2016-01-13 15:27

 

The sale of AVON Brokeback self-help ＂base camp＂ in the global market with Chinese

 

[straight news network Beijing on January 11 hearing (China business newspaper) after sell major stakes in the "base camp" North American operations to $1.7 billion, once direct sales giant Avon, the main market only support business in China is still.
However, China's direct selling industry has not been given this once giant optimistic evaluation, all with "AVON is about to exit the Chinese market" and other arguments on AVON's future is bleak.
However, "China runs a newspaper" the reporter contact to the Avon China, the responsible person, the responsible person said, the progress of the work of the Avon good, did not get the "withdraw from the Chinese market" notice, progress in the affairs of the company is good. In the future, Avon will in China to do the main retail and business, direct sales business, though still continues, but only sell health food, impact on the total business of Avon limited.
This means that the Avon basically have given up direct sales business and by way of arm of business in North America to save China's retail business. As the first to enter China's direct selling giant, AVON's direct selling market will be China's direct selling industry to produce what kind of impact?
Get lost
As the "direct management Ordinance" promulgated after the implementation of the first approved get direct selling license qualification of direct selling enterprises, Avon to give up the Chinese market argument may be too pessimistic, in fact Avon China still in trying to transition retail electricity providers to restore the decline.
In recent years, Avon global business will continue to shrink, in addition to the 80.1% stake in the company's North American business, at a price of $1.7 billion sale to give private equity giant Cerberus capital management, to save the results, since 2012, Avon in the continuous decline in performance out of overseas markets and layoffs. In December 2012, Avon layoffs 1500 people, to withdraw from the market in Korea and Vietnam; April 2013 and 12 months, Avon has laid off 400 and 650 people, the withdrawal of the Irish market, closed at the same time in Europe, the Middle East and Africa, part of the business.
However, even so, Avon still couldn't save the huge loss of decline, Avon group in 2015 to November 4, released the annual report, the third quarter losses reached $697 billion, $44 billion yuan, China is become Avon in the Asia Pacific region led the declines in the market.
In 2011 ~2014, AVON China's annual total sales were 1 billion yuan, 700 million yuan, 600 million yuan and yuan. Chinese GDP soared 4 years, AVON's sales tumbled nearly 2/3.
Over the years, Avon in China by "direct + retail mixed channel model, not only by the industry regarded as nondescript, between the two channels indeed been conflict. Whether it is China, former president of "return to direct transformation plan, or is its current president, John Lin," to strengthen the retail "transformation of ideas, are intended to solve the two channels between the right-hand fight each other phenomenon.
For Avon China business model will continue to swing state, once in the Amway done years of direct sales business in the industry anti MLM people laugh non told reporters, Avon has as a global direct boss, of course, know multi-level direct selling is the charm of the direct selling industry, but in the game with Chinese government's direct sales policy, Avon appear several times of miscarriage of justice.
"In 1998, the prevalence of the domestic marketing, the Chinese government promulgated the prohibition of pyramid schemes, for all direct marketing enterprises take the one size fits all measures, taken by the Avon measures is the dissolution of the Avon lady team, development of Avon store; while the other has been pin giant Amway take all the Amway direct sales personnel and signed a contract to become Amway distributors, Amway although transformation operating shops, but the shop was transformed as the delivery center, Amway's direct selling model still has not changed. Avon if you have been to join the chain of the way down, the development is very good, but in 2004 the industry rumors - the Chinese government is the introduction of direct selling regulations, Avon judgment China may let loose the multi-level direct selling to secretly develop multi-level direct sales team, that retail stores and direct sales team for their respective interests fight each other situation. " Xiaofei think business model led to waver in determination, AVON business dilemma now.
Another big mistake is the frequent replacement of AVON executives.
Non laugh told reporters, Amway as a family business, 1992 in China has been 24 years of history, the Chinese District CEO Mrs Eva Cheng in office 21 years, the Amway in China business strategy of sustainable and stable, and Avon as a listed company in the United States, after 1989 into China, every two or three years for a leader, even the board of directors of the listed company will each for a chief executive, will China personnel shock caused by the.
Decline
For Avon continue to be exposed in the recent news, once for Avon certification of the Ministry of commerce also began to publicly said that Avon relevant rumors or Xiang Yafang confirmation is appropriate, Avon China has in China's continued operation for 25 years, in recent years mainly adopts the traditional marketing model to carry out business. It is understood that AVON China is through the continuous improvement of product quality, improve the marketing network to promote the company's business in China to maintain sustained growth.
