an innovative, automatic host-to-host collection solution to support the growth of its online sales model. Amway’s online collection channel is now able to accept payments from more than 100 banks and sweep the fund to their headquarter account within 24 hours. It has been able to revolutionise its e-commence business model to better support its business strategy. By applying its C2C model to its e-commence platform, the company has made it easier for customers to do business with them. This has boosted sales revenue and the number of online transactions.

The company’s new online business model relies on innovative treasury operations and control mechanisms. To be more specific, online convenience comes from innovation of Amway’s online mobile collection channels including ‘Amway M-Commerce’ while online security comes from the application of a Treasury Management System (TMS) in financial management.

Amway M-Commerce is a key component of the company’s collection solution. It is an interactive, mobile collection channel which has helped to improve payment collection efficiency, speed up the cash conversion cycle and released available funding, as well as enabled collection data to be easily processed into informative sales and management information.

“E-commerce is much more developed in the United States than it is in China,” says John Huang, Assistant Treasury Manager at Amway (China). “In North-America, e-commence has covered 85% of Amway’s customers. For Amway (China), with the continued effort and innovativesolutions from the treasury team to grow online sales, the sales revenue from e-commerce has reached 20% of total sales, a significant increase from 1% in the previous year. The company is confident of rapidly replicating its success on e-commerce from the United States to China.”