中國直銷行業(yè)分析報告(ppt 42)

InsightsintoDirectSellinginChinaJune2010IntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsScopeIntroductionThisbriefingontheglobalretailingmarketcoversthefollowingchannels,focusingontheyear2009:Non-StoreRetailingGlobal–US$598billionChina–US$10billionVendingGlobal–US$60.5billionChina–US$0.6billionHomeshoppingGlobal–US$188.3billionChina–US$1.7billionInternetRetailingGlobal–US$243.5billionChina–US$1.7billionDirectSellingGlobal–US$106.1billionChina–US$6.1billionThecoreobjectiveofthisreportistoexaminethecurrentstateofthenon-storeretailingchannel,anddirectsellinginparticular,inChinainthecontextofthewiderretailmarket.Inadditiontoprovidingachanneloverview,thereportalsoanalysesperformancebyproductsector,andthestateofthecompetitivelandscape,keytrendsanddevelopments,andprospectsandopportunities.ThedataandanalysisarespecifictotheChinesedirectsellingchannel,andwhereappropriateandrelevantitlooksatgreaterdetailinbeautyandpersonalcareandconsumerhealthcare.Thedirectsellingchannelisexaminedintermsofforecastperformanceoverthe2009-2014period,withacloserlookat2009-2010specifically,identifyingkeyareasofopportunityintermsofproductsectors.ObjectivesIntroductionDirectsalesdominatenon-storesalesinChinaChinaisthefourthlargestdirectsellingmarketgloballyreachingsalesoverUS$6billionin2009,withthedirectsellingchannelaccountingforthemajorityofnon-storesalesinthecountry.Vitaminsanddietarysupplementsremainthebiggestcategory56%ofalldirectsalesinChinaaregeneratedbythegrowingvitaminsanddietarysupplementproductssector.AmwaymaintainsaclearleadingpositionAmwayaccountsfor46%ofalldirectsalesinChina,andisbyfarthebiggestplayer.ContributortogrowthChinawasthebiggestcontributortogrowthinAsia-Pacificin2009,addingUS$500millioninsales,andwassecondonlytoBrazilglobally.LegalframeworksupportsgrowthImplementationofdirectsellinglegislationhasspurredgrowthsince2005,andcreatedastableandmoresecureenvironmentforcompaniesandconsumers.FoodanddrinkproductsarethehottestFoodanddrinkproductssawthehighestgrowthratesoverthereviewperiod,peakingatover500%in2006.ThehighgrowthhascomemainlyfrommealreplacementproductslikeHerbalifeProteinMix.PricepremiumProductssoldbydirectsellersaretypicallymid-tohigh-endcomparedwiththoseofstore-basedretailers.Leadingdirectsellingplayers,suchasAmway,MaryKayandHerbalife,areallpositionedatthemidtopremiumendofthemarket.

KeyFindingsIntroductionIntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsChineseDirectSellingintheGlobalContextDirectSellingInChinaAmwayAccountsfor46%

ofalldirectsalesinChinaandisbyfarthebiggestplayer56.4%OfalldirectsalesinChinaaregeneratedbythegrowingvitaminsanddietarysupplementproductssector$6.1bnChina’sdirectsellingmarketisnowthefourthlargestgloballyFollowingtheunprecedentedcontractioninspendingduring2009,retailexpendituregrowthstalledtolessthan1%globally.Incontrast,China’sretailsalesgrewwellovertheaverageforAsia-Pacific,andtheincreaseof8%markedonlyaslightslowdownonpreviousyears.Thestronggrowthinnon-storesaleswasevenmoreimpressive,asthechannelwasmoredynamicthantotalretail–groceryandnon-groceryretailersalike,growthinsalesofwhichsloweddownduring2009,to6%and9%,respectively.China’sGrowthRemainsStrongChineseDirectSellingintheGlobalContextRetailingMarketSnapshot:Totalretailsalesin2009reachedUS$10.4trillionAsia-PacificretailingmarketwasworthUS$2.7trillionChinesemarketwasvaluedatUS$0.9trillionGlobally,Internetretailingisthebiggestnon-storechannelandthefastestgrowingone.TotalInternetretailingsalesreachedUS$244billionin2009,upby5%,despitethelessfavourableeconomicconditions.InChina,directsalesarebyfarthemostimportantnon-storechannel,with60%ofallnon-storesalescomingfromdirectsales.Non-storeinFocusChineseDirectSellingintheGlobalContextDirectSalesasShareofTotalRetailSalesChineseDirectSellingintheGlobalContextDirectSalesasPercentageofTotalRetailLessthan0.5%Between0.5%and1%Between1%and3%Over3%IntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsChinaisthesecondbiggestretailmarketinAsia-Pacificandthesecondfastestgrowingmarket,withthehighestcontributiontooverallgrowthinactualterms.DirectsalesinChinarosebyUS$500millionin2009,makingitthebiggestcontributorintheregion.Asiancountriesshowgreataffinitytothedirectsaleschannel,anditispopularbothindevelopedcountrieslikeJapanandindevelopingcountrieslikeChina.Directsalesareparticularlystronginmarketswithlessdevelopedretailsystem,ascataloguesandagentscanreachremoterurallocationslackingretailinfrastructureeasilyandcheaply.China–BiggestContributortoGrowthinDirectSellingFrameworkofDirectSellinginChinaIn2005and2006,manyoftheleadingdirectsellingcompaniessaleswerenegativelyimpactedbythenewregulations.TheleadingplayerAmway,forexample,sawsalesdeclinesharplybetween2005and2006.Resultsoftheregulatorychanges:Consolidationwithintheindustry.Increasingdifficultenvironmentforsmallerplayerstooperatein.Single-levelmarketingisnowthemostprevalenttypeofdirectselling.China’sdirectsellingmarketishighlyregulatedcomparedwithothercountriesintheAsia-Pacificregion.Thisisasaresultofgovernmentregulationondirectsellinginlate2005.Theregulationsforbidmulti-leveldirectselling,alsoknownaspyramidselling.DirectsellingcompaniescarryingoutactivitiesinChinaarerequiredtoapplyforalicencefromtheMinistryofCommerce.Togetalicence,companiesneedtofulfilatleastfourimportantrequirements:LegalFrameworkFrameworkofDirectSellinginChinaDirectsalesregulationsrequirements:RegistrationcapitalofnolessthanRMB80million.CapitalreservesaboveRMB20million.Monthlypaymentfordirectsalespersonnel,andcapsonbonuspayments.Specialretailoutletsinregionswherethecompanyhasdirectsellinglicencetoprovideeasyaccesstoprices,refundsorotherservicesforconsumersanddistributors.Person-to-personDirectsellingpersonnelcanprovidedetaileddescriptionsanddemonstrationsoftheproductstheysell,offeringtailoredservicetoconsumers.ConvenienceDirectsellerscansellanddelivertheproductsatthehomesoftheircustomers,whichisconvenientforbusyconsumers.UnprofessionalmannerInChina,asmanydirectsellingpersonneltendtobelesseducated,theylackskillinpresentingthemselvesinaprofessionalmanner.PerceivedaspushyInundergroundstationsoflargecities,suchasShanghai,frequentencounterswithdirectsellingpersonnelfromdifferentcompaniescanleadtoimpatienceamongcommutersandanegativeimpressionofdirectsellingasaformat,whichwillhaveanadverseimpactonthecompanyorbrandthepersonnelrepresent.ConsumerPerceptionsFrameworkofDirectSellinginChinaByJuly2009,24companieshadlicencestooperateasdirectsellersinChina.Between2008and2009,fourcompaniesreceiveddirectsellinglicences.Amongthefournewplayers,HarbinPharmaceuticalGroupandJiangsuLongliqiGroupCoLtdarealreadystronginstore-basedretailing,anddirectsellingisintendedtobeacomplementarydistributionchannel.JiangsuAlpayBiotechCoLtdandHarbinPharmaceuticalGrouparemainlyengagedinvitaminsanddietarysupplementsdirectselling,whileKelti(China)DailyNecessitiesCoLtdandJiangsuLongliqiGroupCoLtdfocusonbeautyandpersonalcare.DirectSalesin2009FrameworkofDirectSellinginChinaDirectsalesofhomefurnishingsandhousewaressaw40%valuegrowthbetween2008and2009.Thefoodanddrinksectorgrewata128%CAGRbetween2004and2009.ThisrapidgrowthcamemainlyfrommealreplacementproductslikeHerbalifeProteinMix.Vitaminsanddietarysupplementswasthebiggestactualcontributorbetween2004and2009,withanincreaseofRMB4.4billion.DirectsalesdynamicsoverthelastfiveyearsFrameworkofDirectSellinginChina194%521%IntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsHomefurnishingsandhousewarescategorysawthestrongestgrowthindirectsellingin2009.Inlate2008,Amwaylaunchedhigh-endcookingutensilproductsundertheAmwayQueenbrand.Bymid-2009,theindustrywasdescribingthislaunchassuccess.Thehighvaluesalesachievedbythissectorisinlargepartbasedonhighunitprices.SinglesetofcookwareproductsretailatapriceashighasRMB6,000.HouseholdGoodsEntertheMarketCategoryPerformanceSource:ADomesticelectricalappliancesdirectsellingunderperformedthemarketin2009.VorwerkistheonlydirectsellerofferingsuchproductsviadirectsellinginChina.Thelimitedproductchoicehashamperedsales.Accordingtoindustrysources,vacuumcleanersaretheonlyproducttypeavailablewithinthiscategory,andmanyconsumers,especiallyinruralChina,perceivevacuumcleanersasaluxuryproductratherthananecessity.VacuumcleanershavealowpenetrationinChina,lowerthanotherappliancessuchaswashingmachines,fridgefreezersandairconditioners.Unitpricesforthesevacuumcleanersareveryhigh,ataroundRMB3,000perunit.Inthecurrentmarketcontext,itisunlikelythattherewillbeanydynamicgrowthforthissectorindirectsellinginChinainthenearfuture.HouseholdPenetration:China%Households2009ConsumerAppliances2009FridgeFreezers48.1Refrigerators25.5AutomaticWashingMachines56.3Dishwashers3.0UprightVacuumCleaners5.1CylinderVacuumCleaners12.3WetandDryVacuumCleaners7.8HandheldVacuumCleaners0.6RoomAirConditioners39.3LimitedProductRangeinConsumerAppliancesCategoryPerformanceCleaningApplianceSeriesVK35CleanHostDailyfloorcleaningcare,aswellAsabovegroundfurnishingscleaningdustCleaningApplianceSeriesEB351DeepCleaningMachineDeepcleaningcarpets,mattressesandotherfabricsinhibitthepropagationofdustmitesandreduceallergens.HigherpricepositioningHigherqualityPremiumimageMoresophisticatedproductsSophisticatedingredientsortechnologyProductssoldbydirectsellersaretypicallymid-tohigh-endcomparedwithstore-basedretailers.Theproductsoftheleadingdirectsellingplayers,suchasAmway,MaryKayandHerbalife,areallpositionedinthemiddletopremiumpricerange.DirectSellersMaintainaPremiumCategoryPerformance50%PricepremiumPriceComparisonStoreBrandsDirectSalesBrandsYangshengtang:RMB0.88perunitNutriliteBioCPlus:RMB1.6perunitCentrum:RMB1.1perunitNutriliteChewableMulti:RMB1.8perunitL'OréalWhitePerfect:RMB1,200perlitreArtistryPureWhiteMoisturizer:RMB3,700perlitreL'OréalPlénitudeHydrafresh:RMB2,200perlitreMaryKayTimeWiseAge-FightingMoisturizer:RMB3,980perlitreIn2009,vitaminsanddietarysupplementsaccountedfor56%ofdirectsalesinChina.In2009,directsalesofVDSgrewby9%.ThiswasmorethandoubletheoverallgrowthofthesectorinChina(4%).Amwayistheleadingplayer,with16%ofvaluein2009,upfrom14%in2008.Healthygrowth,aswellaslucrativeprofitmarginsindirectselling,havealreadyattractedmanytraditionalmanufacturerstoapplyforlicencestoextendtheirbusinessesintothischannel.TraditionalVDSplayersareenteringdirectsalesandapplyingforlicences.Betweenlate2008andearly2009HarbinPharmaceuticalGroupandJiangsuLongliqiGroupCoLtdobtainedlicencestooperateviadirectselling.TheVDScategoryisrelativelynewandrequireson-siteperson-to-personexplanationoftheproducts’benefits.Thedirectsellingchanneliswellplacedtomeetthisneed.VDSDirectSalesContinuetoAttractsNewPlayersCategoryPerformanceStoreSalesSufferedin2009CategoryPerformanceIn2009,asaresultoftheaggressiveexpansionofdirectsellingplayers,suchasAmway,InfinitusandHerbalife,bricks-and-mortarstoresalesofvitaminsanddietarysupplementssuffered.Directsalesgrowth–8.8%BeautyandpersonalcareisthesecondlargestcategorywithindirectsalesinChina.DirectsalesofbeautyandpersonalcareamountedtoRMB16billionin2009.TheinternationalplayersAmway,AvonandMaryKaydominatedirectsalesinthecategory.Skincarewasthemostimportantcontributortocategorysalesin2009witha60%shareofvaluesales.Colourcosmetics,haircareandbathandshowerarealsoimportantcontributorstosales.BeautyandPersonalCareDirectSalesCategoryPerformance Furthertotherightcategorieswithmuchstrongergrowthindirectselling:deodorantswith32%,skincarewith21%,andcolourcosmeticswith14%.AlltheseproductshavealsoahighshareofdirectsalesinChina.BeautyProductsGrowthandSharesCategoryPerformanceNote:SizeofthebubblerepresentspercentageshareofdirectsellingincategorysalesThebubbleforMen’sgroomingcategoryistoofarontherighttofitontothechart,duetoexceptionallystronggrowthrate.Men’stoiletriessuchasmen’sskinandhaircareareanewandexcitingterritoryforpersonalcareindustryplayers.IntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsCorporatestrategiesinDirectsellingCompetitiveLandscapeCorporatestrategiesindirectsellingWideproductrange,multiplecategoriesProductspecialist,nichepositioningAdditionaldistributionchannelsImageandbrandbuildingvsproductandpriceofferAmway–UndisputedLeaderCompetitiveLandscapeTherearesimilarnumbersofmultinationalanddomesticplayersamongthetop10playersindirectsales.Multinationalcompanies,suchasAmway,AvonandMaryKay,havefocusedmoreonbuildingupsuccessfulbrandsandgrowingtheirdirectsellingbusinessesacrossthecountry,whiledomesticplayers,suchasInfinitusandTianjinTianshi,haveputmoreeffortsintotheirproductportfolios.Newentrantsfromtraditionalstore-basedchannelswillraisethelevelofcompetitionindirectselling.HarbinPharmaceuticalGroupandJiangsuLongliqiGroupCoLtdarewell-knownmanufacturingcompaniesinvitaminsanddietarysupplementsandbeautyandpersonalcareinChina.Highbrandawarenessforthetwocompaniesgivestheirdirectsellingpersonneleasieraccesstotheirtargetedconsumers.Amwaycontinuedtoleaddirectsalesin2009,with46%ofvalue,thanksmainlytoitseffortsinproductinnovation,aswellasstrongsupportthroughmarketingactivities.Itscorebusinessincludesbeautyandpersonalcare,vitaminsanddietarysupplementsandhouseholdcareproducts.In2009,strongdouble-digitgrowthwasseenwithinitsbeautyandpersonalcareproductlines,especiallyforskincare,undertheArtistrybrand.Thiswasaresultofaheavymarketingcampaignfromthecompany,aswellasfrequentproductupgradingtargetingthemostdynamicanti-ageingsubsector.PriceincreasesalsocontributedtothehighvaluegrowthoftheArtistrybrand.However,therealstarperformerof2009wasthecompany’sconsumerhealthproductbrandNutrilite.Amwayheldaround10%ofthetotalconsumerhealthmarketinChinain2009.TheNutrilitebrandrepresentedoverhalfofAmway’stotalsalesinChina.Nutriliteistheleadingbrandinvitaminsanddietarysupplements,inChinawitharound13%ofvaluesales.ThebrandenjoysveryhighbrandawarenessinuppertiercitiesinChina,thankstoyearsofmarketingefforts,includingTVads,celebrityendorsementandsponsorshipofsportsevents,suchasNutriliteHealthRunning.AstheleadingbrandinChina’sconsumerhealthmarket,Nutrilite’sproductlineshavebeenstableinrecentyears.Whileproteinpowderisreachingsaturationinthemarket,in2009,Amway’sfocuswasonthepromotionofitsmultivitaminsDoubleX,accompaniedbyadsonTV,instreetsandmagazines.AmwaylaunchedarefillpackforNutriliteDoubleXinMarch2009.AsaresultofthegoodperformanceofDoubleX,Amway’stotalshareincreasedfrom21%in2008to24%in2009.AmwayKeepstheMomentumCompetitiveLandscapeAstheleadingdirectsalescompanyinChina,Amway(China)CoLtdwillcontinuetoincreaseitspresenceattheupperendofthemarket,withthefocuslaidonitstwoflagshipbrandsofNutriliteandArtistry.Inaddition,Amwayseekstodiversifyitsproductrangesthroughinvestmentinnewproductlinesinairpurifiers,waterpurifiersandenergy-savingkitchenwares.Thecompanyhasexperienceddynamicgrowthinrecentyears,anditisexpectedthatitwillseeslightlyslowerbutstillhealthgrowthovertheforecastperiod,duetoitslongemphasisonsustainableoperationsintheChinesemarket.StrategicDirectionforAmwayinChinaCompetitiveLandscapeTiensBiotechGroupInc,withitsTiensbrand,lostgroundin2009,duetofiercecompetitionfromotherplayers,suchasPerfect,AmwayandInfinitus.Asanearlystarterindirectselling,Tienssufferedfrommaturityintermsofproductinnovation,marketingformatanddistributionchannel,whichpulleddowntheoverallperformanceofthecompanyin2009.Infinitus(LeeKumLeeCo)theBestPerformerin2009CompetitiveLandscapeInfinitus(China)CoLtdenjoyedthebiggestshareincreasein2009,ofoverhalfapercentagepoint,to6%.PositionedasadirectsellingplayersolelyprovidingtraditionalChinesemedicine(TCM)ingredients-basedproducts,Infinitussawstronggrowthduringthereviewperiod,asconsumersperceiveTCM-basedvitaminsanddietarysupplementstobehealthier.Infinitus,asapioneerinTCMingredients,hasappliedawiderangeofTCMingredients,includingwolfberryandroyaljelly,inInfinitusNuri-SuitSupplementMeal,benefitinghumankidneyandliverhealth.Meanwhile,italsooffersproductswithtraditionalChinesemagnoliavine,