July 17, 2006 We just love a successful business model and when that distinctly American direct sales institution Avon was awarded its direct-selling license by the Direct Selling Administration of the Chinese Ministry of Commerce, the conditions were just right for a spot of spontaneous combustion. China is embracing some aspects of Western culture most readily, among them the concepts of applied glamour, fashion and beauty contests. In less than four months (to June 30), Avon Products China has recruited and certified more than 114,000 licensed Sales Promoters, and another 31,000 are in various stages of the certification process. Avon's Sales Promoters are the company's direct-selling reps, who provide customers with the one-on-one personal service that Avon is recognized for globally. "The high numbers of licensed Sales Promoters in such a short time reflects the great appeal of the Avon earnings opportunity in the Chinese market," said SK Kao, General Manager, Avon China.
Mr Kao continued, “we also are very pleased that nearly 90% of our Beauty Boutiques have qualified to act as Service Centers under the government's regulations, indicating that our Beauty Boutique owners want to be involved in direct selling.”
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"The Direct Selling Administration Ordinance and the Document Number 455 have given very clear guidance to our practice."
Under the new model, the Beauty Boutiques now offer after-sales services (order pick-ups, product returns, credits, product trials, billing assistance, etc.) to Sales Promoters, and beauty consultation services to consumers, while continuing to sell products at retail.
"Our base of almost 5,700 Beauty Boutique owners provides one of the largest service coverage networks in China, and is the foundation of our business and at the core of our direct-selling model," Mr. Kao said.
Mr. Kao added, "Avon's direct-selling model brings the best features of retail and single-level direct-selling together, and as we continue to comply fully with the government regulations for direct selling, we believe this partnership will enable Avon to serve more and more women throughout China with our high-quality beauty products."