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Avon plans to test direct sales
http://www.sina.com.cn 2004/07/23 11:49  Shanghai Daily

  Avon Products Inc, a cosmetics direct-sales firm, confirmed yesterday that it has gained verbal permission from the Chinese government to test direct sales in the country.

  There has been a ban on direct sales for the past six years.

  The company declined to disclose more details of the experiment and what form the new business model will take.

  "We are currently working together with the Ministry of Commerce. We will inform (the media) when we have further details," a spokeswoman with the company said. "However to date, we have not received any official document."

  Both Amway (China) Co Ltd and Nu Skin (China) Daily-Use and Health Products Co Ltd, said yesterday that they hadn't received similar permission.

  Industry insiders said Avon, which has around 5,700 specialized stores and counters across the country by the end of June, has opened the most locations of any direct-sales firm. This is speculated to be the major reason why Avon has received the trial permission earlier than other companies.

  Avon said in a previous interview that China is one of the most exciting markets and forecast its sales in China to hit more than US$400 million by 2007.

  A meeting organized by the Ministry of Commerce along with major direct-sales companies is expected to take place in Xiamen, Fujian Province, in September to work out the draft of new legislation, Shanghai Daily has learned.

  The once-disputed business of direct sales in China will be controlled and regulations are expected to be in place this year. This will promote the growth of regulated direct sales and fulfill China's commitment to the World Trade Organization.

  Under the regulations, which will be drafted jointly by the MOC and the nation's General Administration for Industry and Commerce, direct selling is to be strictly distinguished from the notorious pyramid schemes.




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