This statement also confirms the Ministry of Commerce AVON has long abandoned the direct business, and chose the traditional retail sales channels such as retail. But the market did not give AVON the opportunity to leave, the AVON era may have long gone.
In Avon's decline, the non laugh told reporters, Avon's decline and exit, for China's direct selling market is not necessarily a good thing, Avon although has experienced the retail and direct conflict door, bribery and other percussion makes China direct sales business will continue to decline, but its compliance with China's direct selling regulations in the single level direct sales model should certainly be, now the lost Citadel and lost the impasse over the Chinese market, will make the domestic direct sales industry more believe in multi-level direct selling party to the existence and development of the concept, the future still will appear more and more direct refugees.
For AVON out of direct marketing, direct selling industry independent research experts Tianwen is more outspoken. He told reporters: "as China's first direct sales model to enter the Chinese companies, it in 1990 created a format to start, and it now exit is that two things: Avon years to swing of two models -- hiring salespeople earn post marketing model, and attract small investors open store mode have been bankrupt; as a veteran of the listed direct selling enterprises, it is investment circles around the market the inevitable result is to lose the foundation of its centennial channel fans."
Of course, AVON's decline is also related to the industry's decline throughout the direct selling industry. Tianwen believes that Internet destroyed all rely on the information asymmetry to build out the unreasonable price channel, if it ever look very prosperous, and direct selling is such a typical channel mode. Since 2015, the Ministry of Commerce and the State Administration of industry and Commerce issued dozens of new direct selling licenses, but also completely changed in the past, the scarcity of direct selling licenses to bring relatively non normal competition.
In fact, the traditional direct sales have been in decline. As early as 2015, direct leading group of Amway declared 2014 companies with sales of $108 billion, a drop of 10% compared to 2013, and main income decline reason is the effects of reducing China's income and foreign currency exchange rate fluctuations. And the industry is expected in 2016 Amway Group China's business will continue to decline.
In fact, Amway's decline in performance is not isolated cases. Media of Guangdong, a veteran of the direct selling company responsible told reporters that a significant decline in the performance of the company in 2015, a substantial increase in the volume of personnel loss, a lot of business has almost ground to a halt. There are even even on a business trip, no one can send the situation.
Another Guangdong Jin new direct selling enterprises also can not be optimistic, vice president of the company told reporters that the company is cutting into the field of direct marketing from traditional business, just to get a direct selling license, but also rely on the new bonus system and preferential conditions to attract a group of team, time just over a year, team members the loss of speed in the growing.
Since the new and old direct enterprises are feeling the status quo is very difficult, so once hot direct marketing team have to go?
Tianwen told reporters that the viscosity of the direct selling industry is very high, usually a into the direct deep like the sea, doing direct sales people is hard to engaged in other formats work, so engaged in direct sales number is not less, but moved to the Internet the.
Tian Wen told reporters, with the evolution of the Internet marketing model of the new industry -- Taking micro morphology. With the change of the Internet and deepening for the new generation of 80, 90 favorite micro business model, the line or the market doubled, the development of the line to eat the real difference. The rise of the micro business representative of the new generation of power into another direct marketing model for the nature of the industry.
Because the micro business is not the traditional channels of regional protection, and no direct marketing organization ethics. Therefore, the rapid rise of the micro chamber of Commerce will quickly decline its value system. What is interesting is that the short-term phenomenon is the direct marketing and micro business combination, and even the direct marketing enterprise micro business of a short boom. One is the direct selling enterprises derivative, such as Ti micro business, and Amway, three, lvzhiyun...... On the other hand is the micro business enterprise direct marketing, such as the idea of a port to apply for direct selling licenses, the pursuit of its multi-level may bring the risk of suspected illegal marketing." The comments the Tianwen Shengxing derivative.
For the rising of the micro business, laughing, said the direct marketing industry to graft on the mobile internet marketing effectiveness, compared to face to face direct sales meeting will certainly be greatly reduced. However, due to its low organizational costs, the sale of the object to face the crowd even more uncertain, will attract more people to engage in this industry, the future will further increase the base number of refugees.
"Therefore, whether it is Avon fade out of the single level direct selling, or the decline of the traditional multi-level direct, or is emerging derivative, as long as the direct selling industry rules of incentive is established on to attract more of the other people on the basis of product sales, direct marketing industry will continue to emerge out of waging direct refugee." Laugh not to say.
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