Mary Kay opens new facilities in Mexico

By Katie Bird

- Last updated on GMT

Mary Kay has opened a new distribution centre and
headquarters in Mexico after twenty years of trading in the country
- a move that celebrates the success of direct selling in the
emerging market.

The Dallas-based direct selling company will today open the new facilities in Nuevo Leon in North Mexico.

The centre and headquarters are twice the size of the original facilities, and cost the company approximately $20m, according to the publication.

"These new, larger and technologically sophisticated facilities will further strengthen Mary Kay Mexico's ability to serve the needs of its rapidly growing independent sales force," company president and CEO David Holl said in a statement.

Mary Kay is one of the largest direct selling cosmetics and beauty companies with sales of $2.25bn in 2006.

Operating in 32 countries it has benefited from the success of direct selling in the emerging markets, recently expanding its presence into the Chinese and Indian markets.

The company launched its Indian operations earlier this year with an investment of $20m, concentrating on the highly populated New Delhi, Chandigarh and Ludhiana areas; however expansion is planned during the course of the next five years.

"We now have more than 350,000 Mary Kay independent beauty consultants in the region," said K.K. Chua, president of Mary Kay Asia-Pacific.

Direct selling appears to prosper in emerging markets, with many of the big players relying on strong sales in these areas to boost their annual financial results.

US based direct seller Tupperware reported third quarter results in October this year that were significantly boosted by emerging markets.

Sales in emerging markets, which account for 46 percent of global sales for the company, were up 20 percent with the strongest growth in the beauty division occurring in Central and South America.

Conversely the company reported that in established markets direct selling is proving to be a difficult retail channel with Tupperware reporting a double-digit sales fall in Germany.

Similarly, direct seller Avon reported strong sales in Latin America in this year's third quarter results - an increase of 21 percent on last year's third quarter (13 percent in local currency) - with Brazil cited as the major contributor to growth in the region.

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