Harimau Capital

Monday February 20, 2012 By LIZ LEE

PETALING JAYA: Amway (M) Holdings Bhd has set four goals this year to strengthen its retail network, increase distributorship among the youth, launch nine new products and delve further into the Malay market.
Executive director Paul Yee said the company would continue to focus on increasing its brand and product accessibility through its retail network strategy across Malaysia.
Amway plans to open another retail outlet in addition to its existing 16 nationwide. “We are looking at a few areas outside the Klang Valley,” he said.
There are also plans to convert more regional distribution centres into retail outlets. Last year, two was converted and Yee said the company planned to convert three or four this year. Amway has nine regional distribution centres in the country.
Yee said that currently, about a third of Amway's 232,000 core distributors were under 35 years old and that this Generation Y was key to its business continuity. A core distributor is a person who has been with Amway for at least one year.
The multi-level marketing company also plans to introduce nine new products.
“There will be six new products from the beauty line and one each from the home care, personal care and nutrition segments. Beauty and health food contribute more than 50% to our revenue and we aim to maintain that figure,” he said.
Yee said the company was also sourcing for more products that would appeal to the Malay community.
“Product is one of the ways (to tap the Malay market). We also go through our distributors in sponsoring new members and sharing the business opportunity. Thirdly is by holding more training and events that cater to this group,” he said.
The company last year introduced incentives for Malay distributors who have hit their sales target to opt for either cash reward or an umrah trip.
Yee said that Amway had been consciously penetrating the Malay market since two years ago, creating brand awareness on media platforms like talk shows and radio programmes that were targeted at this group.
Currently, the Malay market contributes about 20% to the company's sales.
In its 2011 financial year, Amway revenue rose 2.3% to RM735.8mil from RM719.4mil previously while profit after tax was up 14.9% to RM90mil from RM78.3mil.
This year, Yee said Amway aimed for a single-digit growth in revenue.
He said the company had allocated RM70mil for advertising and promotion over the next three years.
In a filing with Bursa Malaysia last week, Amway said it would adopt a new dividend payout ratio, rewarding shareholders with a minimum of 80% of net earnings on a quarterly basis. The company now has cash totalling RM120mil