In the awarding conference of 2004 Tiens (Malaysia) International Annual Convention, Mr. Yan Yupeng, Vice President of Tiens Group, Executive President of Tiens International Marketing Group, gave a report declaring to implement a global integrated direct selling strategy and further expand the market.

His speech is as follows:

All distinguished guests,

Good afternoon!

The new year has a very auspicious beginning as it coincides with the 4th Tiens International Annual Convention held today in Kuala Lumpur. On behalf of the Tiens International Marketing Group, I am most grateful to welcome our guests and friends from the five continents of the world to this convention. My heartfelt gratitude goes to all of you who have rendered your strong support and assistance to us. We also wish to express our warmest congratulations to the organizers for the success of this convention!

Today, we are very happy to see direct selling leaders from all over the world converging here for this meeting. The theme of this year’s convention is “Shaping Our Future”. This theme aims to promote exchanges and sharing among Tiens partners worldwide. It also marks the remarkable success achieved by the Group under the guidance of the Six-Network Interaction and New Replacement Theory advocated by our President Mr. Li Jinyuan.

As we know, with the increasing pace of globalization of the world’s economy and information, the world’s economy and international marketplace are also moving steadily towards global integration. This will have a positive impact and a power impetus on the world’s direct selling market. The coming of an integrated global economy will see the rapid emergence of global multinational companies. And to be ranked in the Fortune 500 has become one of the strategic goals of Tiens in the next 10 years.

Without doubt, in the era of economic globalization, the competition for market and customers for enterprises has crossed national boundaries. The fierce competition in a global environment requires constant deployment and restructuring of resources. In this aspect, Tiens is in the stage of high growth. In view of the discrepancies of performance among different regional and national markets, it is imperative for us to achieve a global perspective in our business thinking before we can march towards integrated global direct selling operations. A global perspective means we have to view the world in an open and far-sighted approach and seek out opportunities in the discrepancies and constantly look for opportunities to realize our goals in the market. Based on this analysis on the global market, we have identified our strategic thrust on the realization of integrated global direct selling and realigned our market-oriented direct selling operations towards customer satisfaction. To achieve this we have to do take the following actions:

The direct selling operations of Tiens are aligned with our distributors all over the world and international direct selling and the maximizing customer satisfaction is the core of Tiens’ business culture and the common value for all its employees.

Tiens group has incorporated the concept of customer satisfaction into every functional department, franchise store, branch company and regional head-offices, our market analysis, operation decision-making, business integration, product service, code of conduct, and bonus system. This has resulted in significant effects. For instance, in terms of products, we have readjusted the product structure in the various regional and national branch companies by changing the single and China-made product structure towards a global composition comprising products from around the world and local products to further strengthen our product range in addition to the inclusion of product series. Some of our product series are being localized to cater to the changing market needs and achieve higher efficiency. Apart from this, we are constantly improving the quality of our products both in terms of packaging and contents to make them truly top quality products. In terms of education and training, we have established regional educational and training platform to create an education and training system with the unique Tiens identity. In this area, we have fully utilized the various local educational and training personnel and resources for exchanges and replacement of resources. We are providing better education and training to our personnel to meet the market’s need for diversified advertising and promotional literature and the needs for business expansion of our Distributors.

Our distributors are the very foundation of our market development and also the lifeline of the company. Therefore to achieve customer satisfaction, it is necessary for the Group to implement standardization and scientific restructuring based on customer satisfaction on a global scale in order to formulate management systems based on customer satisfaction. This includes organizational structure, work procedures and information system to create a marketing system where the global Tiens network will be guided by the Group’s headquarters and the regional branch companies serving as regional hubs and the franchise stores as foundation. This will enable a unified management of the Tiens marketing network and promote greater market penetration and greater competitiveness in the international market.

