The future looks bright for companies that tap into the Chinese direct selling market. It’s funny that the media still tends to categorize direct selling and Network Marketing as "door to door".
When was the last time you saw someone a door to door Network Marketer?
Investors:
U.S. herbal supplement companies are finding a huge
market in the cultural home of herbal nostrums — China. And the Chinese
are embracing not only the products but also the American way to sell
them: door-to-door through independent contractors.
The direct sales approach appeals to the Chinese temperament, says
attorney Lee Wright of Kirton & McConkie, a Salt Lake City-based
firm that helps U.S. companies do business in China."At heart, the individual Chinese is entrepreneurial," Wright said.
Still, the arrival of the U.S. selling method meant a cultural shift
for Chinese consumers and entrepreneurs. And it meant changes to
Chinese laws.In 1998, China outlawed direct sales after a wave of
consumer-cheating scams. Beijing and provincial governments feared the
marketing method could lead to pyramid schemes, which profit by
recruiting fee-paying sales reps rather than by selling products.To get into China, big U.S. outfits like Nu Skin Enterprises, (NUS) Herba- life (HLF) and Avon Products (AVP)
also made cultural shifts. To get direct-selling licenses they first
had to set up conventional retail stores, hire staff and manufacture in
China.In February 2006 China gave the first license for direct selling to cosmetic giant Avon. Nu Skin came next in August.
After years of negotiation and compliance with China’s interim
rules, Nu Skin could offer its nutritional supplements door-to-door in
the land with the world’s longest tradition of herbal remedies.
