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SCMP Reporter

It is a household name worldwide, one of the United States' biggest privately held corporations and one of the most successful direct-marketing businesses in history. It has also been described as a cult, a pyramid scheme and a mass movement that repays the vast majority of its followers more in inspiration than in cash.

 Waiting for the billionaire co-founder of Amway to arrive, I half-expected to meet the hypnotic stare of a bible-belt television evangelist.

 In the event, 73-year-old Richard DeVos has more the air of a kindly grandfather, whose modest dress and chirpy manner sit oddly with his status as one of the richest, most powerful men in the US.

 He has reason to be cheerful. Having virtually retired from Amway due to ill health in the early 1990s, Mr DeVos has gained a new lease of life following a heart transplant two and a half years ago.

 'I'm alive and doing pretty well, although I'm still an old guy,' he said.

 Making his first visit since 1991, Mr DeVos was in Hong Kong to rally the Amway faithful before heading to Guangzhou to address 3,500 distributors followed by a 10,000-strong meeting in Shanghai.

 Founded in 1959 by Mr DeVos and school friend Jay Van Andel, Amway has become a byword for door-to-door sales of everyday household products such as soap, cosmetics and vitamins.

 It sounds mundane. It is mundane. Of course, what Amway is really selling is not soap but hopes and dreams: the hope of freedom and financial independence for its army of self-employed distributors.

 By 1998, Amway had three million distributors in 80 countries and turnover of US$5.7 billion.

 Along the way, Mr DeVos became America's 23rd richest man with an estimated net worth of $3.2 billion in 1996, according to Forbes magazine, although this had slipped to 132nd and $1.8 billion by last year.

 The Amway message, with its promise of riches for those with no capital but a willingness to work hard, is a particularly potent one for the mainland, where reform increasingly is forcing a populace weaned on and stifled by 50 years of state-firm conformity to fend for themselves.

 However, a rash of pyramid schemes and other scams that sprang up to exploit this demand alarmed Beijing and led it to impose a blanket ban on direct-selling in the middle of 1998.

 The ban wreaked havoc on Amway's mainland operations, with the number of distributors plunging to 43,000 from a peak of 80,000 before the ruling.

 Beijing subsequently allowed the company to reopen, but on condition it restricted its operations to physical retail premises.

 Mr DeVos is measured and careful when speaking of the ban, professing sympathy with and understanding of the government's actions while stressing the probity of Amway's operations.

 'Some people, primarily Chinese companies, were really abusing the system,' he said.

 'But we've been all through those abuses, you see, and the Amway plan was always geared to protect against those.'  He denied the abuses showed the mainland was not ready for direct selling.

 'I think what happened in China shows you how ready they are,' Mr DeVos said.

 'Those people, many of whom didn't have much money, were ready to try and get into something for themselves. That's why they got taken, because they weren't careful.'  He did not accept that retail stores defeated the object of the direct-sales model, which is driven by personal contacts.

 'It's only a question of how you drive the business to the outlet. You can drive it through advertising, and give the money to the advertising agencies, or you can give the money to the individuals and they take the money and they drive it to the outlet.'  With distribution channels being changed rapidly by the information-technology revolution, Amway is being forced to rethink its business model.

 The company spent $30 million and had 300 people working for a year to put itself up on the Web last year. Recruiting has since taken off, according to Mr DeVos, although only time will tell whether the depersonalised world of the Internet is a killer or an enabler of Amway's business.

 An active Republican supporter in the US, Mr DeVos apparently feels no discomfort in doing business in the mainland, where he was expecting to meet government officials.

 'They have to be reassured of what we're doing,' he said.

 'That's part of our mission, to reassure them that we're not trying to screw up their government, we're just trying to help their people make a few extra bucks in their own way.

 'We're not political. I'm politically active in the US, but we treat ourselves in every foreign market as guests, and that's all.'  Beijing is not the first government to have become suspicious about the way Amway operates.

 The US Federal Trade Commission investigated the company in the 1970s but concluded in 1979 it was not an illegal pyramid.

 Nevertheless, Amway has continued to attract critics, who have used the Internet to spread their message: Amway meetings resemble religious revivals, families have become estranged, distributors higher up the chain lie about the potential earnings and have a lucrative sideline in selling motivational books and tapes to new recruits.

