Transform to survive: MLM firms LifeVantage, Herbalife, Amway reveal strategies for success amid COVID-19 disruptions

By Tingmin Koe contact

- Last updated on GMT

MLM firms are adopting more digital selling tools in the wake of COVID-19.  ©Getty Images
MLM firms are adopting more digital selling tools in the wake of COVID-19. ©Getty Images

Related tags: MLM, LifeVantage, Amway, Herbalife, COVID-19

The COVID-19 outbreak is calling for MLM businesses, which traditionally rely heavily on face-to-face interaction, to transform its business by adopting new sales channels as social interaction needs to be kept to a minimum.

These channels can include digital tools such as online store, social media such as Facebook, Instagram, web conferences, or even adopting a subscription-based model.

NutraIngredients-Asia ​approached MLM companies LifeVantage, Herbalife, and Amway to find out more.

Moving to digital

The Utah-headquartered LifeVantage said the outbreak had highlighted the importance of adopting a hybrid method, consisting of both in-persons and digital interaction.

“The COVID-19 has created a situation where we can see the benefit of going in a hybridised direction,”​ CEO Darren Jensen said, referring to the use of digital tools on top of in-person interaction.  

The company invested millions in developing digital assets in the area of artificial intelligence (AI), apps, and machine learning four years ago, initially developed in response to natural disasters such as earthquakes and hurricanes.

It has also experimented with conducting product launches online, which Jensen said could double up on the ability to generate sales since the distributors were reaching out to a different audience.

Depending on the regions, its product distributors in different countries are digitally engaged to varying degrees.

He said that about 80% of the distributors were using online tools in the ANZ markets. In Taiwan and Hong Kong, there was more in-person interactions due to the presence of product showrooms.

In China, its products are only sold via e-commerce.

For Herbalife, many of its members are using social and digital channels to reach out to the customers for regular interaction and knowledge sharing on immune-boosting tips.

“The company has developed various digital-friendly education training material for members, so that they themselves can continue to share good nutrition knowledge with customers via video conferencing platforms,” ​said Stephen Conchie, SVP and MD of APAC.

Similarly, for Amway, the company said it was increasing online communications and training for the business owners, to help them continue to trade.

“We are asking many employees in the U.S. and impacted markets to work from home and are providing extra digital support to help them connect virtually,”​ the company said in a statement. 

Across the global, all of its events from now untill June have been cancelled or postponed.

Subscription model as safety net

LifeVantage added that it has also put in place a subscription-based model as a “safety net” ​across APAC, Europe and the US.

“This created a safety net where business remains solid amid volatile situation,”​ Jensen said.

In fact, the model has generated at least 75% of the company’s entire monthly sales. 

Handling supply and production hurdles 

Amid a greater demand for the immune-boosting supplements, the companies said they have been working around inventory management and production to ensure consumers’ needs were met.

For Herbalife, there was an increased demand for immune products, including Herbalife Nutrition Formula 2 Multivitamins Complex, Roseguard, and Mega Garlic Plus.

To continue with business, the company said the key was to respond quickly through its inventory management, order taking, and product delivery according to regulations the local authorities have implemented in response to COVID-19.

Our employees have the ability to take product orders from home through online platforms or the phone. We also can make payments to our distributors from home,” Conchie said about the order taking arrangements.”

In terms of product delivery, the company said it could service distributors from more than one warehouse in several countries, which helped to keep operations smooth.

For LifeVantage, the company revealed it has ample inventory – about a 10-month long stocks on hand globally for its main products. Its flagship products include Protandim Nrf2 for anti-ageing benefits.

Amway said that to meet the high demand for products such as air purifiers, nutritional supplements and disinfecting household cleaners, it would continue the manufacturing and distribution of these products on an update on March 18.

Re-adapting

Many of the changes that have been initiated by MLM companies were already underway, on a smaller scale, in response to changes in consumer needs and consumption patterns. 

We earlier reported that some direct-selling firms in China have moved to the cross-border e-commerce and social commerce on WeChat to carry its business.

Some examples include Infinitus​, which have established its e-commerce business last September, where 32 of its products are available for sale.

Similarly, Amway China has also started its CBEC and mobile social commerce operations.

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