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Avon in China

This article was originally published in The Tan Sheet

Executive Summary

Company to operate as wholesaler/retailer under a new business licensing agreement between the company and the Chinese government following an April 21 ban on direct selling in the country. Avon will operate as a wholesaler to Chinese retail stores and convert its approximately 75 distribution centers into retail stores to directly serve customers. Avon was the first direct seller in China in 1990 and today boasts 50,000 representatives. Company sales in China in 1997 were $75 mil., or about 1.5% of the company's total. Avon has invested between $70 mil. and $75 mil. in China in the last eight years. Amway also was offered the wholesaler/retailer option, but the company has decided to continue negotiations on its "optimal plan" that would continue to provide income opportunities for the 80,000 Amway reps in China. The company has invested $100 mil. in China in the last five years...
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