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Opportunities and Challenges for Direct Selling Operations in China

Opportunities and Challenges for Direct Selling Operations in China. Harry Yeung Caring International (Hong Kong) Ltd. September 30, 2003. Since 1888. Founder. Third & Fourth Generation. Second Generation. Nanshui, Zhuhai, 1888. Headquarter: Hong Kong. Business of LKK Group. Sauce

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Opportunities and Challenges for Direct Selling Operations in China

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  1. Opportunities and ChallengesforDirect Selling Operationsin China Harry Yeung Caring International (Hong Kong) Ltd. September 30, 2003

  2. Since 1888 Founder Third & Fourth Generation Second Generation

  3. Nanshui, Zhuhai, 1888

  4. Headquarter: Hong Kong

  5. Business of LKK Group Sauce Business Health Business

  6. LKK Health Products Group Caring International Guangdong Nanfang Lee Kum Kee Health Business

  7. Approved as direct selling company in 1996 Stopped direct selling in 1998 Adapted wholesaling and retailing in 1998 Guangdong Nanfang Lee Kum Kee

  8. History of Direct Selling in China – (1) Late 80’s Direct selling started 1995 Ban of direct selling 1996 Reopen direct selling & approved 41 companies

  9. History of Direct Selling in China – (2) 1998 Ban of direct selling 1998 Conversion regulations & approved 10 companies with new operation model

  10. - Drafting of direct selling legislation is underway to fulfill China’s WTO commitment on sales away from a fixed location Opportunities – (1)

  11. One of the world’s fastest growing economies GDP grew from approximately RMB7.8 trillion in 1998 to reach RMB10.3 trillion in 2002, representing a CAGR of 7.3% Opportunities – (2)

  12. Population (billion) Urbanisation rate (%) Source: China Statistical Yearbook 2002 Opportunities – (3)

  13. A sizeable affluent group better education possess credit card / mobile phone / digital camera international travelling care for health and beauty willing to take up learning and money-making opportunities Opportunities – (4)

  14. Social and political stable Expanding elderly population Many entrepreneurs Opportunities – (5)

  15. Future direct selling legislation will be drafted according to China’s characteristics Challenges – (1)

  16. Poor social image due to confusion with “Chuan Xiao” Challenges – (2)

  17. Entry barriers set up own manufacturing plant guaranteed deposit overseas distributors were not allowed Challenges – (3)

  18. Business regulations keep changing Challenges – (4)

  19. Severe competition anticipated Ineffective self-discipline Challenges – (5)

  20. Live in China, among Chinese Localization of employees Learn by mistakes Manage external variables carefully Tips for Survival

  21. Strengthen government relations Be flexible and proactive in making changes Tips for Sustaining

  22. Thank You !

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