Best World

[Millionfaith]

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.

Oops ya, my mistake. This is Feb now

[Boon]

Franchise Model
The Group transitioned from the Export Model to the Franchise Model in China in the second quarter of 2018. Under the Franchise Model, the Group’s franchisees (the “Franchisees”) are independent third parties who are permitted to establish and operate BWL Lifestyle Centers in China and exclusively distribute the Products under franchise agreements entered into with the Group.

Pursuant to the franchise agreements entered into between the Group and each Franchisee, the Franchisees purchase the Products from the Group for distribution through BWL Lifestyle Centres to end consumers and independent third parties who operate salons, spas, beauty centres and other retail outlets (“Workshops”). Some Workshops are also licensed to use the Group’s brands and trademarks in selling the Products to other consumers in China. Under this model, only the Franchisees, who operate and manage BWL Lifestyle Centres and distribute the Products to its customers, are the direct customers of the Group.

Franchisees are required to set up BWL Lifestyle Centers in accordance with the Group’s signage and fit-out franchise guidelines. The Group also actively works with Franchisees to manage the Workshops, with a view to ensuring that the set-up of these stores and the quality of services they provide to consumers are consistent with the Group’s brand standards. The Company periodically visits the Franchisees to understand their operating conditions and the market demands for the Products.
 
_____________________________________________________________________________________________________

BWI sells (exports) to its wholly owned China subsidiary, BWCP (Best World China Pharmaceutical).

BWCP sells to Franchisees (who is the Owner and Operator of BWL- LC (Lifestyle Centres).

Franchisees sell to
a)      End consumers
b)      Owners of salons
c)       Owner of spas
d)      Owner of beauty centres
e)      Other retail outlets

What is “Workshops” ?

a + b + c + d + e = “Workshops" or b + c + d + e or e only ???????????????????

“Some Workshops are also licensed to use the Group’s brands and trademarks in selling the Products to other consumers in China. Under this model, only the Franchisees, who operate and manage BWL Lifestyle Centres and distribute the Products to its customers, are the direct customers of the Group”

Question : BWCP only has contractual agreement with the Franchisees and not with the “Workshops”. How is the use of the Group’s brands and trademarks being “licensed” to these “workshops” given that there is no contractual relationship between BWCP and the “workshops”?

[Boon]

"Pursuant to the franchise agreements entered into between the Group and each Franchisee, the Franchisees purchase the Products from the Group for distribution through BWL Lifestyle Centres to end consumers and independent third parties who operate salons, spas, beauty centres and other retail outlets (“Workshops”). Some Workshops are also licensed to use the Group’s brands and trademarks in selling the Products to other consumers in China. Under this model, only the Franchisees, who operate and manage BWL Lifestyle Centres and distribute the Products to its customers, are the direct customers of the Group."
___________________________________________________________________________________________________________

If the goods/products are distributed without going through BWL Lifestyle Centres, would that constitute a violation of the franchisee agreements ? 

[specuvestor]

Personally kudos to Boon who saw the discrepancy / grey area. But also a reminder to all VBs that share price and fundamental may not synchronise for a very long time. Company has said as such:

"Although the Group obtained a direct selling license from MOFCOM in June 2016 covering
certain health supplement products over a limited geographical space in China 5 (see
http://zxgl.mofcom.gov.cn/front/getEnter...0400049586), the Group does not rely
on the direct selling licence for the Franchise Model or Manufacturing/Wholesale Model, or the
Export Model previously employed in China. Since obtaining the direct selling licence in 2016,
the Group has not conducted any sales in reliance of the direct selling licence."

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

[chialc88]

宝贝加油! 明天会更好 Go Bestworld Go!

I am not vested in Bestworld thou it used to be my top counter.

I still feel that Bestworld is a good company with a golden heart.

I scan thru the news report and also Bestworld reply and our valuebuddies had already said it all.

I just wanted to share what I felt.

For a start, you probably already seen my desktop background wallpaper.
If not, just read this post in vb.com 
It's just a table of historical low and high price for STI bluechips.
link


So, curious Valuebuddies will be keen to know what's my home page (web browser lar).

Well to satisfy your curiosity... Bestworld Direct Selling License in 2016



In particular, I checked regularly for any changes to Direct selling activities.
Today, I know why there is no changes.

1. It's updated once a year
2. Bestworld do not have the intentions to go into Direct selling
(not saying they never have the intentions. They might have. 
It's clear to me that some point in time, 
the decision already made not to pursuit DS as it's business model.
I missed this point totally, Boon?
Do you know when did they decided not to go for DS?)

The one and only one point I wanted to make today is:
what and how other people making use the Bestworld DS license and make (sinfully lots of) money out of it?