To cater to the Group’s needs, we have built a global integrated structure with emphasis on creating a management concept which is market-oriented and centered on customer satisfaction. Vertically, this structure comprises three levels of management, namely on franchise stores, branch companies and regional head quarters. Horizontally, it comprises the ten marketing regions of China, Eastern Europe, Western Europe, Africa, Russia, Ukraine, North America, South America, Southeast Asia and Central Asia which will have overall budgeting and unified management in accordance to functions, regional and levels. This will, in turn help achieve the integration of Tiens global market, operations and information systems and the realization of a scientific organization, structural optimization, shared utilization and unhindered information flow.

The success of an enterprise and the essence of management lies on its culture. Different corporate cultures have different concepts and codes of conduct. The acceptance and recognition of these concepts and codes of conduct shape different corporate cultures. A culture has a guiding, cohesive and motivational function on the long-term development and changes of an enterprise. As a multinational group, Tiens activities span over 90 countries and regions in the world. This has made the corporate culture of Tiens increasingly diversified due to the meeting and interaction of different ethnic groups and cultures of the countries and regions where it operates. In achieving the standards of customer satisfaction, we are fully aware of the effects of cultural integration so that it could serve as a guide and reference for our management and operations. To gain the satisfactions of our customers, we need to build a high quality and learning-oriented marketing team which is highly adaptive to the changing market settings and dedicated to customer services. In this aspect, we must take full advantage of any opportunity for training, exchanges and communications and the convenience of the internet and other techniques and expertise as well as scientific management concepts and techniques to enhance the service awareness of our management personnel so as to constantly improve customer satisfaction and market satisfaction.

To be a leader of the future market, we want to make use of the platform of e-commerce to make Tiens a market leader in the direct selling industry.

In China and certain countries, we have made used of the internet to provide on-line ordering, sales enquiries and information announcement facilities to our Distributors so that they can directly conduct their business on-line. Our online marketing system has a high operational functions and service effectiveness. For instance, the CRM system allows distributors to enquire they sales performance with the company through the internet at anytime and anywhere, enjoying Tiens quality products and services without leaving their home. The ERP system is easy, fast and accurate thus allowing a branch company and franchise store to track products easily and enquire the status of their purchase orders and goods-in-transit and other related information. The PORTAL system provides the fastest possible response to the latest developments and newly policies of the Company. These services have greatly increased the science and technology contents of our direct selling operations and enabled more and more Tiens Distributors to enjoy the convenience and benefit of information technology.

The next 3 to 5 years will mark a vital period for the market development of Tiens Group. We will strive to implement the Six-Network Interaction and New Replacement Theory propounded by our President Mr. Li Jinyuan and intensify human resources development, and our investment in trading, education, culture, and tourism sectors in order to constantly enhance the market participation and competitiveness of our distributors.

While we are striving to implement the overall international development strategy and pursue greater heights of excellence, we will also take a series of measures to achieve standardization, scientific management, localization of operations and information development in the framework of our international development strategy.

Based on our past experience and our future outlook, the key to the success of the direct selling business is to be compliant to market needs and respect cultural differences and diversification so as to prevail in diversity. The world is a colorful place and to realize the goal of integrated global direct selling operations, we must respect the different ethnic cultures and customs of the various countries and regions where we operate in. This is the very foundation for us to achieve our annual performance. So, we must strive to achieve cultural integration and maximization of resources to work for new breakthrough in the global direct selling market. As such, the management personnel and direct selling teams of the Company must take their initiative to engage in more exchanges and communications and to learn from each other in order to contribute towards the growth and development of Tiens in the global market.

Experience shows only enterprises which are internationally competitive can develop in the international arena while enterprises which are less competitive will find it difficult to survive. Hence, we must lock in our target to build an international direct selling force which is strong, highly experienced, professionally managed, highly competitive, and centered on the culture of customer satisfaction. I firmly believed that as long as we are totally confident and committed to carry out thus global integrated strategy of direct selling operations, we shall lead the future and achieve our targeted performance.

Submitted by: Yan Dong from Tiens International Media Group
Jan. 22, 2005