Business

Saturday April 11, 2009

New business plan to transform Sunrider

By LEE KIAN SEONG


US-BASED Sunrider International is evolving from a direct selling company into a store operator through its authorised business owner (ABO) plan.

The founder and chairman of Sunrider International, Dr Tei Fu Chen, says the company is replicating its successful ABO business plan in China in the other countries where it is operating currently.

The herbal products firm currently has 7,000 authorised stores in China under its ABO business plan. The plan helps Sunrider representatives operate the stores as their own business.

“We started this business in China more than 10 years ago and we see it has growth potential going forward compared with just doing direct sales,” he tells StarBizWeek in an interview recently.

Dr Tei Fu Chen

It has just opened 12 new Sunrider authorised stores in Malaysia and 51 more representatives have applied to be store owners and are currently renovating their premises.

“This business model creates a sense of ownership for the agent compared to the direct sales model,” he says, adding that some of its agents in Malaysia have converted to business owners while the others have become the shopper or VIP members of the company.

The company currently has 15 stores in Singapore, 400 in Taiwan and 150 in South Korea.

It hopes to introduce this ABO business model in the US and Europe.

He says the company treats its ABOs as partners rather than distributors, adding that the average cost to start a business is only about US$20,000 and the owners could franchise their business under this system.

On its business performance this year, Chen says the company hopes to achieve double-digit growth in revenue this year, driven partly by its ABO store business plan.

The company’s revenue was US$600mil to US$700mil last year while its Malaysian subsidiary, Sunrider International (M) Sdn Bhd, registered RM40mil in sales last year.

The company portrays itself as a health and beauty specialist and it would continue with its advertising activities to improve its brand awareness in Malaysia.

According to Chen, its business model came from a dream when he started the business.

“My dream is to make everybody become their own boss,” he says.

Born in Taiwan, Chen learnt the knowledge of herbs from his grandfather when he was a child and later continued his study of herbs and western medicines.

He emigrated to the United States and founded Sunrider in 1982.

It is currently operating in 42 countries with 7,000 retail stores in China and offers over 415 products.

“Healthcare products contributed about 60% of its total sales last year and the remaining was from beauty and household products,” Chen says.

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