It's clear that Bestworld tighten their legal obligations.
Franchise model also provided some structure to control their customers
... obviously with the intentions to protect Bestworld interest (eg. brandname, quality of sales, cash upfront etc).
It's clear that someone is making use of Bestworld to build a sales model which is completely 
opposite of Bestworld vision.

The writing is on the wall.
I am very sure D2 and HBC do not intend/want these sad stories to happen.
I am also very sure that D2 and HBC know exactly what is happening.
... (the tighter their statement, the more definite clue that they are aware)
... (chinese saying: there is no 300 tael of gold here)

For a million dollar, after protecting yourselves legally,
what else can you do to help?

I know you can't do much, but at least you can try?

There is absolutely no need to grow so fast.
It's like neck breaking speed.

You have a strong foundation, you have the right future story,
do something, please.
All our Bestworld 宝贝 is counting on you to give them the necessary light/help they most needed in their life.
D, you went thru it, and you must do something, no matter how small or silly to help.
You owe it to them.

好好愛我.
宝贝加油! Go Bestworld Go! 



Last but not least, thank you all valuebuddies, once again.
I had benefited from all your tips (just that you don't know it.)

[Boon]

商务部关于直销产品和直销培训员备案管理有关事项的通知
2016-04-22 
http://www.mofcom.gov.cn/article/h/zongz...4160.shtml

澄清】近日，有媒体在解读国发〔2016〕9号文件时，认为“国务院取消直销产品变更审批，直销产品范围或将开放”。在此澄清：国务院取消“直销产品说明重大变更审批”，仅仅是管理方式上发生了变化，即不再需要履行审批手续，但直销产品范围、直销产品生产企业的要求并没有变化，直销产品范围仍然必须符合商务部、工商总局2005年第72号公告的规定。

http://www.fcx114.com/ffzx/zxll/8273.html
__________________________________________________________________________________________________________________

Interestingly, for enlargement of list of permissible products to be sold under the approved DS license, approval is no longer needed from MOFCOM, but product registrations/certifications with relevant authorities are still required.

Requirement that products must be self-manufactured (including that of parent company) remains unchanged - my interpretation.
_____________________________________________________________________________________________________________________________________

Hi Chialc88,

I wouldn't be surprised if they have decided to put the China DS model for DR Secret products "on hold" for 

1) Tuas factory is not yet operational - delay upon delay - self manufactured criterion could yet be met. See above.
2) Single-layer compensation structure under the China DS model is not BWI's cup of tea.................Ha-ha !

https://finance.sina.cn/2019-02-16/detai...l?from=wap

The longer they delay their DS business in China, the greater the risk of the license being canceled.

If that happen and the "Franchise model" fails, they would have to "re-invent" and re-position themselves again in China........

That's the risk they are willing to bear in order to ride the current "demand momentum" for DR Secret...........................

[ACTIVIST SPEAKS]

Excerpts from Best World's SGX announcement : "....Accordingly, under the Franchise Model in China, the Group records its sales at the time the Products are sold to the Franchisees. This revenue recognition is in line with SFRS(I), the accounting standard of the Group.
The Group is not responsible for the accounting and sales records of the Franchisees, who are independent third parties"


此地无银三百两？

[Boon]

NPAT (SGD million):
FY2013 = 1,429
FY2014 = 4.052 (+184%)
FY2015 = 10.104 (+149%)
FY2016 = 34.569 (+242%)
FY2017 = 55.673 (+  61%)
FY2018 = 72.892 (+ 31%)

The base is is getting bigger, rate of growth is decreasing 

Share Price = 2.53
EPS= 0.1326
PE=19

Can growth be sustained in China going forward ? At what rate and for how long?

What are the risks?

[Boon]

It is a misconception that one has to be involved in DS to commit 传销 in China......

http://www.gov.cn/zwgk/2007-02/14/content_527207.htm

第二十九条　以特许经营名义骗取他人财物，构成犯罪的，依法追究刑事责任；尚不构成犯罪的，由公安机关依照《中华人民共和国治安管理处罚法》的规定予以处罚。
　　以特许经营名义从事传销行为的，依照《禁止传销条例》的有关规定予以处罚。

[chialc88]

第九条　利用互联网等媒体发布含有本条例第七条规定的传销信息的，由工商行政管理部门会同电信等有关部门依照本条例的规定查处。
禁止传销条例

Yes, Boon.
Sad, very sad. We all know its not correct.
China is too big and one type of rice needs to feed 100 types of people.
There bounce to be some bad guys amoung the best.
宝贝加油! 明天会更好



It's true that Bestworld was granted a Direct Selling license and it's HBC wishes to roll out DS model.
Unfortunately, Bestworld strayed and applied for Franchise license instead of holding on to it's strategy.

Franchise is a great success... at the expense of its member.

Sad, very sad.