Best World

[chialc88]

Thanks VIChris and I had decided to stop thinking about bwl.

This should set myself free and start to look at other more interesting things in life.

Having says that - it is my choice and of course, I know what I want.

As for valuebuddies Boon, don't care what others says.
Just do what you wanted to do.
However, promise me, make sure you enjoy what you're doing.
Otherwise, just move on to something else more enjoyable.

ok?

WARNING: long post. Skip, if you can't tolerance my nonsense.

---

3 points:
1. what's wrong with bwl
2. what's the right things to do
3. what's the cue to watch for re-entry (if any)

#1. what's wrong with bwl?
High level, nothing wrong.
Biz is growing (and numbers will still be better moving forward)
China biz will continue to grow (may be slow in next Qtr, but sure pickup one).
Two questions, need to be answered:
1. Does growing biz implies higher share price? Would there be a case that number is good but stock price continue to decline?
2. Is the growth sustainable? In theory and in short term (other than immediate Qtr), numbers should be growing. Question is for how long?
   (don't understand my questions? c.f. d.o.g post earlier)

Q: If biz is growing, why is there a concern about sustainability and stock price?
Well, it's because bwl is not operating as it suppose to be in China.
It lack the DS license to sell DR's Secret.
Current 663 system is clearly MLM, without any doubt.
Don't need to clarify with bwl or notify the authority.
DR's Secret success is build on MLM. full stop.

Q: Erh, CHIALC88, You're wrong. DR's Secret in China is operated under "Export Model".
That's right. Everybody know it's "Export Model". I did not says it's not.
However, I says that DR's Secret success is build on MLM.
Roger so far?

Q: Erh, what?
I meant on paper, it's know as "Export Model".
In practise, it's MLM.

Q: Erh, so what? Other company also do that. bwl spend so much time to study the authority limits.
And then?
Operating MLM under authority limits means what?

Q: Means, bwl can operate DR's Secret legitimately and within China law.
Ai yo. One more time, I repeat.
On paper DR's Secret is "Export Model", somehow it's operate as MLM.
And, you says so long it's within authority limit, then it is ok?

Q: Yap. That's what I says.
Ai yo. I don't know what to says.
You do what you want to do.

Q: Seriously, bwl also have DS license and they are moving DR's Secret to DS license model.
YES! Now you're talking.

Q: (smile) Of course, we all know that DR's Secret operate under "Export Model" is a bit fishy.  But, we have good plan to move it to DS model and so more legitimate.
Right! Now we're talking.

Q: (smile) With DS model, DR's Secret will growth tremendously and we can take on the big boy and make ourselves a household brand in China.
Correct. Exactly my point too.

(Happy ending. Both hold hand together and go for coffee break.) 

---

#2. What's the right things to do?
The right things to do is to focus on getting DR's SECRET into DS licensing model.
It's extremely difficult but definitely worth pushing hard.

In additional, we must make use of the recent crack down, to access and generate more awareness to distributors, sellers and consumer.
Let them know what's the right things to do.
Emphasis on the products instead of recruitment/passive incomes.

Dora/Doreen/HBC, you're the veteran. 
You must take next 2 months seriously and take control.
Set the direction and follow up closely on the executions.

Bestworld 宝贝 depends on your wisdom and courage to survive the unknown.

---

#3. What's the cue for re-entry?
Many people will put a re-entry point based on price.
I do too. (because I'm a people too).
Re-entry price should be about 50 cents.


However, before bwl dropped to 50 cents, there will be some cue to re-entry (at a price above 50 cents).
a. significant increase in service outlet from current 9.
b. setting up of service outlets beyond HZ
c. inclusive of skincare products as part of DS license

A lot of works need to be done.

Until then, I'll take my eyes off bwl.

adiós 宝贝 加油! 用心生活

[Boon]

Dear Boon,
my humble suggestion. Why not you write in to BWI to enquire or write in to the relevant authority to check and blow the whistle if you do have solid evidences.

No point keep harping on this thread. What are you trying to prove?
Sorry to say this, to me, you have demonstrated the eagerness to win on this topic.
I have been a value investor for many years and learnt that there is always 2 sides to a coin, the real risk is, you do not know what you don't know.

I will stop here.

Cheers

Hi VIChris,
So how do you manage the risk of not knowing what you don’t know?

[Squirrel]

Dear Boon,
my humble suggestion. Why not you write in to BWI to enquire or write in to the relevant authority to check and blow the whistle if you do have solid evidences.

