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CNN Live Sunday
Avon Selling Well In China
Aired November 23, 2003 - 18:38 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Avon calling in China? Well, the company's products are selling there but no longer with a doorbell chime. CNN's Jaime FlorCruz explains.
(BEGIN VIDEOTAPE)
FLORCRUZ (voice-over): Avon ladies in China are not ringing doorbells house to house. Instead they're selling cosmetic products in beauty boutiques and so far they're doing just as well.
LI PING, BOUTIQUE OWNER (through translator): Last year the cosmetic I sold worth more than $1 million U.S.
FLORCRUZ: That's a remarkable makeover for Li Ping who used to earn the equivalent of $40 a month as business manager of a struggling state-owned department store.
When she was laid off seven years ago she joined Avon and now owns eight shops. Her average profit, she says, $2,400 U.S. a month.
PING (through translator): I'm not an independent boss. I'm not constrained by regulations.
FLORCRUZ: Avon products have been selling well in China since 1990 thanks to the Avon ladies who sold door-to-door but in 1998 Beijing banned direct selling. Avon's first ever woman CEO, born of Chinese parents, was undeterred.
ANDREA JUNG, AVON CEO: The Chinese philosophy I was taught you don't ever give up. You go back at it again and again and again.
FLORCRUZ: Avon switched its business approach.
JUNG: So, one of the things that turned into an exciting opportunity is that we had to transform our business model and we're primarily a wholesaler and a retailer.
FLORCRUZ: Now, Avon has about 7,000 beauty boutiques nationwide operated mostly by independent women dealers. It has also opened franchise shops in partnership with a state-run China post, which is a wide network delivering logistics, letters and packages.
ZHAO XICAI, BEIJING POST OFFICE (through translator): Our idea is to turn our 120,000 mailmen into distributors. Maybe some years later all of them will be selling Avon products.
FLORCRUZ: Why should the Chinese government wish for your success here?
JUNG: I think first and foremost we bring an entrepreneurial opportunity for Chinese women. Avon's model for 117 years has been to open markets where we actually help the social status and the economic status of women around the world and I think that is also very true for China.
FLORCRUZ (on camera): What's your advice for CEO's trying to break into the Chinese market?
JUNG: I think it's a complex market but it is clearly the biggest consumer opportunity in the world. Look at how fast buildings and highways are going up and you see the Chinese work ethic and the commitment and the incredible aggressive belief that this will be the next global powerhouse. I have no doubt about that.
FLORCRUZ (voice-over): An international powerhouse that the American cosmetic giant intends to be a part of even if they cannot go door-to-door to do it.
Jaime FlorCruz, CNN, Beijing.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired November 23, 2003 - 18:38 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Avon calling in China? Well, the company's products are selling there but no longer with a doorbell chime. CNN's Jaime FlorCruz explains.
(BEGIN VIDEOTAPE)
FLORCRUZ (voice-over): Avon ladies in China are not ringing doorbells house to house. Instead they're selling cosmetic products in beauty boutiques and so far they're doing just as well.
LI PING, BOUTIQUE OWNER (through translator): Last year the cosmetic I sold worth more than $1 million U.S.
FLORCRUZ: That's a remarkable makeover for Li Ping who used to earn the equivalent of $40 a month as business manager of a struggling state-owned department store.
When she was laid off seven years ago she joined Avon and now owns eight shops. Her average profit, she says, $2,400 U.S. a month.
PING (through translator): I'm not an independent boss. I'm not constrained by regulations.
FLORCRUZ: Avon products have been selling well in China since 1990 thanks to the Avon ladies who sold door-to-door but in 1998 Beijing banned direct selling. Avon's first ever woman CEO, born of Chinese parents, was undeterred.
ANDREA JUNG, AVON CEO: The Chinese philosophy I was taught you don't ever give up. You go back at it again and again and again.
FLORCRUZ: Avon switched its business approach.
JUNG: So, one of the things that turned into an exciting opportunity is that we had to transform our business model and we're primarily a wholesaler and a retailer.
FLORCRUZ: Now, Avon has about 7,000 beauty boutiques nationwide operated mostly by independent women dealers. It has also opened franchise shops in partnership with a state-run China post, which is a wide network delivering logistics, letters and packages.
ZHAO XICAI, BEIJING POST OFFICE (through translator): Our idea is to turn our 120,000 mailmen into distributors. Maybe some years later all of them will be selling Avon products.
FLORCRUZ: Why should the Chinese government wish for your success here?
JUNG: I think first and foremost we bring an entrepreneurial opportunity for Chinese women. Avon's model for 117 years has been to open markets where we actually help the social status and the economic status of women around the world and I think that is also very true for China.
FLORCRUZ (on camera): What's your advice for CEO's trying to break into the Chinese market?
JUNG: I think it's a complex market but it is clearly the biggest consumer opportunity in the world. Look at how fast buildings and highways are going up and you see the Chinese work ethic and the commitment and the incredible aggressive belief that this will be the next global powerhouse. I have no doubt about that.
FLORCRUZ (voice-over): An international powerhouse that the American cosmetic giant intends to be a part of even if they cannot go door-to-door to do it.
Jaime FlorCruz, CNN, Beijing.
(END VIDEOTAPE)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
