Direct Selling Brands Make Headway in China

As China clears the way for direct sellers to operate, an increasing number of companies are tapping into the market’s vast potential, particularly in the category of anti-aging products. Amway, the No. 1 direct selling company in the world, generated revenues of $11.3 billion in 2012. Over a third of that revenue came from Amway China.

The Chinese government enacted a sweeping ban on direct selling in 1998, forcing companies like Amway to adapt in accordance with the country’s evolving regulations. The Harvard Business Review recently featured an article by Amway President and Co-CEO Doug DeVos on how Amway reinvented its business in China.

To support its growth, Amway has built a second distribution center and an R&D center in the region. Currently, the company is developing an Asia Beauty Innovation Center in Seoul, South Korea, to guide product development and refine R&D and marketing efforts in China and Southeast Asia.

Skincare and nutrition company Nu Skin is also investing heavily in the area with the upcoming launch of its regional headquarters in Shanghai. Nu Skin recently obtained clearance from China’s Ministry of Commerce to expand its direct selling business into an additional five provinces and 30 districts. Global nutrition company Herbalife recently received its 25th direct-selling license, clearing the company to conduct business in China’s Yunnan province.

Analysts predict that mainland China’s beauty industry will grow 15 percent annually, reaching $125 billion in 2015. Look for a detailed report on China and other billion-dollar direct selling markets in our upcoming issue of Direct Selling News.

Read more on the expansion of direct selling brands in China.