Direct sales law to implement the Avon Daily brand

On the delicate moment that the direct sales regulations will be officially implemented on December 1, the United States Avon chose to return to its sole proprietorship. The reporter learned yesterday that Avon has invested US$39 million in the repurchase of the remaining 6.155% shares in the Chinese company, thereby realizing its sole proprietorship in China, and withdrawing from Hong Kong tycoons Liang Qixiong and Li Guobao.

Avon disclosed in the United States on the 28th that it has signed relevant agreements to buy back 6.155% of its China business from two individual shareholders. Avon expects that the above transaction will be completed in the first quarter of 2006, before it needs the approval of the Chinese government.

"This repurchase will enable us to own a 100% controlling stake in Avon (China), which fully demonstrates our commitment and confidence in developing our business." Avon China stated yesterday.

This is actually the second equity repurchase of Avon in China. In March of last year, Avon took back a 20% stake in Avon China from Guangzhou Meichen with a price of 50 million US dollars, and thus “parts its ways” with this Chinese partner for more than 10 years.

However, the reporter noted that compared with the recovery of 20% of the shares of 50 million US dollars a year ago, the 6.155% shares had been paid for 39 million U.S. dollars, and Avon was undoubtedly spending huge sums of money. For this time, Avon simply explained that "it is because both parties agree that this move is appropriate and can achieve a win-win situation."

According to public information, the two individual shareholders who have withdrawn this time are Hong Kong “tycoon” figures. Li Guobao is a member of the Legislative Council of Hong Kong, chairman and chief executive of the Bank of East Asia, and Liang Qixiong is an executive vice president of China Resources Vantage. Avon said that at the beginning of entering the Chinese market in 1990, they were partners of Avon. At present, Avon has opened more than 6,000 stores in China.

The industry believes that Avon chose not to hesitate to realize the sole proprietorship at this time, which is undoubtedly related to the upcoming opening of China's direct selling market. On December 1st, the “Direct Selling Management Regulations” will be formally implemented, and the major direct selling giants will launch a license application war. As the current Avon, the only direct selling pilot company in China, is facing the pain of another transformation and return to direct sales.

Avon’s recent financial report showed that sales in China’s second quarter fell by 19% from the same period of last year, which was lower than the expected value of nearly US$30 million. In the third quarter, affected by China's direct sales legislation, Avon store owners continued to reduce their orders, and Avon’s sales in China fell by 16% over the same period of last year.

“We believe that China is the long-term profit growth opportunity for Avon Worldwide, and we hope to develop our business in China by taking full advantage of our 100% controlling interest.” Avon China’s relevant person also said yesterday that it will announce the future of Avon at an appropriate time. Investment plan information.