Amway chairman Steve Van Andel speaks at a press conference on June 4 in Guangzhou, Guangdong Province. Photo: Courtesy of Amway Corporation

Since multi-level marketing giant the Amway Corporation entered China in 1995, it has steadily grown its profits by adapting to the local business environment. A staggering 40 percent of the company's total revenue was earned in China last year amid a revised business plan.

"All markets have their challenges and opportunities, but no market has as many opportunities and challenges as China," Steve Van Andel, chairman of Amway, said during his June 4 visit to the company's China headquarters in Guangzhou, Guangdong Province.

In 2013, Amway's global sales reached $11.8 billion, $4.83 billion of which came from China. The country has emerged as one of the most important markets for Amway, which in 2013 posted year-on-year sales growth of around $500 million.

Speaking at a press conference during his Guangzhou visit, Van Andel was upbeat about Amway's future prospects in China yet acknowledged uncertainties on the horizon.

Opportunities amid challenges

Amway experienced hurdles soon after it expanded into China. It was briefly shut down in 1998 after regulators sought to crack down on sales techniques and fraud at multi-level marketing firms.

The business environment didn't begin to thaw until 2006,when Amway's direct-selling mode was reapproved by regulators, paving the way for normal operations to resume.

"We have come through some of our challenges here as a direct-selling company," said Van Andel, who is also the chairman of the US Chamber of Commerce.

"Usually when we move into a market where the industry is not widely known and there is not too much regulation, what we ultimately need to get is a good direct-selling regulation. That is what has happened through the course of our history here [in China]."

Although some misconceptions about direct selling lingered in the public after 2006, Van Andel is confident that word-of-mouth feedback about Amway's business model has debunked most common myths.

"When you think of a direct-selling business, it is really built on relationships. If you think about how you buy a new product, you probably try a product because a friend of yours tried it and liked it. That's how our business works," he said.

Although the industry is still in its infancy in China, Van Andel said Amway has been a pioneer in its field and proven its values align with those held by domestic consumers.

"We have succeeded to work our way through, and now the direct-selling industry is very vibrant in China. It will continue to be successful," Van Andel said.

Adjusting to economic slowdown

Van Andel's confidence in the direct-selling industry derives in no small part to his optimism about the Chinese economy.

In recent years, some international analysts have readjusted their assessment of China's economic growth. The World Bank Group lowered its projected growth rate for 2014 from 8 percent to 7.7 percent.

One factor influencing this revised forecast is the rising cost of labor in China, prompting speculation that Amway could follow other multinationals by shifting its manufacturing base to other developing countries where labor costs are comparatively lower.

But Van Andel stressed China's easing economic growth hadn't sounded any significant alarm bells for his company.

"To a degree, the slowing Chinese economy is a case of mathematics," he said. "Even though I see growth rates declining a little bit, the overall dollar of the amount of the increases in growth is expanding."

Addressing rising labor costs, Van Andel said that optimizing technology and increasing productivity would offset any negative effects for Amway.

Fostering fruitful relationships

A more pressing concern are material and transportation costs that require close scrutiny by the company when it builds manufacturing facilities, said Van Andel.

"Those are actually more important than labor costs, so we think that China is still a great place for manufacturing," he said.

Amway has continued its investment over the past 20 years across various areas, including administrative and manufacturing facilities. Meanwhile, the company has broadened its product line from its traditional nutrition and beauty base to also include home-care and technology goods.

In more recent years, the rise of e-commerce has also presented new opportunities for Amway.

"Communicating with people and relationships are what our business is all about," he said. "For us, all we need to do is use technology and communicate with each other, and I think this will only further enhance our business."