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Opportunities and Challenges for Direct Selling Operations in China Harry Yeung Caring International (Hong Kong) Ltd. September 30, 2003.

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Presentation on theme: "Opportunities and Challenges for Direct Selling Operations in China Harry Yeung Caring International (Hong Kong) Ltd. September 30, 2003."— Presentation transcript:

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2 Opportunities and Challenges for Direct Selling Operations in China Harry Yeung Caring International (Hong Kong) Ltd. September 30, 2003

3 Since 1888 Third & Fourth Generation Founder Second Generation

4 Nanshui, Zhuhai, 1888

5 Headquarter: Hong Kong

6 Business of LKK Group Health Business Sauce Business

7 Health Business - LKK Health Products Group - Caring International - Guangdong Nanfang Lee Kum Kee

8 Guangdong Nanfang Lee Kum Kee Approved as direct selling company in 1996 Stopped direct selling in 1998 Adapted wholesaling and retailing in 1998

9 History of Direct Selling in China – (1) Late 80’sDirect selling started 1995Ban of direct selling 1996Reopen direct selling & approved 41 companies

10 History of Direct Selling in China – (2) 1998Ban of direct selling 1998Conversion regulations & approved 10 companies with new operation model

11 Opportunities – (1) - Drafting of direct selling legislation is underway to fulfill China’s WTO commitment on sales away from a fixed location

12 Opportunities – (2) - One of the world’s fastest growing economies - GDP grew from approximately RMB7.8 trillion in 1998 to reach RMB10.3 trillion in 2002, representing a CAGR of 7.3%

13 Opportunities – (3) Population (billion) Urbanisation rate (%) Source: China Statistical Yearbook 2002

14 Opportunities – (4) - A sizeable affluent group better education possess credit card / mobile phone / digital camera international travelling care for health and beauty willing to take up learning and money-making opportunities

15 Opportunities – (5) - Social and political stable - Expanding elderly population - Many entrepreneurs

16 Challenges – (1) - Future direct selling legislation will be drafted according to China’s characteristics

17 Challenges – (2) - Poor social image due to confusion with “Chuan Xiao”

18 Challenges – (3) - Entry barriers set up own manufacturing plant guaranteed deposit overseas distributors were not allowed

19 Challenges – (4) - Business regulations keep changing

20 Challenges – (5) - Severe competition anticipated - Ineffective self-discipline

21 Tips for Survival Live in China, among Chinese Localization of employees Learn by mistakes Manage external variables carefully

22 Tips for Sustaining Strengthen government relations Be flexible and proactive in making changes

23 Thank You !


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