No point keep harping on this thread. What are you trying to prove?
Sorry to say this, to me, you have demonstrated the eagerness to win on this topic.
I have been a value investor for many years and learnt that there is always 2 sides to a coin, the real risk is, you do not know what you don't know.

I will stop here.

Cheers

Hi VIChris,

There has been something that I wanted to ask you for a long time. Looking at your signature, you seem to place a lot of emphasis on trust and faith in the company. Under the current discussions, there are a lot of suspicions thrown on the business practices of BWL. Why are you such a staunch supporter of the company and trying to silence others? It seems ironic when I see your signature as I think that's exactly what is happening with BWL. It's starting to lose the faith of its investors when doubt is cast on their business practices.

So... are you vested or do you simply have valid reasons behind your faith in the company? Mind sharing? If are not willing or can't respond, it's ok.

[weijian]

Q: (smile) Of course, we all know that DR's Secret operate under "Export Model" is a bit fishy.  But, we have good plan to move it to DS model and so more legitimate.
Right! Now we're talking.

Q: (smile) With DS model, DR's Secret will growth tremendously and we can take on the big boy and make ourselves a household brand in China.
Correct. Exactly my point too.

(Happy ending. Both hold hand together and go for coffee break.) 

---

I prefer to "go for coffee break" (ie. we agree to disagree) than "hold hand together" (ie. tend to gravitate towards "group think" if not careful)
So i guess we don't need to hold hands and go for coffee break can?

I suspect it will not be easy to practise "DS model" and continue to grow. Let's face it - humans are greedy and the ingredients for capitalism is risk taking (in which it's foundation is greed as well). MLM grows because it feeds a certain human need (even various buddies have confessed to have been involved to a certain extent in their own past). It is easily taken to the extreme (becomes a pyramid scheme) because it is so easy to succumb to our own greed.

Will it be easy to change from a "MLM model" to "Direct sales" model in which the "past joys of passive income" are terminated? Imagine a hypothetical situation in which a sales person has 2 products to sell - Product A pays a commission of 5% and Product B pays a commission of 5%+MLM benefits. Assume both are similar products with similar clientele, which product will be promoted more by the sales person? Of course, one can say this is a great product and provides extreme value to its end users but then it begs again the question of why major cosmetics/skin product brands are paying huge money to beautiful girls in advertisements.

[edragon]

DS like a Taobao store; problem solved!

Caveat: If products is so fantastic, it sells by itself haha!

[weijian]

hi all VBs,

A reminder to keep to your posting/s related to BWL and investing, rather than questioning intent which leads the slippery road down to getting personal again.

Moderator

[Boon]

Some documents which may enhance understanding of some videos.
 
http://sg.bwlgroup.com/common/exs/pdf/Global_R4+_SG.pdf
 
http://tw.bwlgroup.com/Updates/pdf/TW_DI...201509.pdf
 
http://tw.bwlgroup.com/pdf/TW_DISTRIBUTO...201702.pdf
 
http://www.dorahoan.com/pdf/Vision/Direc...020711.pdf

https://tw.bwlgroup.com/pdf/TW_ENP_WEB-201603b.pdf

BWL Taiwan: VIP Membership & Distributorship Eligibility
Foreigner is eligible but excluding China, Hong Kong, Vietnam, South Korea and Burma.
 
ENP Compensation Plan :
Applicable to Taiwan
 
ENP - GD Global Sharing Plan:
 
Qualifying criteria:
Achieved 600 APBV, 12,000 AUBV and 300,000 AGBV
OR
Winner of SBM leadership award for EVERY month in the year + achieved 300,000 AGBV.
 
GD global sharing pool
 = 1% of BWI Global sales (excluding China, Hong Kong, Vietnam, South Korea and Burma).
 
For FY2016~ 1% x (BWI Global sales – China sales) = 1% x (SGD 200 m – SGD56 m) = SGD 1.44 m
 
ENP - PD Global Sharing Plan :
 
Qualifying criteria:
Must be Qualifier of GD Global sharing plan
And
Must have developed 3 GD or PD downlines + these 3 downlines must be Qualifiers of GD global sharing plan.
 
PD global sharing pool
 = 0.5% of BWI Global sales (excluding China, Hong Kong, Vietnam, South Korea and Burma).
 
For FY2016~ 0.5% x (BWI Global sales – China sales) = 1% x (SGD 200 m – SGD56 m) = SGD 0.72 m
 
R4 + Compensation Plan :
The Global R4+ spans across Philippines, Singapore, Malaysia, United States of America, Hong Kong, Vietnam, Thailand, Indonesia, United Arab Emirates and possibly other countries in the future.
 
