March 1, 2006

Beijing lifts 6-year ban on door-to-door direct markting/sales…Avon ladies rejoice!

Filed under: Direct Marketing — Administrator @ 3:58 pm

Last week, China’s Ministry of Commerce gave Avon Products the thumbs up to resume door-to-door direct sales in China. In 1998, Beijing outlawed direct sales after a rash of “pyramid schemes” surfaced. This move paves the way for other companies to resume direct marketing operations.

Victor Mallet, a Financial Times reporter, published an article on Tuesday titled, “The flight to Asian cities needs managing not curbing” suggests:

…there will be an additional 300m to 500m people, equivalent to the entire population of western Europe, are expected to move to towns and cities from the countryside by 2020…

At last count, Avon had a global sales force of five million independent reps; Avon expects the addition of new China based reps will ratchet this number significantly higher over the next decade.

In some bizarre twist of fate (and this might be a stretch, but here goes) the resumption of direct marketing in China might not only elevate entrepreneurial spirit but also (in some small measure) help stem the flow of x number of migrants running to the cities for employment – it reasons that the sheer number of direct marketers needed to serve a nation of 1.3 billion people must number in the millions – mass hirings by direct marketers (e.g. Avon) in the larger towns/villages might keep a portion of these migrants at bay (i.e. “I have a regular client base near my family…”) or at the very least, increase the number of traveling salespeople constantly on the go (i.e. “have sample bag…will travel”).

We dislike being predictable, but since we don’t have a creative bone among us (queue popular Chinese proverb) :

“Give a man a fish, and you’ll feed him for a day. Teach a man to fish and he’ll sit in a boat and drink beer all day…”

Woops, wrong Chinese proverb…try this one:

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime…”

In other words, Beijing has either found an interesting tool to reduce the number of urban migrants or just created a nation of fast food eating, Motel 6 sleeping, traveling salespeople…

With all of the above noted, what happens to this sales force with the proliferation (er, what proliferation?) of ecommerce? It may not be an issue today but 5 to 10 years down the line it might just very well be…gosh, predicting future trends in China is so confusing…

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