Nu Skin expands operations in China

By Guy Montague-Jones

- Last updated on GMT

Related tags: Direct selling, Guangdong, Guangzhou

Nu Skin has gained official approval to begin direct selling activities in Shenzhen City and four other cities in the Guangdong province.

The Chinese Ministry of Commerce awarded the licenses after opening up 12 districts of Shanghai and 18 in Beijing to the company early last year.

Chinese expansion

The latest move gives Nu Skin access to the second largest province in China with a population of more than 94.5m people.

Nu Skin CEO Truman Hunt said: “We continue to see great potential in this market and believe our ability to expand our direct selling model to those in the Guangdong province will have a positive influence in the China market.

“Overall, we are confident in the direction of our global business operations and look forward to executing on our 2009 business plan.”

Avon was the first foreign company to be given permission to resume direct selling in China back in 2006 and Nu Skin followed suit last year.

Emerging markets

Over the past few years direct selling companies have posted excellent results from emerging markets in Asia and Latin America. China has been a particularly attractive target because of the great size and potential of the market.

But the financial crisis is beginning to show signs of upsetting years of high economic growth rates, potentially putting a brake on the growth opportunities in the country for foreign beauty companies.

Direct sellers are nonetheless confident of standing their ground in difficult economic times.

Direct Selling Association (DSA) looked at direct sales in comparison to GDP between 1987 and 2007 and found that direct sellers perform well in troubled times.

“In a non recessionary year a one percent increase in GDP is on average accompanied by slightly more than a one percent increase in direct sales. In recessionary years, however, we can see upwards of 5 percent growth in direct sales,”​ said DSA spokesperson Amy Robinson.

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