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Direct Selling in China

China direct selling market forecast to increase by 12% CAGR during 2014 to 2019

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2014-05-01 00:37:08 - Direct Selling in China - a new market research report on

In 2013, eight new companies received direct selling licenses from the government. Thus, the total number of direct sellers rose to 41 by the end of December. The new players are: Guangdong Jiuji Biotech Co Ltd; QuanJian Natural Medicine Science and Technology Development Co Ltd; Shenzhen Vigor Technology Group; Ten Fu Ten Max (Xiamen) Biotechnology Co Ltd; Synsun Health Industry Co Ltd; Tianjin Kangting Bioengineering Co Ltd; Shanghai Spring Town Biotechnology Co Ltd; and Merro International Co Ltd. However, in 2013, Avon China, the first player to obtain a direct selling licence, transformed its business to become a beauty specialist retailer.

Despite a retail value share loss of four percentage points in 2013, Amway (China) remains the leading player in direct



selling with sales of RMB26.4 billion. In January 2013, Amway increased its number of SKUs (stock keeping units) with 13 new products. Similar SKU growth was recorded in March 2013. The company also added 27 new products in November 2013 and six new products in December 2013. In terms of Amway´s permitted sales regions, new low-tier cities in North and Northwest provinces were approved by the government, such as Gansu, Ningxia and Qinghai.

Over the forecast period, direct selling is expected to post a 12% constant value CAGR. In addition to the eight new players with direct selling licenses, other companies, such as Conba Group and CNI (China) Daily Cosmetics Co Ltd, have submitted applications to the Ministry of Commerce. Meanwhile, many leading manufacturers will continue to expand their approved business areas and launch new products to attract consumers. As direct selling is highly controlled by the government, which issues approved region and product lists, policy changes may provide a threat to direct selling in the forecast period.

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