Best World

[Boon]

Has anyone downloaded any bwl convention videos which have been deleted now ?

Where did you see those videos prior? From their facebook website or youtube?

Anyone else can verify that those videos are gone? Not sure where they come from in the first place. If they are really removing posts its worrisome.

Currently, the biggest worry is the risk of having its direct selling license revoked in China even before they start direct selling. Went digging a bit around but seems like mostly are fines except for one case in news in which the the product is exaggerated. (商务部决定吊销珍奥集团公司直销经营许可证).

Just some information as follows that is interesting on the nine situations a license can be revoked.

直销牌照不是护身符 这九种情况可吊销

Seems like most situations should start with a slap on the wrist in the form of a fine, unless its really serious then a license will be revoked.

Please do your own due diligence.

@ squirrel,

Those videos were on both Facebook and youtube websites.

It seems like video on "Founders Speech by Dora" for the 2016 convention at MBS is gone as well, can anyone find it now? 
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[Boon]

I think the rules are very clear => single layer commission only. It would be too naive to assume that DS companies like BWI is not aware of the rules.........................
 
禁止传销条例 ("prohibition of chuanxiao”)
http://www.gov.cn/zwgk/2005-09/03/content_28808.htm
 
第七条　下列行为，属于传销行为：
　　（一）组织者或者经营者通过发展人员，要求被发展人员发展其他人员加入，对发展的人员以其直接或者间接滚动发展的人员数量为依据计算和给付报酬（包括物质奖励和其他经济利益，下同），牟取非法利益的；
　　（二）组织者或者经营者通过发展人员，要求被发展人员交纳费用或者以认购商品等方式变相交纳费用，取得加入或者发展其他人员加入的资格，牟取非法利益的；
　　（三）组织者或者经营者通过发展人员，要求被发展人员发展其他人员加入，形成上下线关系，并以下线的销售业绩为依据计算和给付上线报酬，牟取非法利益的
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China

Multi-level marketing (simplified Chinese: 传销; traditional Chinese: 傳銷; pinyin: chuán xiāo) was first introduced to China by American, Taiwanese, and Japanese companies following the Chinese economic reform of 1978. This rise in multi-level marketing's popularity coincided with economic uncertainty and a new shift towards individual consumerism. Multi-level marketing was banned on the mainland by the government in 1998, citing social, economic, and taxation issues.[60] Further regulation "Prohibition of Chuanxiao" (where MLM is a type of Chuanxiao, Chinese name of the regulation is 《禁止传销条例》 ), was enacted in 2005, clause 3 of Chapter 2 of the regulation states having downlines is illegal (original text from the regulation '组织者或者经营者通过发展人员，要求被发展人员发展其他人员加入，形成上下线关系，并以下线的销售业绩为依据计算和给付上线报酬，牟取非法利益的。').[14] O'Regan wrote 'With this regulation China makes clear that while Direct Sales is permitted in the mainland, Multi-Level Marketing is not'.[13]

MLM companies have been trying to find ways around China's prohibitions, or have been developing other methods, such as direct sales, to take their products to China through retail operations. The Direct Sales Regulations limit direct selling to cosmetics, health food, sanitary products, bodybuilding equipment and kitchen utensils. And the Regulations require Chinese or foreign companies ("FIEs") who intend to engage into direct sale business in mainland China to apply for and obtain direct selling license from the Ministry of Commerce ("MOFCOM").[61] In 2016, there are 73 companies, including domestic and foreign companies, have obtained the direct selling license.[62] Some multi-level marketing sellers have circumvented this ban by establishing addresses and bank accounts in Hong Kong, where the practice is legal, while selling and recruiting on the mainland.[13][63]

It was not until August 23, 2005 that the State Council promulgated rules that dealt specifically with direct sale operation- Administration of Direct Sales (entered into effect on 1 December 2005) and the Regulations for the Prohibition of chuanxiao (entered into effect on 1 November 2005). When direct selling is allowed, it will only be permitted under the most stringent requirements, in order to ensure the operations are not pyramid schemes, MLM, or fly-by-night operations.

https://en.wikipedia.org/wiki/Multi-level_marketing
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In China:
传销 is illegal.
Having downlines is illegal.

This applies to all forms of distribution models, be it retail, DS or online models etc.

