China Gives Morinda the Green Light on Direct Selling
February 27, 2015 Leave a comment
Morinda Inc. is the latest company to secure a direct selling license from China’s Ministry of Commerce. Government officials have issued just 48 licenses since the country lifted its direct-selling ban in 2005. Morinda plans to market its juice blends and TruAge nutrition products in the city of Chongqing, a hub of over 32 million people, as it awaits additional permits.
“We’ve spent several years and a lot of effort pursuing this license,” said Morinda President John Wadsworth. “This is an expression of our commitment to the future of Morinda.”
China is the industry’s fastest-growing market, accounting for $27.3 billion in 2013 retail sales. In the same year, only eight new companies received approval to launch direct selling operations. The Chinese government’s narrow regulations have posed challenges to many companies within the industry, including Amway, which obtained a new license in 2006 after modifying its business to accommodate the ban.
“The rules in China are still unique,” Amway President Doug DeVos wrote of reinventing Amway China in a piece for the Harvard Business Review. “The way we operate our business and compensate our salesforce there is very different from what we do in other parts of the world. But we’ve learned a lot, and our revised business model is working.”
Since launching in 2003, Morinda’s Chinese subsidiary, Tahitian Noni Beverages (China) Ltd., has established offices in nine cities across the country. The company also opened its own GMP (Good Manufacturing Practice) plant in Chongqing in July 2014.