 That Amway takes the criticism seriously is evidenced by its own Web site, which contains sections such as 'I've heard rumors that Amway is a cult. Is this true?' and 'What is the difference between Amway and illegal pyramids?'  To listen to Mr DeVos, the Amway ethos is a piece of modest, homespun American virtue.

 'We decided if we made a real high-quality product there were people who would like to have it brought to them in a simple form,' he said.

 'Now, is that 90 per cent of the population? No, more like 10 per cent. But we'll take that 10 per cent and we're happy to have it. That 10 per cent for us is a huge number.

  'This is a niche, it's a little group of people who are happy to buy from their friends and make a living at it.'  His response to the criticism has the feel of having been repeated many times.

 'I've been hearing it ever since I started. Any company like ours that has people who are enthusiastic and trying to stand up for this great company or this great guy can be branded a bit of a cult,' he said.

 'But a cult is a brainwashing, controlling, dominating thing, and we don't brainwash. Our people come to meetings because they want to come, they're positive.

 'Our control on them is virtually non-existent. We try to teach them to have a good attitude, think well of themselves, but that's the extent of it.'  Did it concern him that some of the mud might stick?  'It sure does. Absolutely it bothers me. I can't do anything about it. All I can do is keep spreading the good word of what Amway really is and hope we can knock a little bit of that mud off.'  Mr DeVos has enjoyed proving his critics wrong since he began in direct selling with a vitamin-mineral product called Nutrilite 50 years ago.

 'The whole medical community ridiculed us, said we were quacks and we were crazy and we were trying to sell people something they didn't need,' he said.

 'And in that 50 years, the whole world decided vitamins and minerals were pretty important.

 'And so with our marketing plan. When we started it, it was ridiculed for being a pyramid and a cult and whatever other names people have, but it's now 40 years later and we are a $6 billion a year company, we have three million people in the world doing business with us.

 'So we have proven that this marketing method works and that it works in a pretty big way, and that it helps a lot of people.

 'So I guess we'll just have to take the cheap shots and keep moving forward. A lot of people are imitating us and that only shows that what we are doing must be worth something.'  Whether Amway or its detractors are right, it is clear that the vast majority of distributors make little more than pocket money  According to Amway, about 45 per cent of distributors in the US make less than $500 a year, and another 45 per cent make less than $5,000.

 A devout Christian, Mr DeVos believes he was reprieved by God to continue his mission.

 Having been gradually dying for about six years, he became the world's second-oldest heart transplant patient in London in 1997. His donor, a 41-year-old woman, is also living, having simultaneously received a heart and lungs transplant.

 'I went into my operation with total faith,' he said.

 'If God wanted me to live, fine. If he wanted me to die I was ready to die and meet my Maker. I was totally at ease - as at ease as you can be.

 'My mission is to be a person who encourages everyone that I come into touch with and I guess that's my goal. That's why I think I'm here.'  That extends into both the business and sporting worlds. Mr DeVos is the owner of the Orlando Magic basketball team, as well as a women's NBA team and an ice hockey team.

 There is no doubting his conviction. Between the levity and the saccharine sound-bites - 'I come because of my great love for the people of Hong Kong and Chinese people', was how he explained his presence in the SAR - Mr DeVos is deadly serious when it comes to the subject of Amway's business.

 As we left the interview room, he drew me aside and in a low voice gave me a brief but intense lecture on the quality of Amway's products, of which he insisted I take a sample.

 My last sight of him was at the reception area of the firm's Causeway Bay offices.

 'Did you get him those goodies!' he shouted to his assistants, as I got in the lift holding a box of soap. He was posing for photographs, beaming proudly beneath the Amway logo. A true believer.

Richard DeVos was born in 1926 in Grand Rapids, Michigan, and served in the US Air Force from 1944-46.

 He then began a flying school and air charter service with school friend Jay Van Andel.

 In 1959, they founded Amway, which now has more than three million distributors in 80 countries, making it one of the world's biggest direct-selling companies. In the year to August 31, 1998, Amway had US$5.7 billion in sales.

I'm alive and doing pretty well, although I'm still an old guy 



Amway's co-founder puts his controversial case to Matthew Brooker