ginsengandtuberofdwarflily.Infinitus’brandawarenessremainsrelativelylowinChina’swellnessproductmarket,particularlyintierIcities,suchasGuangzhou.Infinitusismoreofalow-profilecompanywhichundertakesalmostnoadvertising,unlikeAmway,forexample.In2009,thecompanycontinuedtoorganisespeakingtoursbyexpertstopromotetheTCMconceptamongconsumers.Infinituspositionsitselfatthemid-to-higherendofthemarket.ThecompanypremiumiseditsproductlineswiththelaunchofInfinitusShizhenCapsulesinthesecondhalfof2009.Thesuper-premiumlingzhiproductInfinitusShizhenCapsulesretailsatRMB1,249for90units,andistargetedatbusy,affluentconsumerswhoareseekingwellnessproductswhichcanhelpcombatageingandenhancebodyfunctionality.NanfangLeeKumKeeCoLtdchangeditsnametoInfinitus(China)CoLtdin2009,tobepreparedforitsnextmovetodeveloptheglobalmarketin2010.Thecompanyhassettheambitiousgoalofbeingthenumberoneplayerinwellnessproductsintheworld,takingadvantageofitsdistinctivenessindevelopingTCM-basedproducts.InfinitusStrategicAmbitionsCompetitiveLandscapeAvon–largestdirectsellerintheworld

–isonlyrankedfourthindirectsalesinChina.Chinais,nevertheless,thefourthlargestgeographicalmarketforAvongloballywithsalesreachingRMB4.3billionin2009.InChina,Avonispresentinbothstore-basedretailandnon-storeretailingformats.In2009,almosthalfofitssalesinChinaweregeneratedthroughretailstores.Thecompanyoperates6,300retailoutletsinChina.Intermsofproductcategories,beautyandpersonalcareproductsarethefocusofAvoninChina,withskincarethekeyproductandmaingrowthgenerator.AlthoughAvonhashadapresenceinvitaminanddietarysupplementssince2005,itismainlyfocusedonbeauty-relatedvitaminsanddietarysupplements.Despiterecentattemptstolaunchnewproducts,sourcesindicatethatAvon’sVDSsalesarenotperformingwell.AvoninChinaCompetitiveLandscapeMaryKayinChinaCompetitiveLandscapeMaryKay’ssalesinChinareachedRMB3.6billionin2009.TheChinesemarketisoneofthemostimportantinthecompany’sgeographicportfolio.Thecompany–rankedfourthintheworld–isthesecondbiggestinChina.Skincareisthekeyproductareaandgrowthgeneratorforthecompany.UnlikethepreviouslyprofiledinternationaldirectsellinggiantsAmway,AvonandMaryKay,NuSkin’sbusinessinChinaisrelativelysmall,onlyrecordingaroundRMB526millionsalesin2009,rankingitin10thplace.InChina,thecompanyoperatesmostlyincolourcosmetics,skincareandhaircare,aswellassomevitaminsanddietarysupplements.ItsvitaminsanddietarysupplementsbrandPharmanexistargetinghigh-endconsumers.Forinstance,itschild-specificVDSproducts,PharmanexJungamals,sellatUS$36.6for120units,higherthanAmway’sNutriliteproducts.Duetoitsrelativelyhighprices,itisunlikelytoachievewidespreadacceptanceforitsproductsamongconsumerswithlowerincomelevels.Approximately80%ofitssalesrevenuesarederivedfromthetierIandtierIIcities,whereconsumerstypicallyhavehigherpurchasingpower.NuSkininChinaCompetitiveLandscapeIntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsTraditionalconsumerhealth,beautyandpersonalcareplayersareexpectedtoextendtheirestablisheddistributionnetworks,usingdirectsellingasacomplementarymethodtostimulatesalesgrowth.IndustrysourcessuggestthatJoincare,awell-knownconsumerhealthplayer,willenterdirectselling,aftersuccessfullyapplyingforalicenceduringtheforecastperiod.Beautyandpersonalcare,aswellasconsumerhealthwillcontinuetobethemaingeneratorsofrevenue.Housewareswillbethebestperformingcategoryintermsofvaluegrowth.DirectsalesispredictedtogrowataCAGRof8%inconstantvaluetermsbetween2009and2014,outperformingoverallretailgrowth.Theriseinunemploymentcausedbytheglobaleconomicslowdownwillsupportgrowthindirectselling.Manyoftheunemployedarelikelytobepotentialsalespersonnelfordirectsellingcompanies.Theforecastperformanceisexpectedtobebetterthanthatofthereviewperiod,mainlyasaresultofnewentrants,suchasHarbinPharmaceuticalGroupandJiangsuLongliqiGroupCoLtd.DirectSalestoGrowAheadofRetailOverallFutureProspectsHomefurnishingsandhousewaresdirectsellingwillrecordthestrongestgrowthrateto2014,albeitfromasmallandstillrelativelynichebase.Amway’slaunchofAmwayQueencookingutensilproductsisstillatanearlystage.Itislikelytoseearapidgrowthperiod,supportedbyAmway’sstrongpositionanddistributionnetworkacrossthecountry.Homecaregrowthisexpectedtoslowdownduringtheforecastperiod.Asdailynecessities,homecareproductssuchasdishwashingandlaundrycarearewidelyavailablewithinstore-basedchannels,suchashypermarkets/supermarkets,conveniencestoresandindependentgroceryretailers,atrelativelylowprices,whilepricesofhomecareproductssoldthroughthedirectsellingchannel,suchasAmway’shomecareproducts,tendtobehigherpricedandthusandlessaffordabletoconsumers.Unitpricesofdirectsellingproductsareunlikelytofallduringtheforecastperiod.Indeed,leadingdirectsellingplayers,suchasAmway,plantoincreaseunitpricesfurtherinthefuture,whichwillmakethepricegapbetweenstore-basedanddirectsellingchannelswiderthanbefore.BenefitingfromitsTCMexpertiseandcontinuousproductinnovation,Infinituswillcontinuetoseestronggrowthduringtheforecastperiod.Inadditiontoitsexistingvitaminsanddietarysupplements,andbeautyandpersonalcareproductlines,thecompanyisexploringnewterritories.IthaslaunchedaherbalRTDteaproductsimilartoWongLoKatin2009,indicatingitspotentialexpansionintooneofthemostdynamicsoftdrinkscategoriesinChina.HomeFurnishingsandHousewarestoLeadGrowthFutureProspectsIntroductionChineseDirectSellingintheGlobalContextFrameworkofDirectSellinginChinaCategoryPerformanceCompetitiveLandscapeFutureProspectsDefinitionsRetailingSalesofnewandusedgoodstothegeneralpublicforpersonalorhouseholdconsumption.Excludesspecialistretailersofmotorvehicles,motorcycles,vehiclepartsandfuel.Alsoexcludesfoodservice,rentalandhireandwholesaleindustries(cashandcarry).SalesvalueexcludingorincludingVAT/salestax.Retailingistheaggregationofstore-basedretailingandnon-storeretailing.Retailingexcludestheinformalretailsector.Informalretailingisretailtradewhichisnotdeclaredtothetaxauthorities.Informalretailingencompasses(a)salesgeneratedbyunregisteredandunlicensedretailers,ieretailersoperatingillegally,and(b)anyproportionofsalesgeneratedbyaregisteredandlicensedretailerwhichisnotdeclaredtothetaxauthorities.Unregisteredandunlicensedretailersoperatepredominantly(althoughnotexclusively)asstreethawkersoroperateopenmarketstalls,asthesechannelsareharderfortheauthoritiestomonitorthanpermanentoutlets.Note,however,thatnotallstreethawkersoropenmarketstallsareinformal.Thesizeandimportanceofinformalretailingwilldependonmanyfactorsthatcontributetothegeneralbusinessclimateinanygivencountry,suchastheextentofgovernmentcontrol,regulationandlevelofcorruption.Activitiesinthe“blackmarket”,whichisusuallyunderstoodtorefertotradeinillegal,counterfeitorstolenmerchandise,areincludedwithinthedefinitionofinformalretailing.Activitiesinthe“gr