To win the SDA award, one of the criteria, is to have 5-PD-downlines.

Who sets this criteria ? 

BWI, of course.

Who has won the SDA award? 

DMJ, of course.  

Why DMJ and not Eros Hsu or Maggie Goh?

Because DMJ has 5-PD-downlines.

How did DMJ manage to build up 5-PD-downlines over the years operating under the "legit retail model", in a country where having downlines is considered illegal?

By setting having 5-PD-downlines as the qualification criteria for all its regional agents including China, implies BWI is aware of the "illegal activities" in China

By awarding the SDA award to DMJ, BWI is endorsing and recognizing such "illegal activities" carried out by its agents from China, am I not right ?

By awarding the SDA award to DMJ as a success story for others to emulate, BWI is is encouraging more such "illegal activities" to be carried out in China, am I not right?

Perhaps, it is the strategic vision of the management to pay " multi-level-commission' in China even after the conversion from "retail model" to DS model ???????????????????????????????
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[Boon]

Has anyone downloaded any bwl convention videos which have been deleted now ?

Where did you see those videos prior? From their facebook website or youtube?

Anyone else can verify that those videos are gone? Not sure where they come from in the first place. If they are really removing posts its worrisome.

Currently, the biggest worry is the risk of having its direct selling license revoked in China even before they start direct selling. Went digging a bit around but seems like mostly are fines except for one case in news in which the the product is exaggerated. (商务部决定吊销珍奥集团公司直销经营许可证).

Just some information as follows that is interesting on the nine situations a license can be revoked.

直销牌照不是护身符 这九种情况可吊销

Seems like most situations should start with a slap on the wrist in the form of a fine, unless its really serious then a license will be revoked.

Please do your own due diligence.

@ squirrel,

Those videos were on both Facebook and youtube websites.

It seems like video on "Founders Speech by Dora" for the 2016 convention at MBS is gone as well, can anyone find it now? 
______________________________________________________________________________________________________________________

If your business is operating in China then you are required to be compliant in China or risk the serious consequences of non-compliance ................
 
So what are the possible serious consequenses of non-compliance
1)  China operation got shut down immediately by Chinese authority.
2)  DRs Secret is banned in China
3)  DS license revoked.
4)  Fined and/or jailed.
5)  Revenue/Profit plummeted
6)  Share price dropped
7)  Could become target of short seller.
8)  Company get sued by investors for misleading investors.
9)  Litigation costs/ potential “settlement costs’ etc
 
Is it worth subjecting the Company and its shareholders to such risks ?
 
Entered China in 2013 using the export model  – probably desperate THEN as revenue was at the lowest point.
 
Revenue (SGD, million):
FY2011= 41.532 m  
FY2012= 48.218 m
FY2013= 41.081 m
 
But revenue has surpassed SGD 200 m in FY2016 and a DS license has been granted.
 
Is it still worth taking the risks NOW ?

I used to say : “if the “Export/Retail Model” is doing so well, conversion to the DS model could wait”.
 
Now, I would say : “if the “Export/Retail Model” which has been doing so well is completely legitimate, without the built in of any illegal shadow DS activities in it, then who needs a DS license? Why convert?
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[YMPL]

I used to say : “if the “Export/Retail Model” is doing so well, conversion to the DS model could wait”.
 
Now, I would say : “if the “Export/Retail Model” which has been doing so well is completely legitimate, without the built in of any illegal shadow DS activities in it, then who needs a DS license? Why convert?

I am monitoring this stock for a while.

Export model is a stepping stone while waiting for DS license, IMHO. Export model is legal as long as rules obeyed. Export model business is contained within physical stores, while DS model can be expanded via personal contacts. Export model isn't as scale-able as DS model if legally and logically.

Base on the last few quarters performance, PRC growth (mostly export model) outpaced Taiwan growth (DS model), which is not a good news to this stock.

