Avon approved to test direct sales

Cosmetic giant Avon Products Inc. said Friday it had won Chinese Government's approval to test direct selling in three regions beginning this month, seeking a stronger presence in the world's seventh-largest economy.

"The objective of the test is to help the government find a suitable direct selling model that would fit the needs of Chinese consumers, promote social stability and help protect consumers against illegal practices," Avon chief executive officer Andrea Jung said.

China closed the door on Avon's direct selling in 1998, confining the company to selling through retail outlets.

The ban was mainly aimed at domestic pyramid schemes.

But last July, Avon, one of the legitimate companies also broadsided by the ban, said it had won verbal approval from the government to once again send its famed army of sales staff directly to Chinese homes.

Avon said it would begin testing direct selling in Beijing and Tianjin and the southern Guangdong Province, but Jung declined to give details of how many sales staff would be involved.

Avon is the world's top direct seller of beauty products, with US$7.7 billion in sales last year. Jung did not say how big the company's China sales were, but said they grew 40 percent last year.

"We continue to see the same kind of growth this year," she said.

"Avon China remains the number one opportunity for our corporation. Over the last several years, the growth here has been spectacular, and we have no doubt that our business in China will continue to succeed."

Avon currently operates more than 6,000 boutiques and 1,000 department store counters in China.

Source: CRI news