Firm sees less investment in shops as direct sales ban ends Amway (China) will slow the pace of opening new stores to concentrate on its door-to-door business after the central government announced last week that it was lifting a seven-year ban on direct sales. It runs 168 stores in 141 cities under the government-approved system of 'selling through shops, plus the use of representatives' introduced to end pyramid selling. Amway (China) chairwoman Eva Cheng said lifting the ban on December 1 would enable the company to lower its investment cost because 'we will not be obliged to open shops in every city'. It will instead set up service centres for sales staff and customers. Ms Cheng expects many foreign and local firms to apply for direct sales permits next year, but believes only big players will survive as the regulations impose stringent requirements for market entry. Firms must have at least 80 million yuan in registered capital, pay a 20 million yuan deposit for consumer protection and meet transparency and reporting standards. As well as lifting the direct sales ban, the new regulations also end the requirement that direct sales firms only deal in products made on the mainland. Amway would be able to import goods from its United States parent, said Ms Cheng. Amway (China) currently makes 160 products at its plant in the Guangzhou Economic and Technological Development District, and has R&D facilities in Guangzhou and Shanghai. 'In future, we will have more flexibility in marketing our products,' said Ms Cheng. However, after a spell of explosive growth last year, Ms Cheng expects the company's sales to remain flat this year. For the year to December last year, the company's sales rocketed 90 per cent to reach a total of US$2 billion following a period of rapid store expansion. Ms Cheng said that this year's sales reached US$2 billion on August 31. The company employs a sales force of 180,000, who earn an average monthly income of 1,700 yuan each. Included in the regulations announced last week was the codification of the existing ban on pyramid selling, which provides for fines of up to two million yuan and criminal prosecution. The new punitive code comes into effect on November 1.