Cosmetics, Household &
Personal Products
Direct Selling in China
If Regulations Ease, Opportunity Expands A Local Perspective
􀂄 COMPREHENSIVE, VALUE-ADDED LOOK AT THE CHINESE DIRECT SELLING
INDUSTRY. Since China is many global direct sellers’ most important growth
market, this well-timed report examines the industry’s history, evolution, and
outlook in that nation. We believe the perspective afforded by one of our team
members, a Chinese citizen with years of consumer products experience in that
country, adds value to our research of this topic ─ which, in any event, is based
on in-market conversations and thus is entirely proprietary.
􀂄 EXPECT $30 BILLION DIRECT SALES MARKET IN CHINA WITHIN FIVE YEARS.
That estimate, which assumes the industry grows in the low double digits through
2012, may in fact be conservative, given the fast-rising Chinese economy and
recent positive changes in direct selling regulation. Even at $30 billion, we
envision room for outstanding growth for the major industry players ─ for
instance, Avon (rated Peer Perform), which is off to a flying start in China, could
have a $750 million market in that nation in five years.
􀂄 WILL THE NEW REGULATIONS BE ENFORCED? The industry’s future will
depend on whether the Chinese government strictly enforces its regulation. If it
does, Avon should benefit significantly. However, we expect more flexible
enforcement as the industry evolves, which ─ since only a single-level
compensation scheme is currently allowed in China ─ could be a major advantage
for companies that have adopted a multi-level compensation business model.
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