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Foreign firms show way in direct selling (2)

(China Daily)    11:21, October 03, 2013
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A manufacturing base of Amway (China) Co Ltd in Guangzhou, Guangdong province. The company invested 600 million yuan in building its first global planting R&D center in Wuxi, and its factory in Guangzhou, which will mainly expand the manufacture of its flagship brand, Nutrilite. Provided to China Daily

Among those forerunners, Mary Kay, Nu Skin, Amway, and other foreign companies have gained solid ground in the marketplace and keep revamping market strategies to maintain their competitive edge.

As for Nu Skin Enterprises, a United States-based direct-selling company, its revenue in Greater China amounted to $269.1 million in the second quarter of 2013, up 35 percent compared with the same period last year.

"Mirroring our total global revenue of $682.9 million in the second quarter, I think China is playing a bigger role in our company's global expansion," said Andrew Fan, regional president of Nu Skin Greater China.

Entering the Chinese market in 2003, Nu Skin has established five manufacturing plants, two R&D centers, as well as 48 boutiques and stores, with an investment of 3 billion yuan up to the end of 2012. Later this year, its Greater China Innovation Park will be opened, and this is also the company's biggest overseas investment till then.

"This shows our determination in further exploring the Chinese market," said Fan.

Featuring anti-aging products, the company is selling more than 200 categories of anti-aging and nutrition products, including its flagship brand ageLOC, with ageLOC Transformation System, ageLOC Galvanic Spa and Body Spa, and nutrition product portfolio, Pharmanex, priced at 200 yuan to 600 yuan.

"We are planning to triple our distribution networks in the next five years and add the independent promoters, who can promote and sell products in their own business places, into the current marketing model," Fan said.

Although more competitors are joining in the battle, Fan said Nu Skin will stick to focusing on the niche anti-aging sector, as the proportion of aging people will jump to 25.4 percent by 2033, and one-third by 2050, according to the Ministry of Human Resources and Social Security.

Foreign firms show way in direct selling

"We are not competing with other direct-selling companies in this field, and we have advantages over technology and marketing," Fan said.

Different from Nu Skin, Amway is diversifying its products, while the 50-year-old Mary Kay Inc is planning to march into male skincare products and the healthcare sector.

"China is Mary Kay's only manufacturing plant outside of the US, and China is the company's biggest overseas market right now," said Paul Mak, president of Mary Kay in China.

Mak refused to reveal the sales figures in China as it is not a listed company, but he said the company has developed about 190,000 salespeople, and its year-on-year growth is remaining above a three-digit number in China.

"We are improving our brand and service in matured markets in big cities to compete with numerous retailing cosmetics brands. At the same time, we are speeding up digging out smaller cities, as we have established seven distribution centers around the country to assure an immediate delivery," he said.


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(Editor:GaoYinan、Yao Chun)

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