Sharing a view

(not vested)

[investor1]

My opinions:
(1) Best World management has been in the business for few decades already, they should know what they are doing, what is legal and illegal. Their business model needs a lot of exposure so anything is not right in the eye of the law, there is no escape for them. The business they are dealing with is multimillions dollar business.
(2) China market is much bigger than Taiwan market so it is natural if the revenue from China market is higher than Taiwan. 
(3) The different between Export model and Direct Selling model to their top & bottom lines:
- Revenue under Export model will be recorded under the sales price of Best World to their agent while Revenue under DS model will be recorded under the sales price directly to their members.
Agent price will be lower than member price so that the agent can have profit from their selling to member. So by converting to DS model, naturally this revenue to China under DS will be higher than Export model.
- Having DS model enables Best World agent to spread their sales & marketing to their contacts (like all beauty salons under BS will be able to sell direct to their customers). And their 1st tier of customer will be able to sell to their 2nd tier of customer etc etc so they are spreading their networks. However, there is not overriding of commission. So commission only go to the direct seller. But all sales from BS products naturally will contribute to BS revenue.

My humble opinions and pls correct me if i am wrong. Thanks

[Boon]

I used to say : “if the “Export/Retail Model” is doing so well, conversion to the DS model could wait”.
 
Now, I would say : “if the “Export/Retail Model” which has been doing so well is completely legitimate, without the built in of any illegal shadow DS activities in it, then who needs a DS license? Why convert?

I am monitoring this stock for a while.

Export model is a stepping stone while waiting for DS license, IMHO. Export model is legal as long as rules obeyed. Export model business is contained within physical stores, while DS model can be expanded via personal contacts. Export model isn't as scale-able as DS model if legally and logically.

Base on the last few quarters performance, PRC growth (mostly export model) outpaced Taiwan growth (DS model), which is not a good news to this stock.

Sharing a view

(not vested)

Correctly conceptualized and properly executed => it could be a step forward.

Wrongly conceptualized and poorly executed => it could be a big few steps backward. 

Which ways is BWI heading now?
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[investor1]

My opinion:
(1) Best World business has been in this industry for more than a decade and it has since run by both founders themselves. The management should has done their homework after so many years in the industry to know what is legal and what is illegal in the business. BW business is a multimillion dollars business and this requires high exposure of their products and company to the market in order to gain confidence in consumers. So anything is illegal will surelly be found out immediately by the market. 
(2) China market is definitely much bigger than Taiwan by many folds so it is natural if the BW revenue in China under Export rate outgrow Taiwan under DS model.
(3) BW under Export model: revenue derived from sales done to agents only,
BW under DS model: revenue derived from saled done to BW members.
-The sales rate for a same product sold to agent is definitely lower than to BW members so the agent can earn profit from the agent's selling to their customers.
- Under DS model, BW's members (including those spa salons, beauty shops) sells BW products to their customers and they earn commission from it (this member we call them 1st tier sell to 2nd tier). Then 2nd tier now sell BW products to 3rd tier. There is no override commission. But all sales from either tier contributes to BW top line.
(4) Under DS model in China, BW member can promote their products widely in China with all products have already have their own registered number.  BW members are promoting BW products following BW marketing strategy to focus on their products usages and benefits to consumers. By doing this it should bring higher revenue to the members.

Above just my opinions and it mighr be wrong. Thanks

[YMPL]

I used to say : “if the “Export/Retail Model” is doing so well, conversion to the DS model could wait”.
 
Now, I would say : “if the “Export/Retail Model” which has been doing so well is completely legitimate, without the built in of any illegal shadow DS activities in it, then who needs a DS license? Why convert?

I am monitoring this stock for a while.

Export model is a stepping stone while waiting for DS license, IMHO. Export model is legal as long as rules obeyed. Export model business is contained within physical stores, while DS model can be expanded via personal contacts. Export model isn't as scale-able as DS model if legally and logically.

Base on the last few quarters performance, PRC growth (mostly export model) outpaced Taiwan growth (DS model), which is not a good news to this stock.

Sharing a view

(not vested)

Correctly conceptualized and properly executed => it could be a step forward.

Wrongly conceptualized and poorly executed => it could be a big few steps backward. 

Which ways is BWI heading now?
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How about correctly conceptualized but poorly executed? It could be a warning (the best), or banned temporary to rectify (at worst). I don't think it will be a revoke of license, IMHO.

[YMPL]

My opinion:
(1) Best World business has been in this industry for more than a decade and it has since run by both founders themselves. The management should has done their homework after so many years in the industry to know what is legal and what is illegal in the business. BW business is a multimillion dollars business and this requires high exposure of their products and company to the market in order to gain confidence in consumers. So anything is illegal will surelly be found out immediately by the market. 

https://www.forbes.com/sites/samanthasha...1c144333f6

If Nu Skin, which has similar decades of experience and few US$ billion sales globally, had flopped in China, why not for BWI?

