2015-07-21 11:47
Avon in China: bribery incident difficult dilemma results in a complete mess
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[CNDSN7 21 -- (new financial observation) who wore the "cosmetics direct sales giant halo of Avon (China) Co., Ltd. (hereinafter referred to as: Avon Avon China). Today, regardless of in the direct selling industry and cosmetics industry, have been lost former attention. Even if not, sometimes not so good news, Avon almost forgotten.
Decline in performance
Recently, AVON was raised again, is due to its group headquarters in the international market for a sale.
Recently, Avon group will be its British skincare brand Liz Earle to 1.4 million pounds sold to Walgreens Boz associates, and said, the sum of all cash transaction revenue will be used for a $2.5 billion note redemption 2016 due in March. But in the outside world, Avon group is just the solution to improve the overall performance is not as pressing danger, continuing losses.
Public data show that from 2012 to 2014, AVON group has lost three consecutive years of losses. While its 2015 first quarter loss limit is reduced compared with last year, but has not changed the situation of loss.
Loss, the overall situation is facing AVON group. Specific to the Chinese market, AVON's performance is not optimistic.
AVON began to expand its business in China in 2006, the first direct selling license in China in 1990. From the time, regardless of the foreign cosmetics companies in China, or in direct sales companies, AVON are considered qualified.
However, in the past four years, China's direct sales company performance report, from 2011 to 2014, AVON's performance in China is 1000000000 yuan, 700000000 yuan, 600000000 yuan and 350000000 yuan. In China's direct selling industry as a whole performance of the trend, only AVON a direct sales enterprise performance continued to decline in four years. In stark contrast, 2014, Avon China to 3.5 billion yuan performance ranked 34th, the performance far below ranked one and two of the Amway China and perfect China's 287 billion yuan and 225 billion yuan; back back to more than ten years ago, the performance and status was also comparable, often be outside the industry to bring the comparison.
"Avon Chinese several years' performance in a complete mess with it, 'began in 2008' bribery 'events are not unrelated." A direct sales industry to the new financial observation reporter said. 2008, AVON group announced that AVON China is suspected of commercial bribery, has launched an internal investigation.
'bribery' event occurs, Avon China experienced a series of personnel changes and business restructuring, Avon to the original big China area president are s. K. Kao very familiar with the Chinese market, in his due to 'bribery' after leaving, Avon group successively from the overseas market sent several bits at the helm, but may they for the Chinese market enough to understand, basically every new broom are in the adjustment strategy in China, Avon China in retail stores and direct sales between wavering, performance has been declining. " Above direct sales industry insiders bluntly. By the end of 2014, Avon group final confirmation in China bribery tens of millions of yuan, and agreed to pay about $8.3 billion related civil and criminal charges to reach a settlement.
In April 2014, the general manager of AVON Taiwan District, Ye Jinghui, President of AVON Greater China, and put forward in the Chinese market to open up market channels. But according to relevant media reports, over a year now, but not yet in the mainstream shopping malls to see AVON counters.
Scenery no longer
Avon group so far, more than 100 years of history in the Chinese market has also been 25 years and can be referred for veteran cosmetics direct selling enterprises, but in now the direct selling industry and cosmetics industry, Avon has been out of favor.
A number of direct selling industry, media said: "now don't pay much attention to the Avon the, its business total in the adjustment seems completely can not find a way out, feeling very miserable, it in the domestic direct sales industry basically no status."
Cosmetic experts fengjianjun also said: "(strictly sense,) I don't think Avon is a cosmetics company, before it promotion is dominated by direct, later became the franchise, is atypical format; Avon in our industry pays close attention to very low now few in the industry to it as a conversation piece, a topic to discuss; and, combined with the Avon in China sales turnover and market share etc., it can be said, it is lost in China's market strategy."
According to AVON's official disclosure of information, which has a total of 15 stores in Tianjin City, the new financial reporter visited one of the two AVON stores. According to the shop owner, AVON's cosmetics price ranging from tens of dollars to several hundred dollars, the low in the high-end, what price are people buy". But had opened a AVON store, said: at that time I was selling more than twenty or thirty dollars in the body milk, etc., hundreds of pieces of cream rarely sell."
An interesting phenomenon is that although the sign of the AVON store, but these two stores and not only sell AVON products, but AVON and Amway and other products based. Perhaps more than Tianjin, the two stores, a consumer in Shanghai said: "original Avon brilliant, downstairs in the Avon store sold its own products, later to die, stores sell Amway etc. products, rent a large shops do nail; before Avon will send a representative to patrol, the shopkeeper training, would now be regardless of the and even employees of stores are not selling Avon products."
Puzzling is that when asked about direct sales, a number of AVON store owner's statement are: AVON now only store, no direct sales." And AVON national service hotline staff said, including retail stores and direct sales, AVON are doing, as to what kind of channels to do more, and no detailed statistics.
An advertising industry two years ago had said: "after the year 2000, you can still see the Avon brand advertising, but now, Avon's advertising in all media almost extinct." Now, in the eyes of the people, the situation has not been improved, "no according to the trend of adjustment of brand strategy, brand Avon has aging, many post-80s and post-90s will think, Avon is a generation of people" brand.
To date, Avon Chinese not on the new financial reporter observed the interview letter. 3
(original title: Avon in China: difficult dilemma bribery incident results in a complete mess)
Editor: Wan Wan
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