Avon in China
This article was originally published in The Rose Sheet
Executive Summary
Firm will be well-positioned to operate complementary retail, direct sales businesses should ban on direct sales in China be lifted in early 2004, Avon CEO Andrea Jung asserts during Banc of America investment conference in New York Sept 26. Ban, instituted by China in 1998, is expected to be reversed under U.S.-China World Trade Organization accession agreements formed in April 1999 (1"The Rose Sheet" April 19, 1999, p. 9). Avon retail exposure in China reached over 5,000 points-of-sale within 18 months, largely enabled by existing system of 76 distribution branches. Jung envisions China to be a "big growth sector" due to brand strength, pricing and favorable demographics. Addition of direct-sales force on top of established retail business is "kind of a de facto, beautiful strategic...hybrid," she claims, pointing out direct-sales reps will focus on agricultural areas not served by existing retail operations...
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