Based on the Voice of China “Central Broadcasting Information” report, Avon lately bought its “headquarters” North American enterprise for US$170 million, and its gross sales in China aren’t optimistic. There are rumors that it’s imminent to withdraw from the Chinese language market. so?
Let’s check out Avon’s efficiency first. The annual report launched on November 4 confirmed that Avon’s third-quarter loss reached 697 million US {dollars}, or about 4.4 billion yuan, and lowered its full-year efficiency expectations. On the similar time, the Chinese language market, which has been adjusting, additionally led the decline within the Asia-Pacific area within the third quarter.
Actually, from 2011 to 2014, Avon China’s gross sales had been 1 billion yuan, 700 million yuan, 600 million yuan, and 350 million yuan. On this manner, attempting to reverse the predicament, however the outcomes aren’t passable. Intensified competitors within the cosmetics trade has additionally made efficiency tougher.
Avon was as soon as one of the vital well-liked manufacturers in its heyday as a direct promoting firm with greater than 6 million gross sales representatives worldwide. Nevertheless, lately, with the rise of e-commerce, Avon’s well-known direct gross sales mannequin is unsustainable. As well as, due to the alleged bribery scandal, many senior executives of Avon in China had been suspended, which exhibits that Avon has fallen into a number of difficulties in China. The trade predicts that Avon’s market in China could also be over.
In the course of the New Yr’s Day, the reporter tried to contact Avon’s exterior enterprise division in response to the web site supplied by Avon’s official web site. However the cellphone has been unanswered. Beforehand, some reporters contacted Avon to inquire in regards to the total sale, however the different occasion mentioned that that they had not acquired any discover from the group in the interim. The reporter then transferred the query to the Avon Model Division, however no reply was acquired as of press time.
As early as 2010, Avon China’s channel mannequin started to vary, and commenced to modify to a full direct gross sales mannequin. This additionally implies that Avon is attempting to do away with the burden of 4,000 specialty shops, the battle between Avon and its sellers has additional intensified, and the variety of shops has dropped sharply. At current, there are only a few Avon shops in Beijing that use the map to go looking. The reporter got here to a retailer close to Dongdaqiao, Chaoyang District, Beijing this morning in response to the map, however searched across the workplace constructing marked by the shop, however didn’t see the signboard. A close-by parking administrator mentioned that the shop had been closed for greater than a 12 months.
Avon is the primary established overseas firm to acquire a direct promoting license in China. Nevertheless, why did the previous overseas manufacturers lose their glory?
In 1990, Avon, which claimed to know ladies higher than ladies, entered China. At the moment, home high-end cosmetics had been nonetheless scarce. Avon shortly occupied the Chinese language market with its direct gross sales mannequin. Hiring feminine direct sellers to promote merchandise and defeating the modern and stuttering Miss Avon shortly grew to become a magic weapon for Avon to win. till 1997, Avon recruited direct gross sales as soon as as excessive as 350,000 folks, and Avon China’s annual turnover reached 1 billion yuan. On February 22, 2006, Avon obtained its first direct promoting license.
From the angle of time, Avon may be thought to be very certified, whether or not it’s a foreign-funded cosmetics firm in China or a direct gross sales firm. Nevertheless, the efficiency studies of Chinese language direct promoting firms prior to now 4 years present that from 2011 to 2014, underneath the development of the general efficiency of China’s direct promoting trade rising 12 months by 12 months, solely Avon’s direct promoting firm’s efficiency continued to say no inside 4 years.
Business analysts say that the poor efficiency of Avon China prior to now few years just isn’t unrelated to the “bribery gate” incident that started in 2008. In 2008, Avon Group acquired a discover to launch an inside investigation on Avon China’s suspected industrial bribery. After the “Bribery Gate” incident, Avon China skilled a sequence of personnel adjustments and enterprise changes. Gao Shoukang, Avon’s former president of the Higher China Area, was very accustomed to the Chinese language market. A number of folks on the helm had been despatched, however it could be due to elements equivalent to their lack of awareness of the Chinese language market. Mainly, each new incumbent is adjusting its technique in China, which has precipitated Avon China to vacillate between retail shops and direct gross sales. , efficiency continued to say no. It’s usually believed within the trade that the dearth of an correct model technique is the decisive issue for Avon’s full failure within the Chinese language market.
At present, Avon’s model has aged. Most post-80s and post-90s consider that Avon is a model for moms, and every kind of decline level to at least one outcome: Avon’s withdrawal from the Chinese language market is barely a matter of time.
Extra details about Avon withdrawing from China’s magnificence model
