Amway Indonesia shows how philanthropy works in business

Andi Haswidi, The Jakarta Post, Jakarta

On June 26, Indonesia's biggest multilevel marketing company, Amway Indonesia, celebrated its 15th year of operation in the country.

Last year the company booked 30 percent growth in total sales, which surpassed the 25 percent growth in 2005, and lifted the number of its distributors to more than 300,000.

To mark its anniversary, Amway Indonesia held the two-day Amway Product Expo and National Convention at the Jakarta Convention Center last week. The event was attended by Amway Corporate chairman Steve Van Andel, the son of Amway founder Jay Van Andel.

Talking to The Jakarta Post, Andel shared his hopes for the Indonesian market and for philanthropy.

Question: The government may impose a new regulation that demands foreign multilevel marketing companies (MLMs) establish a production line in the country. Your comments?

Answer: Our investment is not really determined by regulations but more by the demand from our consumers, what their needs are and what their interests are. If they are interested in us selling rice, which they are, then we do it just like in our partnership program with Indonesian small and medium enterprises.

If there is a need to do something in order to help our consumers here, would we invest in Indonesia? We certainly would look at it. It is not something we would say no to.

However, investment does not always means building factories. It can come in various forms such as in human capital.

Manufacturing is one of the aspects, but it doesn't mean we have to invest in it. We do a lot of other investment, opening this new office is also investment.

What we invest in depends on what is needed in the market, at this moment, and in the future.

Can you talk more about the partnership with Indonesian SMEs?

It's just an opportunity that we had in Indonesia, working together with PT Usaha Kita Makmur Indonesia, who came to Amway to seek potential to develop SMEs in Indonesia.

Most of the products are food-related products. The target market that we are trying to help is the farmers and their families. We made sure that the farmers get the certainty of market, price and crop. And we make sure they get development in techniques and skill so they will be able to farm better.

We purchase rice, for example, and we purchase at a higher price than the market price. The same is true for corn. We guarantee that they will buy the crop and at a higher market price too. The SME products take up about 1 percent of our total sales.

Considering it's such a small portion of sales, what's the main reason behind the partnership?

We see that the concept is very closely related to the vision and mission of Amway, globally, because we want to help people to lead a better life.

For us, it really goes back to the foundation of our business. Because when our business was started by my father 50 years ago, his aim was to help people to lead a better life.

I consider him as a philanthropist. He was somebody who was very interested in helping out people.

He said that wherever we do business, we would like to share with the communities that we live in. We actually started doing social responsibility projects before we actually started the business. Because it is a part of who we are and it is the right thing to do.

Is that the secret of Amway's success in Indonesia?

It's not much of a secret really. Our success had to do with two things, the people and the products. The people are easy to see, all you have to do is see our employee base and you can see the expertise there.

And you can look at our distributor base and see the talent that we have in sales. I think the people is half of the equation, the other half is the products themselves.

What can you say about Indonesian distributors, in the sense of how they compare to their counterparts in other countries?

The Indonesian distributors are fantastic distributors. I have had the chance to go around different markets in the world and see all different sorts of people, but you can tell even by the growth numbers that the perspective of Indonesian distributors on what it takes to be an entrepreneur, the standard is right up there with the rest of the world.

Where does the Indonesian market sit among the regional countries?

In the world Indonesia ranked as number 14 out of 55 countries. So, that's not a bad ranking. When it comes to new people entering the business, Indonesia is number seven in the world. Out of the top 10, seven are Asian countries.

We see the growth of Amway globally everywhere is the same.

Well, we have a target of 20 percent this year, and that comes after the 30 percent growth last year. Amway Indonesia has been growing very steadily. It's not something that takes off like a rocket and then comes down like a rocket.

Globally, we gathered total sales value of US$6.3 billion last year.