Best World

(22-02-2019, 09:49 AM)Squirrel Wrote: It would be a good data point to deliberate on whether to buy the counter again. I have seen how they have grown the Taiwan revenues before in the heydays. The rate of growth is very possible in China if the same direct selling model is being implemented there.

However they are claiming a franchise model whereby cash is paid upfront for inventory. I don't really think they can claim that they don't know how the distributors there goes about business since these distributors are recognised in their annual conventions.

So in short, I find that their growth can only be justified by direct selling model. And yet their direct selling license only applies to the Aurigen series of health supplements, not the skincare products. If somehow all this can be explained as a legal and legitimate business model as per declared in the statement, that would be good for the investors.

I believe BW works very closely with their distributors(which they select very carefully), and there is a long waiting list in China. However, that doesn't mean lapses will not happen and yes, we are not able to accurate gauge the actual demand.

I have pondered over a long time over the same concerns on their growth since they are not using the normal traditional direct selling in China for their DR pdts, i.e. payment of multiple layers of commission. In my view, the growth in China is attributed but not restricted to the culture(i.e. guanxi form of doing business), density of the population, and the scale of their population. It seems to be pretty much the case for Nuskin's success in China and other for one incident in the past, Nuskin doesn't have legal issues by and large. But BW is more cost efficient(and smaller scale) because they do not directly employ sales employees.

On the issue of ID, personally I feel BW mgmt is targeting directors who can contribute insights to the China mkt, given that most of the BW mgmt staff are homegrown in-house, i.e. learn abt China mkt by trial-and-error based on BW pdts. Mr Chan used to spend quite some time in China in his past capacity working for SG govt, but I feel Chester shd be able to contribute more based on his China commercial experience. 

On a side note which may/may not be relevant, I thought it was quite embarassing for Mr Chan to be late for last year's AGM. I think it was Dora who announced to the shareholders that he wld be late and the mtg started with a glaring empty seat.

IV【“全美世界”被指涉传 公司律师称没做直销】

https://mr.baidu.com/7arndly?f=cp

Best World has posted its response.

http://bestworld.listedcompany.com/newsr...38SA.1.pdf

The article posted in Boon’s links has even more serious rumors about the company being involved in MLM and pyramid 拉人头 schemes.

In short, the company basically has not been involved in direct selling at all. A very clear line has been drawn. Once they are tied to it, that’s the end I suppose. What walks like a duck, sounds like a duck, looks like a duck is a...

There has been too many posts showing in this thread the China distributors who are showcased in their annual conventions. Taiwan personnel in China? (https://bwlgrace.pixnet.net/blog/post/20...f%e3%80%82) And lastly, the rate of growth of its cosmetic line is too explosive. Not sure there is any cosmetic product that grows at the same rate. Would be great if someone can show an example.

I am not sure why they don’t name their legal counsel which is one of the largest in China. If they are banking on technicality to say they are legal, might as well name the counsel. And they have quite squarely limit their legal liabilities from the franchisees. 

“The Franchisees would purchase the Products directly from BWL China instead of the third- party Import Agents, and would continue to be independent third parties (in relation to the Group) and take ownership of the Products upon purchase.”

I am personally still not convinced. Good luck to those vested. Each to their own.

Would the regulatory risk of conducting an MLM business not be removed when BW transitioned from a 'direct sell' model to an 'export' model? Why was there a need to transition again to a 'franchise' model?

How could BW have transitioned from an 'export' model to a 'franchise' model so seemingly effortlessly? While BW may have earned higher gross margins on cutting out the import agent, would it not also have incurred higher capital expenditure to perform the sales/logistics function of an 'exclusive distributor?' Its 9M18 cashflow statement showed capex of only 1.6m.

How is it possible that BW can demand cash on delivery of its goods? This must be one of the rare occasions where credit is not provided by the 'exclusive distributor.' And it is only so because of its very low COGS. Coupled with its low popularity on e-commerce platforms, it seems that they are selling a low quality product. So who are the people who are buying these low quality product?

I am inclined to believe that BW is not doing anything illegal, in its operations and financial accounting. But this does not mean that nothing untoward may happen. It should be clear that the 'franchisees' are the ones who are supporting the sales and cashflow of BW. It is, however, not so clear how these franchisees operate, and whether they can sustain the level of purchases they are making from BW. That said, China is a huge market, which means plenty of buyers/believers of BW's goods/dream.

But since the 'franchisees' are now performing the most difficult of tasks, would they not move up the value chain and create their own product to sell, if they are such excellent marketeers?

(24-02-2019, 09:49 AM)karlmarx Wrote: Would the regulatory risk of conducting an MLM business not be removed when BW transitioned from a 'direct sell' model to an 'export' model? Why was there a need to transition again to a 'franchise' model?

How could BW have transitioned from an 'export' model to a 'franchise' model so seemingly effortlessly? While BW may have earned higher gross margins on cutting out the import agent, would it not also have incurred higher capital expenditure to perform the sales/logistics function of an 'exclusive distributor?' Its 9M18 cashflow statement showed capex of only 1.6m.

How is it possible that BW can demand cash on delivery of its goods? This must be one of the rare occasions where credit is not provided by the 'exclusive distributor.' And it is only so because of its very low COGS. Coupled with its low popularity on e-commerce platforms, it seems that they are selling a low quality product. So who are the people who are buying these low quality product?

I am inclined to believe that BW is not doing anything illegal, in its operations and financial accounting. But this does not mean that nothing untoward may happen. It should be clear that the 'franchisees' are the ones who are supporting the sales and cashflow of BW. It is, however, not so clear how these franchisees operate, and whether they can sustain the level of purchases they are making from BW. That said, China is a huge market, which means plenty of buyers/believers of BW's goods/dream.

But since the 'franchisees' are now performing the most difficult of tasks, would they not move up the value chain and create their own product to sell, if they are such excellent marketeers?

BW has repeatedly emphasized that the company has been doing things legally. From the impression of the clarification made, this assertion does not seem to extend to their distributors and franchisees? Just doesn’t make sense growth wise. If the beauty product is so good, would it be languishing in all the other countries that once seen explosive growth on the direct selling model?

权健之后，女大学生深陷全美世界（一）

http://shxwdc.com/new/xw/1339.html

广东女大学生弃学参与全美世界直销被指违法

http://www.315online.com/zhixiao/video/392472.html

(24-02-2019, 04:21 PM)Squirrel Wrote: 广东女大学生弃学参与全美世界直销被指违法

http://www.315online.com/zhixiao/video/392472.html

Interesting, all the links (China reports) are recent, after the BT report.

(24-02-2019, 07:45 PM)Millionfaith Wrote:

(24-02-2019, 04:21 PM)Squirrel Wrote: 广东女大学生弃学参与全美世界直销被指违法

http://www.315online.com/zhixiao/video/392472.html

Interesting, all the links (China reports) are recent, after the BT report.

Not really, these are Jan articles. But that’s not to say the articles must be true. Though the pictures do make them look more convincing.

It is pretty common practice for franchees/ retails to pay for the goods received, and return/ offset the unsold/ eg. expired goods on next delivery invoice