Best World

[Millionfaith]

@investor1, I have invested in BW earlier than you do, and am still holding it.

With some exposure to DS/MLM, my fear is not on exactly what Boon has pointed, because this has been a practice, even in SG, as I pointed out earlier. Squirrel has also showed some articles pertaining to DS license. These are my thoughts:

1. Direct selling business is a risky business. It is difficult to control the agents/distributors who are not direct employees of the company. On one hand, the company wants to keep agents/disty who are able to expand the business, but the company also need to have some accountability how the agents/disty conduct their business as bad reputation will tarnish the brand. However, it is not easy, hence get out of your investment if this risk is not acceptable to you.

2. Besides agents/disty conduct their business shabbily, it is also hard for the company to make sure no one tries to produce “fake” products. For instance, in China, there are people who “fake” Amway protein and pass it on as the real thing. So I wouldn’t be surprise there is fake DR’s Secret one day. And surely, if such news surface, BW might suffer price crash....hence be prepared.

3. Any super agent/disty can "disappear" (I saw many good leaders come and go in a DS/MLM environment), will this impact the sales for BW. Is this a risk, that depends on how you look at it.

4. I do not think BW will train its agent. For a DS/MLM to "impact skill", the newer recruit basically trained and get assisted by their leaders/upline. Therefore as someone involve in a DS/MLM, I see my over-ride commission necessary. By the way, I can't speak for BW marketing plan, but Amway marketing plan is fair. My "sleeping" uplines do not get commission from my revenue, only those "at work" will probably but not necessary get something. I believe BW is along the same line....if is not win-win, the plan will fail eventually.

5. The above are just some risk such company would face. Hence, if you are not prepared, get out please. It takes conviction to feel at peace with your investment. If there is no peace, then maybe reduce risk is a better and healthy choice.

6. However, I would like to highlight that all businesses carry some form of risk but how “real” are these risk. If such model have been practicing in China (based on my Amway exposure plus what BW IR stated), why are such practices allowed? And if there is high probability of BW DS license to be revoked?

7. Why most of you here focus on China—if is MLM or not? I have stated earlier that Singapore also do not allow MLM, and probably in all the other regions that BW conducted her business may not be permitted. How about BW DS license for example in Taiwan, Singapore and so on get revoke?

8. Even if the system (663) is not the trigger point for license to be revoked, it can be the conduct of any agents/disty, if they are not mentored with leaders with integrity. How BW manage their agents/disty is a bigger concern for me than going through length investigating if the system is legal or not. Let the authority do it, our job as an investor is to evaluate if the risk/reward is acceptable in the worst probably scenario.

9. On the other hand, there are so many MLM companies prosper in Singapore—including insurance and property agencies also practise multi level commission, why is it allowed in Singapore? Singapore is a HIGHLY REGULATED country, why multi level commission scheme is able to conduct here?

10. The legality on DS license should be looked into earlier (for example how it conduct its business in SG), not when the company is entering China market. This is risk from day 1 if one decides to invest in a DS/MLM business.

11. I am not saying the DS license in China is not important, but instead of focusing if the agts/distys doing the right way or not (like I said, such conduct has been there since a long long time), focus on the effectiveness on the products. I heard DR’s Secret is a wonderful series of skin care, and that may form a strong foundation on its sales.

12. Another area I will focus on is the management. Can I trust the management on their leadership, integrity and so on.

13. The PE of Best World, in my view is fair, even if no DS revenue. Its export/retail is doing as fine. My current concern is if the agts/disty over stocked in preparation of DS, what is the "real" demand from China consumers? Another concern is how effective and receptive is DR’s Secret product in China, the sustainability. The success in Taiwan market seems to provide some indication, but still too early to make any confirmation.

14. When the revenue in China grow, then I may be more concern on sustainable, currently, the sales is actually still small in my view.

15. Export/retail license allows products to be sold via a shop (mostly beauty, hair saloons), i.e. B to C. However with a DS license, it enables C-C. If the transition is successful, the growth should be exponential.

This is my view, do your due diligence.