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IT was a job offer that anyone would find alluring. "Tired of working for others?" asked the ad in one local magazine, which went on to offer a "fast money making opportunity ... to start own business without investment." It was an ad to join a network marketing group. Yet while it is a multi-billion dollar business worldwide - and offers of fast money are commonplace - network marketing is not legal in the Chinese mainland. This has forced worldwide network marketers such as Nu Skin, Amway and Avon to shift into shops in China and sell directly to customers. After nine years of careful efforts and a US$80 million investment, its biggest ever outside the US, Nu Skin finally opens its first sales shops in China next month. And its worldwide network marketing style is nowhere to be found. "The sales mode of Nu Skin in the Chinese mainland is to open exclusive shops and hire sales representatives," said a Nu Skin spokesman. The company is adamant that there will be no network marketing allowed in China. Network marketing sells products that can earn the sales person a commission. The controversial aspect is that sales people can earn a percentage of the income generated by people they sponsor into the sales programme, which is commonly called a "downline". However, the Chinese Government has labeled network marketing as pyramid selling, and banned it completely. However, with existing Nu Skin sales people around the world eyeing the Chinese market, the company has been careful to hold them out of the Chinese market. "Those sales representatives coming from Hong Kong, Taiwan or abroad are not allowed to conduct selling here," maintained the Nu Skin spokesman. "They come here only to train and help the local sales representatives." Yet there are scattered attempts by overseas network marketers to work in China, even without official sanctions from the companies. The person who placed the ad was looking for people to join him, and help him sell Nu Skin. Yet such meetings are few and far between, despite strong interest by network marketing people outside the Chinese mainland, especially in Hong Kong and Taiwan. To keep network marketing out of the Chinese mainland, Nu Skin has tackled the network marketing issue head on with its overseas distributors. At a global conference in the US in September, the company held special training sessions on the China market, which attracted 9,000 sales people. They were handed training packets and even VCDs explaining its sales system for the China market, meaning direct store sales and no network marketing. "The government remains comfortable with our business model and is impressed with our efforts in formulating strict policies to control our operation and providing guidance to our sales people," Nu Skin Greater China president Corey Lindley told distributors. Nu Skin is hoping its stores alone can bring good returns, with sales volumes next year projected at 249 million yuan (US$30 million), with the figure eventually growing tenfold. (Star News) |
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