China’s direct sales market began with the entry of Avon in the 1990s. But the industry plunged into chaos with rampant pyramid schemes, prompting the government to ban the industry altogether in 1998. The ban was lifted in 2005.
Since the ban was lifted, direct marketing has expanded rapidly, with an average annual growth rate of 30 percent. China’s direct sales market is likely the world’s third or fourth biggest behind the United States, Japan and possibly South Korea, said Hu Yuanjiang, executive director for direct selling at China Health Care Association.
After 2005, the industry grew to employ 2.3 million salespeople within seven years. In 2012, the country had 32 licensed direct selling companies with combined sales of nearly 20 billion yuan ($3.2 billion), according to the Chinese Commerce Ministry.
The growth can be