(2) China market is definitely much bigger than Taiwan by many folds so it is natural if the BW revenue in China under Export rate outgrow Taiwan under DS model.
(3) BW under Export model: revenue derived from sales done to agents only,
BW under DS model: revenue derived from saled done to BW members.
-The sales rate for a same product sold to agent is definitely lower than to BW members so the agent can earn profit from the agent's selling to their customers.
- Under DS model, BW's members (including those spa salons, beauty shops) sells BW products to their customers and they earn commission from it (this member we call them 1st tier sell to 2nd tier). Then 2nd tier now sell BW products to 3rd tier. There is no override commission. But all sales from either tier contributes to BW top line.
(4) Under DS model in China, BW member can promote their products widely in China with all products have already have their own registered number.  BW members are promoting BW products following BW marketing strategy to focus on their products usages and benefits to consumers. By doing this it should bring higher revenue to the members.

Above just my opinions and it mighr be wrong. Thanks

The China market isn't for whole China, but a city of China. It should be comparable to Taiwan market. 

[Boon]

I used to say : “if the “Export/Retail Model” is doing so well, conversion to the DS model could wait”.
 
Now, I would say : “if the “Export/Retail Model” which has been doing so well is completely legitimate, without the built in of any illegal shadow DS activities in it, then who needs a DS license? Why convert?

I am monitoring this stock for a while.

Export model is a stepping stone while waiting for DS license, IMHO. Export model is legal as long as rules obeyed. Export model business is contained within physical stores, while DS model can be expanded via personal contacts. Export model isn't as scale-able as DS model if legally and logically.

Base on the last few quarters performance, PRC growth (mostly export model) outpaced Taiwan growth (DS model), which is not a good news to this stock.

Sharing a view

(not vested)

Correctly conceptualized and properly executed => it could be a step forward.

Wrongly conceptualized and poorly executed => it could be a big few steps backward. 

Which ways is BWI heading now?
_____________________________________________________________________________________________________________________

How about correctly conceptualized but poorly executed? It could be a warning (the best), or banned temporary to rectify (at worst). I don't think it will be a revoke of license, IMHO.

“Strategically, we confer these distributors with relevant rank based on their sales achievements. Although their qualification mechanisms are different, we chose to recognize their achievement together with BWL leaders from other markets from day one (which is not difficult). This would be just one of our several deliberate efforts to inculcate them with the attitude of a direct selling leader as early as possible, so we could integrate them as seamlessly as possible into our direct selling operations before converting our China business into Direct Selling. As a late mover in applying for our license, we have had the opportunity to refer to other companies as case studies for ourselves. As such, our strategy is not only to obtain our license within the shortest period possible, but also to address integration from the onset to ensure undisrupted transition moving from a retail model to a full fledge direct selling company when the time comes.”
 
ðRestricting multilevel commissions takes a pretty big bite out of the motivation that we usually see driving distributors. Getting paid for multiple levels means having the ability to steadily grow your income by changing your efforts toward leadership rather than constantly upping the amount of time you put into personally making sales. Chinese distributors admittedly get a bigger chunk of each sale they make, but they have to make each of those sales personally. Furthermore, if we look at this equation from a corporate perspective, a company’s ability to craft compensation strategies which incentivize specific, desired distributor behaviors, is nil under these restrictions.
 http://mlm.com/whats-going-on-in-china/

ðBWI has a strategic vision of making delierate efforts to inculcate its China agents the attitude of a direct selling LEADER (=> implies multi-level-commission based) as early as possible, so that we could integrate them into our direct selling operations (=> implies multi-level-commission based) before converting our China business into direct selling (single or multi-level-comission based?)

ðIf it is the intent of the mangement to ultimately convert its China business into a multi-level-commission based DS model, then this “deliberate  early integration efforts” would work. But these are illegal acts.

ðIf it is the intent of the management to ultimately convert its China business into a single-level-commission based DS model, then this “deliberate early integration efforts” would be counter-productive.

=> Is it conceptually correct to make recognition and awards to agent who have achieved sales "illegally" ? 
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