Amid a consumer boom, direct-sales companies like Avon and Nu Skin have been changing traditional shopping patterns all over East Asia. Amway is big in Japan, where its “distributors” last year sold $1.1 billion of everything from detergent to coffee directly to households eager to avoid expensive retail stores. After calling upon U.S. diplomatic muscle to break down Korean barriers, it expected similar success. More than 30,000 Koreans signed up. “You could say I found the opportunity to realize the American dream,” says Jang Hyun-Wang, a distributor in Seoul.
Since purchasing a $60 starter kit, jang has supplemented his regular salary by $1,200 a month, selling mostly to friends and relatives. Seoul prosecutor Ju Chul-Hyeon argues that Korea’s family-based culture makes it particularly vulnerable to Amway’s direct-marketing techniques. Distributors earn commissions not only on their own sales, but also on the sales of other distributors they recruit. “Those who are asked to buy by family members or neighbors cannot refuse,” ju says, adding that consumer complaints led him to jail local representatives of Amway and Sunrider International, a California company that sells herbal food supplements.
Amway’s sales pitch has struck a chord with housebound women who see a chance to earn money for the first time. It has also encouraged beleaguered salarymen to buck the rigid corporate system. Both developments are profoundly unsettling to Korean traditionalists. “It’s easy money,” says Ju. “Who will do the dirty work if everyone is selling for Amway?” Sunrider executive David Li terms his 12-day jail stay “just a misunderstanding.” Both companies hope Washington will press President Kim Young Sam to drop the cases. Kim has promised to make Korea’s markets more friendly to foreigners. The uproar over direct sales may test his resolve.
