Avon sets up operations in Beijing

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BEIJING -- U.S. direct sales marketer Avon has officially opened its Beijing branch. The cosmetics giant has already established a network in more than 40 Chinese cities.

During trial operations in July, the Beijing office registered the firm's second largest monthly sales volume in China after Guangzhou. The world's top direct-sales cosmetics company, Avon became the first company of its kind to enter China when it opened a Guangzhou joint venture in 1990. Today it has more than 100,000 sales representatives across the country.

Avon is confident of its competitiveness in a market where direct-sales is getting more popular, according to Susan Kropf, the company's vice-president in charge of global marketing and business development.

Earlier this year, in its move to control the direct-sales market, the Chinese government gave Avon re-approval to conduct direct-sales business. Currently, 41 domestic and overseas enterprises are permitted to handle this type of business, while many other firms have closed. Direct sales firms active in China sell cosmetics, detergents, tonic products, health products and clothing.

High-quality products and affordable prices have led to Avon's success in China, Kropf said. Besides global products, Avon also manufactures skin protection products specially designed for Chinese women. China has a huge cosmetics market with more than 590 million women. However, the competition is severe with more than 2,000 producers, mostly joint ventures and township enterprises.

At present, China is still a small market for Avon, with annual sales of $40m, but it will develop into one of the largest markets after 2000, Kropt said. She estimated that Avon's annual sales volume in China may top $250m by 2000.

Copyright July 1996 Crain Communications Inc.

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