R4 Global Super Sales Sharing comprises of 5 participating Global R4+ countries, which includes Singapore, Malaysia, Thailand, Indonesia and Philippines. Every quarter, 1% of the total RUe generated from the 5 countries will be distributed to all qualified members.
 
For FY 2016, R4 global sharing pool ~ 1% x SGD 20 m = SGD 0.2 m
 
----------------------------------------------------------------------------------------
 
Total prize pool of the above Global Sharing Plan for FY2016 ~ SGD 2.36 m
 
China distributors have NOT been included as part of the global sharing plan.

[Boon]

Excerpts from Maybank Kim Eng report
https://www.nextinsight.net/story-archiv...maybank-ke

Analyst: John Cheong
BEST’s share price has underperformed peers

Since the Bloomberg news article on 15 Aug 2016, the share prices of all three US-listed direct selling companies featured in the article have declined notably: Herbalife (-6%), Nu Skin (-8%) and Usana (-4%). However, BEST’s share price decline of 19% is higher.

This could be due to higher dependency of BEST on China where c.50% of sales are from China vs Herbalife (19%), Nu Skin (36%) and Usana (4%).

Chief operating officer Huang Ban Chin. NextInsight file photo

[size=undefined]Q&A with management

[/size]1. What is the impact from the Chinese government’s crackdown on pyramid schemes on your China operations?
We do not expect any impact as our business is not a pyramid scheme. We highlighted in our response to the Bloomberg article the distinctions between a pyramid scheme and direct selling.

Moreover, we are still operating under an export model and have notified the local authorities of all of our activities. More importantly, the crackdown should not impact licensed direct sellers who are running their business in a proper manner. The campaign aims to crack down on the illegal investment-related schemes and recruitment websites.

(As Chialc88 has pointed out, nobody says your China "Export Model" is a a pyramid scheme.

Based on the video of your CGL PD (China), we agreed with him that your China "Export Model" is not a pyramid scheme but a DS business with product focus. 

Based on the video of your CEO, CGL had been receiving passive income from BWL (Can you tell us from which BWL legal entity, please?).

Moreover, your CEO (based on her conventional video) has been selling the dream of passive income to China Best Worlders'
using CGL/DMJ as epitome and success story for other to emulate. 

Based on your global distributors compensation plans (ENP & R4 +), China is not participating in any global sharing scheme.  

In another words, based on the above, is it not fair to say that your China Export Model is actually being run as a DS model based on multi-level-compensation structure under the name of BWL China (which is not a legal entity) led by Country Manager Jansen Tang and other Network Team leaders including DMJ, Yang Min, Eros Hsu etc,

Is it not fair to say that BWI has been operating a DS business in China selling DRs Secret product without a DS license?
Is it not fair to say that BWI has committed  传销）

2. Will you consider delaying the conversion of your current export business model into direct selling model? What are the key differences between both models?
We will not delay the conversion process. The key difference between the two models is accounting recognition of revenue and commissions. However, there will be minimal earnings impact.

For the business operations, there will also be minimal impact. The reason why we spent so much time and resources to secure the direct selling licence in China is to raise our profile and to prevent regulatory issues as we are a direct-selling company outside of China. Our key success factor in China is our product strength.

("The key difference between the two models is accounting recognition of revenue and commissions."

I think we fully understand what you are saying. The "Export revenue" as reported is "fake" and not reflective of the "real" DS revenue and the corresponding "real" commissions. Operation wise, the two models are exactly the same - DS model with multi-level compensation structure. But accounting wise, that's the only difference)
 
3. What are your plans to regain investors’ confidence, after the major correction in your share price?
For starters, the company, founders and directors have bought back shares in the open market since the share price correction.

Also, we will be writing to the World Federation of Direct Selling Association to request it to issue a clarification that China’s crackdown is aimed at pyramid schemes, and not the licensed direct sellers. More importantly, we will continue to deliver a consistent set of results, particularly for our China operations.

( Do the right things - play by the rules - do not mislead investors => how the market reacts, it is not the company's fault !
Do the wrong things - don't play by the rules - misled investors => how the market reacts, the Company could be blamed and sued by investors who have suffered losses as a result of being misled by the Company.

Can the COMPANY afford being sued and pay a settlement of say SGD 80 m (~ 200 m share x SGD 0.40 price difference ?)

[Stocker]

Many thanks to Boon for his sharing .
This is one of the most interesting threads in VB and rather a learning journey to many , including me who have little knowledge about DS , MLM and Pyramid.
Keep them coming , we can continue to learn .

[FA+TA]

http://www.zaobao.com.sg/zfinance/person...903-792209