“Since using Amway toothpaste my gum has stopped bleeding. After taking [Amway’s] protein powder I feel more energised. I also installed the Amway water filter for the purest and healthiest water… I finally found the feeling of happiness and peace!”
It’s difficult to imagine a more enthusiastic endorsement than the one Li Yang posted on his weibo when he announced in early November that he aimed to join the sales team of Amway, the door-to-door peddler of vitamins and shampoos. It got attention, because Li is the high-profile founder of Crazy English, a language-training business.
What do direct sales and teaching English have in common? Nothing. But Li – who admitted in 2011 to “committing domestic violence” against his American wife – said he aspired to work for the “global company Amway” in order to “to pursue success and a sense of achievement, as well as to be part of a global enterprise”.
Amway soon confirmed that Li had applied to be a sales representative, but it is unclear what relationship the disgraced founder of Crazy English has with the US company.
But some detected another motive. Industry observers say Li’s core business Crazy English has slowed dramatically in the last two years and the businessman now wants to leverage his star-power with Amway’s direct sales acumen. “The market share of Crazy English is shrinking owing to serious competition from other market players,” Shen Zheyan, a researcher at Shenzhen-based CIC Industry Research Centre, told the Global Times.
What happened? Crazy English was among the first group of English learning schools to open in the 1990s and used to have a strong reputation, attracting tens of thousands of English learners, especially from the generation born during the 1980s. It currently has branches in 20 provinces around the country. However, now that over 100 privately-owned English education institutions have been established nationwide, competition has intensified.
Li has made operational mistakes too. Students and parents alike started to complain that some of the Crazy English language centres were being run in a disorganised way. Unlike other language schools, Li is still heavily involved in everything from the daily operations of the company to travelling to a dozen cities a month and lecturing in English to crowds of up to 30,000 people.
New Financial Observer says that in 2010, Crazy English reported revenues of Rmb200 million ($32.8 million). However, its rival New Oriental, another English training school that started around the same time, saw sales reach Rmb2.5 billion the same year.
Of course, all the negative publicity from Li’s marital problems didn’t help. New student enrolment slowed dramatically after news surfaced about Li’s domestic abuse, a company staffer admits.
“Domestic violence is not a small issue, especially for a public figure. With Li Yang being so recognisable the effect is even more pronounced,” an employee at Crazy English told 21CN Business Herald, adding that “news about the domestic violence has turned many parents away.”
However, another insider told Information Times that, “joining Amway is just Li’s personal choice, which will have a limited impact on Crazy English.”
Meanwhile, industry observers are sceptical that Li will make a mark at Amway. “Li Yang adds absolutely no value to Amway. It’s not obvious how they can mutually benefit from the cooperation,” says Professor Gu Xiaoming from Fudan University.
Nevertheless the timing is interesting. Before Li announced his passion for Amway, Beijing’s education authorities unveiled a plan to reduce the importance of English scores in college admissions tests by 2016. That’s not the best news for anyone teaching English in China, particularly of the ‘crazy’ variety…
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.