Avon Awarded First China Direct Selling License

Canada.com:

Avon Products Inc., the world’s largest door-to-door cosmetics distributor, was awarded China’s first licence for direct selling after the government lifted a seven-year ban on the practice.

The New York-based company’s permit was issued on Feb. 22 and seven of Avon’s employees were granted licenses to train sales people in direct selling, the Ministry of Commerce said in a statement on its Web site today.

Avon gains a head-start on rivals such as Mary Kay Cosmetics Inc. and Nu Skin Enterprises Inc. that are waiting to start door- to-door sales in the world’s fastest-growing major economy. China on Dec. 1 lifted a ban imposed in 1998 to wipe out pyramid schemes that caused individuals millions of yuan of losses.

“We are still waiting for the government’s formal notice on the license approval and hope it will arrive soon,” Avon (China) Co. Vice President Sun Changqing said in a telephone interview. “We have no comment on its possible influence on our business before we know more details.”

Avon, headed by Chief Executive Officer Andrea Jung, was the first company cleared to test direct sales in China in April and was also selected to help the government frame rules for the business. The U.S. company, which said it has hired 3,000 sales people in the nation, began trial sales in Beijing, the nearby port city of Tianjin and the southern province of Guangdong.